Property developer Acorn plans to acquire additional land in Juja and Nairobi’s city centre to construct student hostels.
The developer said in a semi-annual report for its development real estate investment trust (Reit) programme that it is looking to put up a new hostel in Juja under its Qwetu brand targeting students at Jomo Kenyatta University of Agriculture and Technology.
Acorn is developing a hostel in Juja under its Qejani brand, which it said will have 1,116 beds.
In the Nairobi CBD, the developer expects to set up two separate units under the two brands on a piece of land, targeting institutions such as the University of Nairobi and the Technical University of Kenya.
“In a bid to continue its growth trajectory, the ASA D-REIT has identified another land parcel in Juja within the vicinity of the JKUAT main campus for a Qwetu offering. Similarly, a land parcel within the central business district has been identified for both a Qwetu and a Qejani,” said Acorn.
“The Acorn Student Accommodation D-Reit continues to seek out suitable land parcels for expansion of both its Qwetu and Qejani offerings to address the unmet demand of the purpose-built student accommodation market segment.”
By the end of June, the D-Reit had a total of 13 separate hostel projects in its pipeline, ranging from completed ones, awaiting transfer to the developer’s investment Reit, to ones at land acquisition stage like the CBD and Juja Qejani units.
The 10 that are either completed or partially done under the D-Reit have a bed capacity of 10,060, while the I-Reit has five hostels with a bed capacity of 3,003 on its portfolio.
Acorn funds projects with a mix of about 65 percent debt and 35 percent equity. For the debt portion, the D-Reit borrows funds for specific projects and uses the proceeds to settle the obligations.
Acorn’s income-focused Reit meanwhile absorbs the hostels from the development arm once they are completed, thereafter generating income from rent and utilities that are distributed as dividends to shareholders.
The rental fee for Acorn’s student rooms ranges from Sh9,900 to Sh14,500 per month, depending on the amenities and size of the space.
The most recent property addition to Acorn’s I-Reit was the 697-bed Qwetu Aberdare Heights I near USIU, via a transfer from the D-Reit at a cost of Sh1.78 billion in October last year.
The D-Reit will transfer another two completed and occupied hostel properties in Hurlingham and near USIU respectively to the I-Reit by the end of this year, valued at Sh3.54 billion.
