Acorn Student Accomodation Profits Rise To Ksh. 297 Million

The ASA D-REIT has now built significant momentum with the portfolio comprising three operational properties, resulting in rental revenue of KES 139 million compared to KES 11 million last year.

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Acorn Investment Management Ltd (AIML) has released the half-year results of the Acorn Student Accommodation Development REIT (ASA D-REIT) and the Acorn Student Accommodation Income REIT (ASA I-REIT) (together referred to as ASA REITs) for the half-year of 2022, which have together achieved a combined profit of KES 297 million against KES 263 million in 2021.

Additionally, the ASA I-REIT continues to distribute consistent dividends to investors with the announcement of an interim dividend for the second consecutive year and the achievement of another milestone through the acquisition of its first new asset since the launch in February 2021.

ASA D-REIT

The ASA D-REIT has now built significant momentum with the portfolio comprising three operational properties, resulting in rental revenue of KES 139 million compared to KES 11 million last year. 

A major contributor to this rental growth was the launch of Qwetu Hurlingham in January 2022, with 832 beds, which within 6 months, ended the reporting period with an occupancy of 65%.

The ASA D-REIT’s portfolio of projects under construction has gathered pace with significant progress achieved as an additional 4 projects in Karen and Chiromo will break ground in the third quarter of 2022 having completed the pre-development planning.

Furthermore, an additional 4 projects at Hurlingham, Kenyatta University and Jomo Kenyatta University will break ground in the third quarter of 2022 having completed the pre-development and planning phase.

And with the long-term business plan in mind, further site acquisitions are already in the pipeline to provide the ASA D-REIT with its continued growth potential.

As a result, the ASA D-REIT has seen a steady growth in its Net Asset Value (“NAV”) from KES 5.22 billion as at 31st December 2022 to KES 5.58 billion as at 30th June 2022, which translates to a value per unit of KES 23.88.  

ASA I-REIT

In the first half of the year 2022, the ASA I-REIT has achieved a 33% growth in its total turnover to KES 186 million and 29% growth in net operating income to KES 120 million on the back of rental escalations effected and strong occupancy.

The average occupancy of 85% during the period was achieved despite university intakes being delayed due to the changes in KCSE dates occasioned by the COVID-19 pandemic.

The ASA I-REIT has recorded a total comprehensive income (including valuation gains) of KES 192 million against KES 149 million in 2021 (29% growth from last year) and so is able to announce the payment of an interim dividend of KES 64 million.

The ASA I-REIT has also successfully completed its first acquisition since launch of Qwetu Parklands (533 Beds) in June 2022. This operating property, whose NOI will accrue to the ASA I-REIT from July 2022, closed H1 2022 with an average occupancy of 90%.

The property is expected to bolster the ASA I-REIT NOI owing to its strategic location in Parklands and within proximity to key universities and tertiary institutions. This acquisition continues the growth of the portfolio beyond the initial three seed properties with more acquisitions planned for the coming period.

Supplementary Offer 

On releasing the results, the Managing Director of AIML, Mr. Raghav Gandhi said, “The half-year results of the ASA REITs continue their impressive growth trajectory with the achievement of a number of milestones.

“The continued payment of interim dividends by the ASA I-REIT rewards the confidence instilled in us by our investors and the addition of a new asset in the portfolio, in the form of Qwetu Parklands, only bodes well for the future. We are encouraged by the continued performance of the ASA D-REIT in what has been a challenging environment for the construction industry with rising commodity prices. Nevertheless, our collective experience in real estate will ensure that we will continue to deliver above-average returns to the ASA D-REIT investors with the first exit of an asset planned in the next reporting period.”