The Nairobi-based property developer Acorn Holding Limited has announced plans to build two new student hotels in Kenya with the Ksh2-billion ($18.48 million) oversubscribed green bond that it raised from investors.
According to Acorn Founder and CEO Edward Kirathe, the oversubscribed green bond is a “huge vote of confidence in Acorn and the wider capital markets, especially given the ongoing COVID-19 pandemic.”
The company raised the bond from a diverse group of investors, including Kenyan pension funds, banks and reinsurance companies, Business Daily reported.
The initial Ksh1.4-billion ($12.9 million) bond issuance was oversubscribed by 42.9 percent, amounting to Ksh2 billion ($18.48 million).
The latest financing will see the building of two hostels and accommodate 2,654 beds. This will bring the total number of developments funded under the bond to eight with a total bed capacity of 7,349.
In 2019, Acorn raised Kenya’s first green bond worth 4.3 billion shillings ($41.45 million) to build environmentally-friendly student accommodation.
By March 2021, it had raised another Ksh2.1 billion ($19.4 million) from investors when it split its portfolio into development and investment trust.
Acorn is the brainchild of Kirathe, a Kenyan businessman who founded the company in 2001 as a project management firm.
It is on a mission to address the housing deficit among undergraduates and upwardly mobile young professionals in Nairobi.
Acorn began full-fledged property development in 2006. However, Acorn was created in collaboration with Helios, an Afrocentric private equity firm, in 2015 to develop and manage purpose-built rental accommodation for young people in Nairobi.
Acorn has overseen several iconic projects in Nairobi, including the Coca-Cola Regional HQ and Deloitte Head Office.