Kenyan tycoon Edward Kirathe’s property firm to raise $10.5 million from investors

Nairobi-based property developer Acorn Holdings, founded by Kenyan real estate tycoon Edward Kirathe, aims to raise $10.5 million by January 2024 from existing unit holders of its development Real Estate Investment Trusts (REITs).

The funds will be utilized to support the expansion of its Purpose-Built Student Accommodation (PBSA) projects.

In a recent move, Acorn unveiled plans to transfer two completed hostel properties worth $24.8 million to its Investment Real Estate Investment Trusts (I-REITs) before the end of this year. These projects mark a significant milestone for the company’s ongoing development efforts.

Acorn has initiated a rights issue to achieve its financial goal, which has already raised Ksh230.5 million ($1.61 million) by the end of June. The funds from this initial phase will be allocated to various ongoing projects, land acquisition deposits, and operational costs.

Acorn Investment Management, a subsidiary of Acorn Holdings, obtained approval from the Capital Markets Authority (CMA) for the second consecutive year to issue a supplementary offering memorandum.

This memorandum aims to raise funds for the issuance and subscription of units in the ASA D-Reit, with a target of Ksh1.5 billion ($10.5 million). The offer period will continue until January 2024, giving potential investors an opportunity to participate.

The ASA D-Reit follows a unique funding model that borrows funds specifically for designated projects. Proceeds from sales or transfers of properties under development are used to settle obligations to the developer’s Income Reit.

The Income Reit generates revenue from rent and utilities, distributing dividends to Reit holders. Acorn’s student rooms command monthly rental fees ranging from Ksh9,900 ($69.4) to Ksh14,500 ($101.7) based on amenities and size.

Established in 2001 by Kirathe, Acorn Holdings Africa has completed over 65 projects during its two-decade tenure. Presently, the company manages assets valued at Ksh11.8 billion ($82.7 million).

With a substantial portfolio comprising 17 properties and a total of 17,000 PBSA beds, including 6,000 fully operational beds across nine properties, Acorn, under the leadership of Kirathe, focuses on projects within the Nairobi Metropolitan Area, covering Nairobi County and its adjacent counties.