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Acorn Holdings Boosts Dividends Across REITs, Providing a Win for Unitholders.

Acorn Holdings has more than doubled its dividend payout to investors in its real estate investment trusts (REITs). The student hostel developer is set to disburse Ksh482.8 million in dividends to REITs unit holders, marking a significant increase from its previous payout of Sh192.48 million.

Despite facing challenges in the operating environment, both the Acorn Student Accommodation Development REIT (ASA D-REIT) and the Acorn Student Accommodation Income REIT (ASA I-REIT) have demonstrated resilience.

“The combined profit declined on the back of a spike in interest rates, inflation-driven increase in construction costs, and the decision by the REIT Manager to provide a maintenance reserve for the I-Reit to support the long-term quality and value of the assets,” stated Acorn in a released statement.

In a big step, the Acorn Student Accommodation Development REIT (ASA D-REIT) gave out its first payment of Sh240 million, or Sh0.91 per unit, in December 2023. Even though their profit dropped to Sh71.6 million in 2023 from Sh384.2 million in 2022 because of less gains from property investments, Acorn used money they had saved up to make this payment.

At the same time, the Acorn Investment REIT (I-REIT) increased its total payment to Sh242.8 million, or Sh0.77 per unit, up from Sh192.5 million in 2022. This increase happened even though their profit fell to Sh396.1 million in 2023 from Sh504.9 million in 2022. It shows that Acorn is good at managing their money despite tough times in the market.

In addition to the dividend payout, the REIT closed the year with a net asset value of Sh24.54 per unit, which is an increase from the ex-dividend price per unit of Sh24.40.

Related Post:   Rising bank interest rates are leaving Kenyan households struggling with expensive loans.

Acknowledging challenges like increasing interest rates and rising construction costs, Acorn stays concentrated on improving its debt arrangements. With recent acquisitions like Qwetu Hurlingham, its asset portfolio has grown to Sh9.2 billion.

“Over the next two years, we will be working on several initiatives to continue to deliver profit and dividends to our investors, whilst growing the value of their capital,” Acorn Investment Management Limited’s acting executive director, Mathew Maina, said.

The ASA D-REIT continued to deliver on its strong development pipeline by acquiring a property in Nairobi CBD, which will add a total of 2,400 beds to the REIT portfolio, bringing the total assets under management to Sh11.5 billion.

With a combined portfolio of 17,000 beds and total assets under management of Sh20.7 billion, the developer is now the largest purpose-built student accommodation (PBSA) provider in Africa.

Additionally, Acorn is planning to build hostels in Nairobi’s CBD targeting students from institutions such as the University of Nairobi and the Technical University of Kenya, highlighting Acorn’s dedication to sustainable growth and community welfare.

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