“This is a proud moment that exemplifies Acorn’s core values of innovation, sustainability, and empowerment. The success of this green bond has not only strengthened our financial position and capital markets presence but also delivered affordable student housing,” Acorn Holdings CEO Edward Kirathe said.
The bond, held by the company’s Acorn Student Accommodation (ASA) Development Reit, has been paying a fixed rate of 12.5 percent in annual interest to investors.
Its proceeds have been drawn down over the period to finance the construction of hostels in Chiromo, Hurlingham, Karen, Thika Road (USIU), and Madaraka.
The developer’s sustainability-linked green bond was the first such paper on the continent and is cross-listed on both the International Securities Market of the London Stock Exchange and the Nairobi Securities Exchange.
The bond has helped Acorn to finance over 7,000 students’ beds, covering eight built student accommodation properties in Nairobi including Qwetu and Qejani Chiromo, a project with a combined capacity of 2,500 beds which was completed earlier this year.
The bond was guaranteed by GuarantCo- a part of the Private Infrastructure Development Group with SBG Securities as the lead placement agent.
The issuance was a restricted public offer which saw Acorn raise funds from targeted and sophisticated investors only.
Acorn normally funds projects with a financing mix of about 65 percent debt and 35 percent equity.
Earlier redemptions under the bond programme have been funded through the sale of hostels to the investment Reit.
The I-Reit then generates income from rent and utilities that are then distributed as dividends to Reit holders. The ASA I-Reit had a portfolio of seven hostels valued at Sh10.3 billion at the end of June 2024.
By the end of June 2024, the ASA D-Reit held 11 properties under different stages of development with a total valuation of Sh10.9 billion.
These include two hostels in Karen under the company’s Qwetu and Qejani brands that it expects to offload to Acorn’s Investment Reit (I-Reit) by the end of the first quarter of 2025.
