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Acorn transfers seven student hostels

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Acorn-owned hostels in Nairobi’s Ruaraka. FILE PHOTO | NMG

Student hostels developer Acorn Holdings has completed the transfer of seven properties to a real estate trust, which it recently formed in partnership with other shareholders to make it easier for investors to trade their holdings.

The company also received approval from the Capital Markets Authority (CMA) to raise the ceiling of its bond programme to Sh5.7 billion from the previous Sh5 billion. Acorn has already raised the Sh5.7 billion from bondholders.

“Accordingly, the transfer was completed on September 22, 2021,” the company said of the transfer of the hostels that are at various stages of construction to Acorn Student Accommodation (ASA) D-Reit.

The properties are Qwetu Hurlingham, Qwetu Aberdare Heights, USIU 4, Catholic Qejani, Catholic Qwetu, Chiromo Qejani and Chiromo Qwetu.

Acorn is the top shareholder of the D-Reit with an 83.12 percent stake, with the law allowing the firm to reduce its stake to the minimum requirement of 10 percent as the promoter.

The D-Reit’s units (shares) are available for trading on the Nairobi Securities Exchange’s over-the-counter (OTC) market.

Acorn says the increase in the borrowing limit allowed it to raise more funds as it ramps up investment in the student accommodation sector.

“This would enable the issuer to issue additional notes to eligible investors of up to Sh1.4 billion by way of a restricted public offer,” the company said.

In its latest fundraising in July, Acorn raised Sh1.4 billion from bond investors to develop two new properties. 

Editor's Note: This story has been revised to remove part of the headline and statements that indicated that Acorn intends to borrow Sh1.4 billion. The funds were raised in July.