257 retail investors buy into Acorn’s property fundTuesday April 19 2022
Small investors bought units/shares in Acorn Student Accommodation Income REIT (ASA I-REIT) worth Sh6.4 million in the five months to December when there was a trial to see if there is a mass market demand for the property fund.
The fund, which buys students hostels and holds them for income, was set up to be owned primarily by institutional investors. The ASA I-REIT is not listed but its shares can be traded on the unquoted securities platform of the Nairobi Securities Exchange #ticker:NSE .
In August 2021, Acorn launched an investment club dubbed Vuka through which retail investors can invest in the property fund with capital starting from Sh50,000.
The Vuka platform was admitted into the Capital Markets Authority’s Sandbox (a platform for encouraging innovation in the Capital Markets).
“The initial few months after launch were about ensuring the robustness of the system and processes. We were able, during this time, to bring in 257 members with total contributions of Sh6.4 million by December 31, 2021,” ASA I-REIT says in its latest annual report.
“With the platform now having been tested, we are set for the next growth phase to explore the fundamental demand for such an offering in the retail investor base.”
Acorn’s chief executive Edward Kirathe was among the individual investors who bought shares in the Vuka programme. He acquired 19,680 units, the property fund said.
The ASA I-REIT trades based on the last reported net asset value (NAV) per unit which stood at Sh20.8 as of December 2021.
“During the time of the launch, a number of retail investors had expressed surprise that they were unable to invest themselves in the ASA REITs, which identified for us a significant market opportunity,” the property fund said.
The ASA I-REIT paid an interim dividend of Sh0.38 per unit and has proposed a final distribution of Sh0.64 per unit, bringing the total to Sh1.02 per unit.
This represents a payout ratio of 93 percent of ordinary net income, surpassing the minimum regulatory requirement of 80 percent. The fund is set to acquire more properties to expand its portfolio of income-generating assets.