Property developer Acorn is set to pay Ksh600 million towards settling its Ksh5.7 billion green bond acquired from international lenders after selling the Qwetu Aberdare Heights II, a 630-bed hostel block located next to the United States International University Africa (USIU) off Thika Road in a Ksh1.48 billion deal.
In a statement, Acorn disclosed that the Acorn Student Accommodation Development REIT (ASA D-REIT) had offloaded the asset to the Acorn Student Accommodation Income REIT (ASA I-REIT) in a deal expected to bring the total repayment on the green bond to Ksh3 billion ahead of its maturity in November 2024.
With this acquisition, per Acorn’s statement, the total number of assets acquired by the ASA I-REIT in the last 3 years now stands at 4, with the total number of properties in its portfolio at 7.
Former President Uhuru Kenyatta (fourth from right), Acorn and London Stock Exchange officials clap after Kenya’s first Green Bond was listed at The Square Mile in January 2020.
The 7 properties have a bed capacity of 4,450.
“Qwetu Aberdare Heights II raises the total asset value of the ASA I-Reit to Ksh10.5 billion,” the statement read.
“The ASA D-REIT, has a total asset value of Ksh 12 billion, with 12 projects under development including the Qwetu and Qejani in Karen and Chiromo. The Chiromo development with 2,700 beds is the last to be funded by the Green Bonds projects and is the largest PBSA development in Africa,” the statement further read.
Following the transaction, the ASA D-REIT declared a dividend payout of Ksh240 million to investors, representing a yield of 3.4%.
“This dividend is in line with the offer memorandum issued during the launch of the ASA D-Reit in 2021.
Commenting after the transaction was completed, Matthew Maina, the Acting Executive Director of Acorn Investment Management Limited remarked that the deal positions the company as a market leader in purpose-built student accommodation.
Acorn’s Green Bond was the first of its kind in Kenya.
The bond was acquired in 2019 and later scaled up through a second tranche in 2021 bringing the total amount to Ksh5.7 billion.
At the time, the company announced that the second tranche had been oversubscribed by 46%.
Matthew Maina, the Acting Executive Director of Acorn Investment Management Limited