US Govt Extends Ksh24 Billion to Qwetu Hostels Developer

The US government has extended a Ksh24 billion (approximately $180 million) loan to Acorn Holdings - the developer behind the popular brand of Qwetu and Qejani hostels. 

The money will be provided through the International Development Finance Corporation (DFC) - an agency of the US federal government that finances transformative development projects in developing countries. 

Acorn Holdings received the funding to extend the construction of student accommodation units that meet the IFC’s Excellence in Design for Greater Efficiencies standards. The IFC’s standards require development partners to put up green buildings that are affordable and sustainable, reducing their environmental impact by at least 20 percent.

Acorn Holdings CEO Edward Kirathe welcomed the development, noting that the funds would be split between the Income and Development REITs at Ksh12 billion each.  

The Ksh12 billion cash injection is a welcome move for investors in the Acorn Student Accommodation Income Real Estate Investment Trust (ASA I-REIT) as the concessional loan reduces reliance on expensive local debt. 

“Getting this money means that we are going to put cheaper debt into the ASA I-REIT, which means it’s not going to be as dilutive to equity as the local debt. The reduced cost of debt will increase the returns we give our investors,” Kirathe stated. 

The Ksh24 billion concessional loan from the DFC underscores international confidence in Acorn’s innovative approach to real estate projects in Kenya. 

The ASA I-REIT is the premier Income REIT in Kenya which manages several student accommodation units including the Qwetu and Qejani brand of hostels. 

The ASAI-REIT has tapped into an existing gap in student accommodation units. Rather than co-habit in makeshift residential houses, the student accommodation units offer a convenient aboard for students with ultra-modern studios and rooms with shared bathrooms and kitchens. 

The hostels also have dedicated facilities such as a library, and entertainment rooms, to enhance the student learning experience. 

Investors can buy a piece of the ASA I-REIT through the Vuka Investment Club, which is regulated by the Capital Markets Authority (CMA).

The Vuka Investment Club offers investors a unique opportunity to participate in the lucrative real estate market with as little as Ksh5,000 per month.  By buying units or shares in an I-REIT, ordinary investors can invest in real estate without the need to buy, manage, or finance properties directly.

This model has been cited as a major driver of affordable housing in developed and developing countries like Kenya. Through the Vuka Investment Club, for example, your units earn you a piece of prime property which include: Qwetu Ruaraka (Along Outer Ring Road, Near KCA University)

1. Qwetu Jogoo Road, located 25 minutes from CBD
2. Qwetu Wilson View, in Lang’ata
3. Qwetu Hurlingham, near Strathmore University
4. Qwetu Aberdare Heights 1, off Thika Road, near USIU
5. Qwetu Aberdare Heights 2, off Thika Road, near USIU
6. Qwetu Karen (Near CUEA, JKUAT Karen, Coop Uni, MMU, Nazarene  University)
7. Qwetu Parklands, located 10 minutes from CBD
8. Qejani Karen (Near CUEA, JKUAT Karen, Coop Uni, MMU, Nazarene  University)
9. Qejani Chiromo (a short stroll away from the University of Nairobi Chiromo Campus)

One unit of the ASA I-REIT that can be purchased via the Vuka Investment Club is currently retailing at Ksh22.03. 

The ASA I-REIT collects rent from tenants, providing shareholders with passive income through dividends paid out twice a year. This in addition to potential capital appreciation, makes it an attractive investment option for individuals seeking to diversify their investments and secure steady returns.

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