KENYA – Real estate developer Acorn Holdings through its subsidiary Spruce Properties Limited Liability Partnership, has launched the construction of its US$17.6 billion student accommodation hostels in Nairobi’s Karen under the Qwetu and Qejani brands.
The 3,591 room-hostels will sit on a 5-acre plot, comprising nine residential blocks, which are expected to be completed by the end of 2022.
The development is expected to serve about 10,000 students from JKUAT Karen Campus, Catholic University of East Africa, Cooperative University, Kenya School of Law and other institutions around the area.
According to the company, the hostels aim to provide safe, secure and affordable accommodation to students, with charges expected to range between US$139 and US$153 for a room on the premium Qwetu Brand and between US$70 to US$116 for the Qejani brand.
Other upcoming projects by the developer include the US$7.5 million Nairobi West Qwetu hostels targeting Strathmore University, the US$8.2 million Qwetu 3 and US$6.9 million Qwetu 4 developments targeting United States International University Africa (USIU Africa), all set for completion in 2021.
In February 2021, InfraCo Africa, part of the Private Infrastructure Development Group (PIDG), subscribed to the Acorn Holdings Ltd (Acorn) Real Estate Investment Trust (REIT) by investing US$10 million enable Acorn to scale its business.
As student numbers grow, Kenya is experiencing a chronic shortage of suitable student accommodation and Acorn is seeking to attract private sector investment from Kenya’s local capital markets in order to achieve its ambitious growth strategy.
Unlike traditional equity, REITs offer a tax-efficient means of raising capital, enabling Acorn to achieve scale quickly and as an anchor investor into both REITs, InfraCo Africa’s involvement gave significant comfort to local private sector investors who were considering REITs for the first time and mobilized funds from local pension schemes, insurance companies and high net worth individuals.
On the other hand, in March of 2021, Student Factory Africa, a consortium of architects, partnered with a Dutch-based private equity firm EPC to launch students hostel project in Kenya worth US$50 million to address the gap in the sector
According to data from Kenya’s Ministry of Education, available student housing in Kenya stood at 300,000 compared to a university enrolment of 520,900 in 2019, excluding technical and vocational education and training colleges.