•The total dividend payout for the financial year ended December 31, has been set at Sh480 million, compared to the Sh192 million in the previous year.
•This follows a solid combined operating income of Sh1.45 billion in 2023.
Acorn Investment Management Limited has more than doubled dividends payout to investors in its real estate investment trusts (REITs), despite a huge drop in profit from Sh1.4 billion to Sh765 million.
This is for the Acorn Student Accommodation Development REIT (ASA D-REIT) and the Acorn Student Accommodation Income REIT (ASA I-REIT) which, despite a tough operating environment, have remained resilient.
The total dividend payout for the financial year ended December 31, has been set at Sh480 million, compared to the Sh192 million in the previous year.
This follows a solid combined operating income of Sh1.45 billion in 2023.
A spike in interest rates that pushed up borrowing costs and inflation-driven increases in construction costs, however, wiped out the gains leading to a significant drop in profit, management said.
During the year, the REIT Manager also decided to provide a maintenance reserve for the I-REIT, to support the long-term quality and value of the assets.
“The maintenance reserve is a one-off provision to cover the entire portfolio and going forward will not have material impact, whilst the impact of the rise in construction costs is now priced in the ongoing developments,” management said in a statement on Thursday.
Acorn is also working to replace the costly debt in the ASA IREIT with lower-priced debt.
The continued profitability of the ASA REITs despite the challenging operating environment continues to demonstrate the resiliency of the Student Housing asset class, having achieved profitability in all the three years since launch.
The combined ASA I-REIT and ASA D-REIT portfolio of operating beds and those under development is now 17,000 beds, making Acorn the largest Purpose-Built Student Accommodation provider in Africa.
The two REITs now have a combined total assets under management of Sh 20.7 billion.
The ASA I-REIT continued with its growth trajectory delivering top-line growth driven by increased occupancy rates in the operating assets and new acquisitions.
In continuing with its strong dividend policy, the ASA I-REIT declared a final dividend of Sh0.47 per unit, bringing the full 2023 dividend to Sh0.77 per unit matching the 2022 dividend payout.
This marks the sixth straight dividend payment from the ASA I-REIT since its launch three years ago.
The ASA I-REIT successfully acquired an 830-bed capacity property, Qwetu Hurlingham, at a value of Sh2.1 billion, bringing the total asset under management to KES. 9.2 billion.
The ASA D-REIT paid out its first dividend since the launch of Sh240 million equating to a dividend of Sh0.91 per unit.
In addition to the dividend payout, the REIT closed the year with a net asset value of Sh24.54 per unit, which is an increase from the ex-dividend price per unit of Sh24.40.
At the close of the year, the ASA D-REIT held the Qwetu Aberdare Heights II property as an asset available for sale in anticipation of its sale to the ASA I-REIT.
The ASA D-REIT continued to deliver on its strong development pipeline by acquiring a property in Nairobi CBD, which will add a total of 2,400 beds to the REIT portfolio, bringing the total assets under management to Sh11.5 billion.
"Over the next two years, we will be working on several initiatives to continue to deliver profit and dividends to our investors, whilst growing the value of their capital," Acorn Investment Management Limited's acting executive director, Mathew Maina, said.