Acorn Investment Management, the firm behind the Qwetu and Qejani student housing brands, wrapped up 2025 with a combined net profit of KSh 1.52 billion across its two real estate investment trusts, reflecting a 9.4% year-on-year increase.
Yet the headline figure tells only half the story. The real turning point came from a sharp 590 basis point drop in borrowing costs at the Income REIT, which effectively cushioned earnings against declining rental income.
The Acorn Student Accommodation Income REIT (I-REIT) posted a 20.6% rise in profit to KSh 670.16 million, while the Development REIT (D-REIT) delivered a modest uptick to KSh 854.22 million.
Meanwhile, total assets under management climbed 11% to KSh 29.3 billion, supported by an expanding portfolio nearing 21,000 student beds, now extending beyond Nairobi into secondary university towns.
How the Dual-REIT Model Works
Acorn runs a pipeline model:
- The D-REIT develops student housing projects under the Qwetu and Qejani brands
- Once stabilised and occupied, these assets are transferred to the I-REIT
- The I-REIT then holds them as long-term income-generating properties and distributes returns to investors
By year-end, Chiromo and Bogani East properties, valued at KSh 6.91 billion, were earmarked for transfer to the I-REIT.
I-REIT Performance: Financing Strategy Saves the Day
Despite a 3% drop in rental income, the I-REIT managed to grow profits, largely thanks to aggressive debt restructuring.
Rental income was weighed down by disruptions in academic calendars, though Acorn expanded partnerships to 99 institutions, up from 92, to steady occupancy levels.
A refinancing move reduced borrowings from KSh 2.5 billion to KSh 1.9 billion, while interest rates dropped from 17% to 11.1%, slashing finance costs significantly.
ASA I-REIT: Key Financial Metrics
| Metric | FY 2025 | FY 2024 | YoY Change |
|---|---|---|---|
| Rental Income | 1,049.58 Mn | 1,081.56 Mn | ▼ -3.0% |
| Fair Value Gains | 363.24 Mn | 309.96 Mn | ▲ +17.2% |
| Total Operating Income | 1,413.36 Mn | 1,400.11 Mn | ▲ +0.9% |
| Administrative Expenses | 340.90 Mn | 355.56 Mn | ▼ -4.1% |
| Operating Profit | 975.06 Mn | 961.48 Mn | ▲ +1.4% |
| Finance Costs | 318.07 Mn | 440.44 Mn | ▼ -27.8% |
| Profit for the Year | 670.16 Mn | 555.61 Mn | ▲ +20.6% |
| Total Assets | 11.29 Bn | 11.08 Bn | ▲ +2.0% |
| Net Asset Value | 9,194.89 Mn | 8,122.09 Mn | ▲ +13.2% |
| Borrowings | 1,819.05 Mn | 2,650.77 Mn | ▼ -31.4% |
| Gearing Ratio | 16.0% | 22.0% | ▼ -6.0 ppts |
| Earnings Per Unit | 1.83 | 1.59 | ▲ +15.1% |
| Dividend Per Unit | 0.84 | 0.66 | ▲ +27.3% |
Notably, the trust declared KSh 311.17 million in distributions, marking its ninth consecutive payout, with cumulative distributions surpassing KSh 828 million since launch.
D-REIT Performance: Strong Growth, Heavy Costs
The Development REIT had a far more vigorous operating year, though rising financing costs masked much of the progress.
Rental income surged 131% to KSh 420.14 million, driven by newly operational properties across Nairobi. Fair value gains also jumped sharply, lifting operating profit.
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However, this expansion came at a cost. Finance expenses soared 158.3% as borrowing increased to fund an aggressive construction pipeline.
ASA D-REIT: Key Financial Metrics
| Metric | FY 2025 | FY 2024 | YoY Change |
|---|---|---|---|
| Rental Income | 420.14 Mn | 181.71 Mn | ▲ +131.2% |
| Fair Value Gains | 1,717.09 Mn | 1,260.38 Mn | ▲ +36.2% |
| Financial Asset Gains | 37.11 Mn | 20.17 Mn | ▲ +84.0% |
| Total Operating Income | 2,197.79 Mn | 1,490.00 Mn | ▲ +47.5% |
| Administrative Expenses | 197.38 Mn | 104.48 Mn | ▲ +88.9% |
| Operating Expenses | 281.17 Mn | 221.74 Mn | ▲ +26.8% |
| Finance Costs | 900.61 Mn | 348.64 Mn | ▲ +158.3% |
| Profit for the Year | 854.22 Mn | 839.91 Mn | ▲ +1.7% |
| Total Assets | 18.04 Bn | 15.36 Bn | ▲ +17.5% |
| Net Asset Value | 8,479.30 Mn | 7,339.65 Mn | ▲ +15.5% |
| Borrowings | 8,391.41 Mn | 6,652.67 Mn | ▲ +26.1% |
| Gearing Ratio | 48.0% | 44.0% | ▲ +4.0 ppts |
| Earnings Per Unit | 2.98 | 3.05 | ▼ -2.3% |
No dividend was declared, as capital continued to be reinvested into expansion.
Expansion Pipeline and What Lies Ahead
Capital commitments rose to KSh 4.28 billion, with major developments underway in:
- Nairobi CBD (Larch Properties) – 52% complete
- Eldoret (Lancewood Properties) – adding over 2,200 beds
- Kakamega (Spicebark Properties) – newly launched
Notably, Eldoret and Kakamega mark Acorn’s first significant push beyond Nairobi.
