Property developer Acorn Holdings returns to the market this month with eyes on raising Sh3.2 billion capital for a number of projects including land and real estate acquisitions.
The money will be raised by its investment arm, Acorn Investment Management Limited, which already has two real estate investment trusts (REIT) listed on the Nairobi Securities Exchange.
“We are doing two supplementary offers, one for each REIT. The money we raise in the development REIT will enable it to acquire more land, which we have in the pipeline and also continue development of existing projects.
In the case of the Income REIT, we are planning to acquire two new properties in the next six months,” said Raghav Gandhi, chief investment officer at Acorn Investment Management Limited.
Targeting Sh2.8 billion
In what will be the debut supplementary issuance by REITs in the Kenyan market, Acorn argues that the timing is right for a fresh capital raise based on interest expressed by investors.
The supplementary offer will be open to both new and existing investors with the income REIT targeting Sh2.8 billion while the balance Sh400 million will be for the development REIT.
“We are just pending final approval from the Capital Markets Authority and this should happen in the course of the next few days. We have been working extensively with the market regulator on this and we are targeting that by mid-April you should see both supplementary offers,” said Gandhi.
Acorn Investment Management Ltd, the entity behind Qwetu and Qejani residences targeting students, announced a Sh1.2 billion net profit for its REITS in their first year of operation.
The development REIT recorded a net profit of Sh776 million while the Income REIT recorded Sh387 million for the year ended December 31, 2021.
The entity has announced a 93 percent dividend payout to unit holders from its income REIT translating to a total pay-out of Sh156.8 million.
The firm says going forward, investors can expect an interim dividend pay-out at about 80 percent of earnings and a final dividend of about 90 percent as standard policy.
“It’s going to be more of the same, we are not just looking at this as a first-year dividend policy. This is a dividend policy that continues into existence. We are going to be paying out an interim dividend when we release it in July 2022 as well and we will continue paying out dividends twice a year. That’s how we are going to build confidence in this asset class,” Gandhi said.