Property developer Acorn’s student accommodation Development Reit (real estate investment trust) will transfer three completed hostel properties valued atSh4.46 billion to the developer’s Investment Reit this year, utilising the proceeds of the sales to cut its debt amid rising finance costs.
Acorn said in a statement that its D-Reit identified the Karen Qwetu and Qejani units that are located near the Catholic University of Eastern Africa (CUEA) for the transfer, alongside the Qwetu facility at Chiromo.
The Development Reit puts up student hostels near various universities using borrowed funds, and uses the proceeds of their sale to settle these obligations or put up new units.
The Investment Reit meanwhile absorbs the hostels —which are held under the Qwetu and Qejani brands— from the development arm once they are completed, thereafter generating income from rent and utilities that is thereafter distributed as dividends to Reit holders.
By the end of June 2025, the Karen Qwetu hostel was valued at Sh1.37 billion, the Qejani facility at Sh896 million and the Chiromo Qwetu unit at Sh2.19 billion.
At the end of last year, the Acorn D-Reit had 15 properties in its portfolio. Nine were operational, with six under various stages of development including land acquisition.
“During the year, the D-Reit expanded its portfolio of assets under stabilisation (operational) by opening three new assets in the second half of the year which resulted in an increase in rental income,” said Acorn.
“In the coming year (2026), the D-Reit plans to exit three assets to the I-Reit; Qwetu and Qejani Karen in the first half of 2026, followed by Qwetu Chiromo in the second half. In 2026, the D-Reit will prioritise reduction of overall debt over growth.”
Acorn’s combined portfolio of operating and development-stage student accommodation beds now stands just under 21,000, and the total assets under management across the two Reits grew by 11 percent to Sh29.3 billion in 2025.
The investment Reit has seven properties in its portfolio, with a capacity of 4,500 beds. The last acquisition from the D-Reit was the Qwetu Aberdare Heights II near the United States International University (USIU) in January 2024.
The planned purchase of the three additional properties this year will raise the I-Reit’s bed capacity to 6,656. Portfolio-wide average occupancy for the I-Reit stood at 81 percent in June 2025, down from 88 percent in the same period in 2024 due to reduced numbers in its Jogoo Road, Parklands and Ruaraka properties.
In the 12 months to December 2025, the two Reits posted a 9.4 percent growth in net earnings to Sh1.52 billion, from Sh1.39 billion in 2024.
The Acorn I-Reit recorded a net profit of Sh670.16 million in the period, up from Sh555.61 million in 2024, while the D-Reit made a net profit of Sh854.2 million, up from Sh839.9 million previously.
Overall profit growth was however affected by an increase in finance costs on the D-Reit from Sh312.82 million to Sh865 million, while the cost on the I-Reit fell to Sh304.9 million, from Sh416.9 million in 2024.
Acorn said that the D-Reit experienced a challenging capital raising environment in 2024 and 2025, as the market shifted capital allocation into government securities, resulting in a change from growth strategy to consolidation, with a focus on the sale of completed and stabilised assets.
