Ep. 36: Two Innovative Development Finance Models (Nairobi, Kenya) // The Essential Housing Campaign

Описание: Learn More @ https://housinginnovation.co/solution...

Acorn Holdings Limited ("Acorn") is a Kenya-based fully integrated real estate business – with in-house development, operations, and financing – specializing in purpose-built student accommodations in the country’s capital, Nairobi. With seven operational projects totaling more than 5,000 beds, Acorn is one of the largest real estate operators in Africa and is on track to double their portfolio over the next three years.

While the company is over 20 years old, Acorn has been able to fund its recent growth with two innovative new approaches to funding. In 2019, they were the first company to originate a “green bond” in Kenya, a $50 million, two-tranche, 5-year note that attracted a range of leading local and global capital providers to invest in Kenya’s housing market with environmental and sustainable goals in mind. In 2021, Acorn made news for another capital market first – launching two real estate investment trusts (REITs) that act as a ‘virtuous self-financing cycle’ – with the development or “D-REIT” acquiring land and developing new housing, and the investment or “I-IREIT” buying the operational asset as a long-term investment, thereby replenishing the D-REIT to go and buy more land and build more housing. The D-REIT was the first REIT of its kind in the world, as well as being the first student accommodation REIT in Africa and the first to issue on the OTC segment of the Nairobi Securities Exchange.

We learn more about Acorn, the Kenya housing market, and the two financing models in particular – the green bond and the REITs – with Acorn’s Chief Investment Officer, Raghav Gandhi, who is also the Managing Director of Acorn’s Investment Arm, Acorn Investment Management Limited. Discussion moderated by Charly Ligety, Director of The Housing Innovation Collaborative.

0:00 Hook
1:07 Introduction
3:17 Student accommodation offerings
4:47 Project’s common areas
5:09 Project’s building design
5:33 Company background
7:41 Nairobi + Kenya market size
10:12 Locating “micro-locations” for projects
12:05 Two key financing strategies

12:28 1. Green bond financing
16:48 Green bond sustainability aspect
19:22 Green bond lessons learned

19:58 2. REIT financing
21:19 “Virtuous self-financing cycle”
23:18 Long-term return on REITs
26:25 REITs lessons learned
27:37 Future development opportunities

Presented as part of The Essential Housing Campaign, a community-building campaign, led by The Housing Innovation Collaborative, to build more housing for our essential workers in the communities they serve, in Los Angeles and beyond.

#innovativefinancing