Acorn eyes Nairobi's young workers with new Sh2.2b housing project

Acorn Holdings Ltd has received regulatory approval from the Capital Markets Authority (CMA) to roll out a new build-to-rent development Real Estate Investment Trust (D-Reit).

The housing projects will be located near major employment centres such as Nairobi’s CBD, Upper Hill, Westlands, Industrial Area, and emerging business districts to reduce commuting time and costs for young workers.

The Sh2.2 billion is for affordable rental housing targeted at young urban professionals living and working in Nairobi.

The new structure, known as the Acorn Build-to-Rent D-Reit (ABTR D-Reit) marks one of the most significant expansions of purpose-built rental housing in Kenya’s fast-evolving property market.

The Reit is designed to develop large-scale, professionally managed residential complexes meant for young adults aged between 20 and 30, a demographic that forms the backbone of Nairobi’s labour force but continues to face acute housing shortages.

Many in this segment are recent graduates, early-career employees, gig workers, entrepreneurs, and young professionals who find themselves priced out of quality accommodation close to workplaces in Nairobi’s commercial and industrial hubs.

Acorn’s new Reit seeks to address this gap by combining modern living standards with sustainable building practices and long-term financing structures. To anchor the ABTR D-Reit, three institutional partners have committed $17 million (Sh2.2 billion) in equity financing.

The Private Infrastructure Development Group (PIDG), through its project development arm InfraCo, has provided the largest share at Sh1.3 billion.

Shelter Afrique Development Bank has committed Sh258 million, while Acorn Holdings has contributed Sh645 million. Stanbic Bank Kenya Ltd and SBG Securities played the role of lead transaction advisor for the structure.

Acorn Group CEO Edward Kirathe said the CMA approval represents a pivotal moment in widening access to modern rental housing across Nairobi and other African cities.

“The launch of the Acorn Build-To-Rent (ABTR) D-Reit marks another important milestone in our journey to provide Urban Africa with rental housing solutions,” he said. “We will be launching the Reit with upfront committed capital from institutional investors, including Acorn, PIDG and Shelter Afrique Development Bank. The new Reit continues to deepen our participation and innovation in the capital markets and wider Kenyan economy.”

Kirathe noted that the upcoming developments under the D-Reit will mirror the quality and sustainability standards of Acorn’s established Qwetu and Qejani student housing brands.

Certified properties

Acorn currently operates 20 International Finance Corporation Excellence in Design for Greater Efficiencies (IFC EDGE)-certified properties, an indicator of resource-efficient building design.

“These new rental units will target different pockets of the youth market, including higher-income young professionals stuck in the mortgage gap and those who prefer more affordable shared living options,” he said.

He said each development will prioritise safety, affordability, climate resilience, and efficient use of energy and water. PIDG’s Head of Investment Management for InfraCo Claire Jarratt hailed the approval as both a housing breakthrough and a capital markets innovation. “The initiative will not only enable young urbanites to live in closer proximity to work and social life, but will also develop Kenya’s domestic capital markets, unlocking further capital to scale access to such housing,” she said. Jarratt added that Acorn’s consistent use of green-building standards aligns strongly with PIDG’s mission of supporting climate-resilient urban growth.

The building designs incorporate features meant to enhance the safety and comfort of young female professionals, including secure access systems, well-lit common areas, and thoughtfully designed private spaces.

The facilities will also include inclusive features to accommodate male residents and persons with disabilities.

Shelter Afrique Development Bank Managing Director Thierno-Habib Hann said the institution’s investment underscores its commitment to improving the quality of housing available to Africa’s expanding urban youth demographic. “Nairobi is one of Africa’s fastest-growing cities, with a youthful population that is dynamic, entrepreneurial and increasingly urban,” he said.

“Yet for too many young professionals, the search for affordable, well-located and secure housing remains a daily struggle. Acorn has demonstrated a clear vision and a proven ability to deliver targeted housing solutions that meet the needs of Nairobi’s urban youth.”Hann said such instruments strengthen transparency, sustainability, and long-term investment in Africa’s real estate sector.

Green bond

Shelter Afrique has previously supported a range of affordable housing initiatives across the continent, but the Acorn D-Reit marks one of the most youth-focused rental housing investments in the region. PIDG has been supporting Acorn since 2019, including through the pioneering green bond and two earlier Reits, which together mobilised $31.36 million (Sh4.08 billion) from Kenya’s capital markets.

These partnerships helped Acorn scale its purpose-built student accommodation, setting a blueprint for the new urban rental model now being expanded through the ABTR D-Reit.

The establishment of the D-Reit was supported by a consortium of professional service providers, with NCBA Bank Kenya serving as a trustee.

TripleOKLaw, Gowling WLG and Norton Rose Fulbright acted as legal advisors. Viva Africa Consulting served as the tax advisor, while PwC undertook the role of Reporting Accountant.

The Reit is expected to catalyse further investment into Kenya’s rental housing market, which analysts say remains significantly undersupplied relative to demand.