Last year was good for Landlords, especially those housing university students. Landlords who own multiple hostels under the Qwetu and Qejani brands earned record rents in 2024, highlighting why investing in students is a smart decision.
The 2024 Acorn Student Accommodation Income-REIT (ASA I-REIT) annual report reveals that approximately 7,300 tenants generated a record KES 1.1 billion in rental income, representing a nearly 50% year-on-year increase from the previous year. These results were the result of high occupancy rates, increased bed capacity, and strict cost management.
Acorn’s seven purpose-built student accommodations (PBSAs) or hostels, which collectively provide 4,500 beds, recorded an impressive 87% average occupancy.
Of these properties, Qwetu Aberdare Heights II was the star performer with an average 97% occupancy rate. The PBSA located along USIU Road is almost exclusively occupied by USIU students. Its sister property, Qwetu Aberdare Heights I had a 95% occupancy rate.
Does this mean USIU students make the best tenants? A story for another day.
Additionally, tenant satisfaction remained high, according to survey findings. The annual report notes that all seven properties recorded an annual Customer Satisfaction (C-SAT) score of 5.1, above the minimum threshold of 4.2, with an impressive.
The management stated that this score underscored Qwetu’s residents’ increasing satisfaction with both service delivery and the overall living experience, driven by a streamlined onboarding process, revitalized communal areas designed to encourage interaction, and thoughtfully curated resident events that deepened community connections.
More impressive is that the PBSAs were able to increase rents and thereby outpace the rate of inflation, shielding landlords’ investments. The ASAI REIT rental escalation averaged 5.4% in 2024, above the 5.2% average inflation rate in Kenya recorded in the same year. The rental escalation enabled the ASA I-REIT to hedge against inflation.
Looking Ahead
Acorn’s management says that they expect the good times to roll ON based on strategic initiatives they are undertaking.
First, Acorn is expanding its target tenant base to include TVET students, supplementing the primary demographic of university students.
Second, the management has cited increasing business-to-business (B2B) partnerships. Currently, the ASA I-REIT has partnerships with the Mastercard Foundation, M-PESA Foundation, Aga Khan University Hospital, and HEVA fund, which sponsor student accommodation at its properties. These partnerships provide steady occupancy for the properties, further cementing the ASA I-REIT’s ability to maintain high occupancy rates.
This means steady rents for the 7,300 landlords who own these properties through platforms such as Vuka. Vuka is Kenya’s first regulated investment platform that allows retail investors to invest in the ASA I-REIT, effectively allowing them to own a stake in Qwetu and Qejani student residences, in essence, becoming landlords.
Related Content: The Qwetu REITs Journey That Kenyans Are Investing In From Ksh 5,000
