Qwetu, Qejani operator posts KSh 1.52B Profit as Refinancing Offsets Rental Revenue Slide

Qwetu and Qejani operator Acorn Investment Management Limited closed 2025 with a combined net profit of KSh 1.52 Bn across its two real estate investment trusts, up 9.4%.

• •The headline figure understates the year's defining financial event: a 590 basis point reduction in borrowing costs at the income REIT that rescued profit growth at a trust whose rental revenue was contracting.
• •The Acorn Student Accommodation Income REIT posted a net profit of KSh 670.16 Mn, up 20.6% from 555.61 Mn, while the Development REIT earned KSh 854.22 Mn, marginally ahead of KSh 839.91 Mn in 2024.
• •Combined assets under management grew 11% to 29.3 Bn across a portfolio approaching 21,000 student beds in Nairobi and, for the first time, in Kenya's Tier 2 university towns.

The two trusts operate as an integrated pipeline with the D-REIT developing purpose-built student residences under the Qwetu and Qejani brands using a combination of equity and debt, stabilizes them to target occupancy levels, then transfers completed assets to the I-REIT, which holds them as permanent income-generating properties and distributes rental proceeds to unitholders.

At year-end, Qwetu and Qejani Chiromo and Qwetu and Qejani Bogani East were classified as held for sale at a combined carrying value of KSh 6.91 Bn, with their transfer to the I-REIT under way at a consideration to be determined by independent valuers under Capital Markets Authority regulations.

I-REIT: the balance sheet does what the income statement could not

• •Rental income at the I-REIT declined 3.0% to KSh 1,049.58 Mn, with residential revenue the primary drag. The trust cited disruptions from a disjointed academic calendar at key anchor institutions, an exposure that a growing institutional partnership network, now at 99 universities and colleges from 92 at the start of the year, is designed to mitigate. Seven new agreements were signed in the first half alone.
• •The profit recovery came from a financing decision executed mid-year. Between January and July 2025, the trust reduced total borrowings from KSh 2.5 Bn to KSh 1.9 Bn and lowered its weighted average interest rate from 17% to 11.1%, capturing the benefit of the Central Bank of Kenya's monetary easing cycle, which has brought the benchmark policy rate to 8.75% as of February 2026. At a KSh 1.9 Bn debt load, each 100 basis points of rate reduction translates to approximately KSh 19 Mn in annual interest savings. The aggregate effect was a 27.8% fall in finance costs from KSh 440.44 Mn to KSh 318.07 Mn, a reduction of KSh 122.37 Mn that passed almost entirely to profit.
• •The seven-property, 4,539-bed portfolio was independently valued at 10.94 Bn at year-end, producing a KSh 363.24 Mn fair value gain. Mature assets maintained occupancy of 91% to 95%. The gearing ratio improved to 16% from 22%, within the trust's 15% to 40% target band.

Net asset value rose 13.2% to KSh 9,194.89 Mn, implying a NAV per unit of approximately KSh 24.30, against a traded price of KSh 23.24 on the NSE Unquoted Securities Platform as of 19 March 2026, a discount of approximately 4.4%.

The trust declared total distributions of KSh 311.17 Mn for the year, equivalent to KSh 0.84 per unit and 38% above the KSh 225.37 Mn paid in 2024, marking its ninth consecutive half-year payout since inception in February 2021. Cumulative distributions since launch exceed 828 Mn. Basic earnings per unit rose to KSh 1.83 from KSh 1.59.

ASA I-REIT: Key Financial Metrics

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D-REIT: an operating performance obscured by the cost of growth

• •The D-REIT's near-flat profit conceals a materially stronger operating year. Rental income more than doubled to KSh 420.14 Mn from KSh 181.71 Mn as Qwetu and Qejani Chiromo, Kenyatta University and Hurlingham properties reached full operation, lifting the trust's operational bed count to approximately 7,100. Fair value gains on the KSh 16.20 Bn investment property portfolio reached KSh 1,717.09 Mn, up 36.2%, with operating profit at KSh 1,719.24 Mn.
• •The gains were absorbed by the cost of financing an accelerating construction programme. Finance costs rose 158.3% to KSh 900.61 Mn as group borrowings reached KSh 8,391.41 Mn, comprising a 3,535.23 Mn ABSA Bank development facility at 12.96%, a KSh 3,281.77 Mn KCB Bank facility at 14.75%, and KSh 1,574.42 Mn in commercial paper raised from Jubilee, ICEA Lion and Ziidi money market funds in November 2025 at 13%, structured to diversify the funding base and reduce overall debt cost. The gearing ratio rose to 48% from 44%.
• •Basic earnings per unit declined to KSh 2.98 from 3.05 as new unit issuance outpaced profit growth. No dividend was declared.

Capital expenditure commitments at year-end stood at KSh 4.28 Bn against KSh 2.84 Bn in 2024, spanning active construction in Nairobi CBD, Eldoret and Kakamega. The Nairobi CBD Larch Properties development, targeting students at the University of Nairobi and the Technical University of Kenya, is 52% complete with KSh 950.54 Mn in remaining committed spend.

In Eldoret, the Lancewood Properties development will add 2,291 beds at a remaining commitment of KSh 2,054.28 Mn. The Spicebark Properties development in Kakamega, adjacent to Masinde Muliro University, broke ground in August 2025 and is 3% complete. Both Eldoret and Kakamega represent the trust's first construction activity outside Nairobi County.

The completion of the Chiromo and Bogani East transfers to the I-REIT remains the most consequential near-term event for both vehicles. It will expand the I-REIT's income base, materially reduce the D-REIT's debt load, and replenish the development capital needed to sustain a pipeline that, by the end of 2025, had active commitments across four sites in two counties.

ASA D-REIT: Key Financial Metrics