Acorn D REIT OM

2020
ACORN STUDENT ACCOMMODATION

DEVELOPMENT REIT
OFFERING MEMORANDUM
Acorn Development REIT Offering Memorandum
IMPORTANT NOTICE
THIS DOCUMENT IS IMPORTANT FOR CONSIDERING WHAT ACTION TO TAKE AND REQUIRES YOUR
CAREFUL ATTENTION AS IT INCLUDES LEGAL, MARKET, AS WELL AS HISTORICAL, CURRENT AND
FUTURE FINANCIAL INFORMATION.
This Offering Memorandum is issued by Acorn Holdings Limited (the “Promoter” or “Acorn”) in respect to the issue and
subscription of the Units being issued by the Acorn Student Accommodation Development Real Estate Investment Trust
(the “Acorn D-REIT”) and has been prepared in accordance with the Capital Markets Act, Chapter 485A (the “Act”) and
the Capital Markets (Real Estate Investment Trusts) (Collective Investment Schemes) Regulations, 2013 (the
“Regulations”)
This Offering Memorandum is issued to provide information in relation to the Restricted Offer to Professional Investors
of 210,791,300 Units in the Acorn D-REIT at an Offer Price of KES 20 as promoted by Acorn (the “Offer”).
In making your investment decision to invest in the Units you should be aware that there is very limited, if any, recourse
to the assets of the Issuer or the Trustee
Your investment in Units and as a Security Holder in the Acorn D-REIT is as an equity investor. Distributions of income and
return of capital are not guaranteed and are entirely dependent on the performance of the assets of the Acorn D-REIT.
Your rights in most cases will be limited solely to the assets of the Acorn D-REIT.
Should the Trustee exercise its authority to borrow on behalf of the Acorn D-REIT then the rights of Security Holders rights
to distributions and to the assets of the Acorn D-REIT will rank after the liabilities to creditors.
The Trustee, Acorn D-REIT Manager and other service providers are also entitled to receive payment of fees and expenses
ahead of payments to Security Holders.
Application has been made to the Capital Markets Authority (“Authority”) and the Acorn D-REIT has been authorized by
the Authority1. However, as a matter of policy, the Authority assumes no responsibility for the correctness of any
statements or opinions made or reports contained in this Offering Memorandum. In addition, the Authority has approved
this Offering Memorandum. The approval by the Authority is not a recommendation nor a statement by the Authority in
relation to the suitability of the Acorn D-REIT for investment or as to the risks and the Authority has no liability.
Offering Memorandum
This Offering Memorandum is to be read in conjunction with all documents which are deemed to be incorporated herein
by reference (see “Documents available for inspection”). This Offering Memorandum shall be read and construed on the
basis that such documents are incorporated into and form part of this Offering Memorandum.
No Units can be issued based on this Offering Memorandum more than six months after the stated date of publication.
No person has been authorised to give any information nor make any representation not contained in or not consistent
with this Offering Memorandum or any other information supplied in connection with the Acorn D-REIT and, if given or
made, such information or representation must not be relied upon as having been authorised by the Trustee, the
Promoter or any advisor to the Offer.
Each prospective investor contemplating the purchase of any should make its own independent investigation of the
financial condition and affairs, and its own appraisal of the condition (financial or otherwise) of the Acorn D-REIT. If you
are in any doubt about the contents of this Offering Memorandum or the nature of the transaction or investment or the
risks attached to an investment in the Units, then you should consult a person licensed under the Act who specialises in
advising on investments in or acquisitions of units, including units in a real estate investment trust.
All references in this document to “Shillings”, “KES”, “Kenya Shillings” and “Ksh”” refer to the currency of the Republic of
Kenya.
Where any term is defined within the context of any particular clause or section in this Offering Memorandum, the term
so defined, unless it is clear from the clause or section in question that the term so defined has limited application to the
relevant clause or section, shall bear the meaning ascribed to it for all purposes in this Offering Memorandum, unless the
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context otherwise requires. Expressions defined in this Offering Memorandum shall bear the same meanings in
supplements to this Offering Memorandum, which do not themselves contain their own definitions.
Supplementary Offering Memorandum
If, prior to the closing of the Offer, a significant new development occurs in relation to the information contained in this
Offering Memorandum or a material mistake or inaccuracy is found in the Offering Memorandum that may affect the
assessment of the Acorn D-REIT, a supplement to this Offering Memorandum will be published. Statements contained in
any such supplement (or contained in any document incorporated by reference therein) shall, to the extent applicable
(whether expressly, by implication or otherwise), be deemed to modify or supersede statements contained in this Offering
Memorandum or in a document that is incorporated by reference in this Offering Memorandum. Any statements so
modified or superseded shall not, except as so modified or superseded, constitute a part of this Offering Memorandum.
Forward-looking statement
This Offering Memorandum contains “forward-looking statements” relating to the Acorn D-REIT’s proposed business.
These forward-looking statements can be identified by the use of forward-looking terminology such as “believes”,
“expects”, “may”, “is expected to”, “will”, “will continue”, “should”, “would be”, “seeks” or “anticipates” or similar
expressions or the negative thereof or other variations thereof or comparable terminology, or by discussions of strategy,
plans or intentions. These statements reflect the current views of Acorn with respect to future events and are subject to
certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements
of the Acorn D-REIT to be materially different from the future results, performance or achievements that may be
expressed or implied by such forward-looking statements. Some of these factors are discussed in more detail under “Risk
Factors”. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those described in this Offering Memorandum as anticipated, believed, estimated
or expected.
Industry, Economic and Other Information
The Promoter and the Transaction Adviser obtained the industry and economic data, including industry forecasts, used
throughout this Offering Memorandum from internal surveys, market research, publicly available information and
industry publications. They have also made statements on the basis of information from third-party sources that we
believe are reliable. Industry and government publications, including those referenced here, generally state that the
information presented therein has been obtained from sources believed to be reliable, but that the accuracy and
completeness of such information is not guaranteed. Although the Promoter and the Transaction Adviser have no reason
to believe that any of this information or these reports is inaccurate in any material respect, they have not independently
verified the industry or other data provided by third parties or by industry or other publications. The Promoter and the
Transaction Adviser do not make any representation as to the accuracy of such information.
Selling Restrictions Summary
Potential investors should not assume that the information in this Offering Memorandum is accurate as at any date other
than its date of publication. No person is or has been authorised to give any information or make any representation in
connection with the Offer, other than as contained in this Offering Memorandum. Delivery of this Offering Memorandum
at any time after the date hereof will not under any circumstances, create any implication that there has been no change
or that the information set out in this Offering Memorandum is correct at any time since its date. This Offering
Memorandum does not constitute an offer to issue or sell, or the solicitation of an offer to subscribe for or purchase, any
Units to any person in any jurisdiction where it would be unlawful to make such offer or solicitation in such jurisdiction.
No Units have been marketed to, nor are they available for purchase in whole or in part by, the public in any jurisdiction
other than Kenya in conjunction with the Offer. In particular, Units do not qualify for distribution under any of the relevant
laws of Canada, Australia or Japan, nor has any prospectus in relation to the Units been lodged with or registered by the
Canadian Securities Administrators, Australian Securities and Investments Commission or the Japanese Ministry of
Finance. Accordingly, subject to certain exceptions, the Units may not be, directly or indirectly, offered, sold, taken up,
delivered or transferred in or into or within Canada, Australia and Japan.
The Offer consists of an offering outside the United States of America, its territories and possessions, any state of the
United States, and the District of Columbia (the “United States”) of Units pursuant to Regulation S (“Regulation S”) under
the US Securities Act 1933, as amended (the “Securities Act”). The Units have not been and will not be registered under
the Securities Act or under the securities laws of any state of the United States. Accordingly, subject to certain exceptions,
the Units may not be, directly or indirectly, offered, sold, pledged, taken up, delivered or otherwise transferred in or into
or within the United States absent registration or an exemption from registration under the Securities Act.
This Offering Memorandum is only addressed to and directed at persons in member states of the European Economic
Area (the “EEA”) who are “qualified investors” within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive
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2003/71/EC as amended, including by Directive 2010/73/EC) and related implementation measures (“Qualified
Investors”).
This Offering Memorandum must not be acted on or relied on (i) in the United Kingdom, by persons who are not qualified
investors ("Qualified Investors") within the meaning of Article 2(e) of Regulation (EU) No. 2017/1129 on the prospectus
to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing
Directive 2003/71/EC (the "Prospectus Regulation") and (ii) in any member state of the EEA other than the United
Kingdom, by persons who are not Qualified Investors. Any investment or investment activity to which this Offering
Memorandum relates is available only to Relevant Persons in the United Kingdom and Qualified Investors in any member
state of the EEA other than the United Kingdom and will be engaged in only with such persons.
This Offer does not constitute a public offer or the solicitation of a public offer in the United Kingdom to subscribe for or
purchase any Units nor a marketing in the United Kingdom or the EU under the Alternative Investment Fund Managers
(the "AIFM Directive") or under the applicable implementing legislation (if any) of the United Kingdom or any EEA member
state. To the extent that any Units are made available for purchase to persons in the United Kingdom, they shall only be
made available to Qualified Investors (i) who are persons who have professional experience in matters relating to
investments falling within the definition of “investment professionals” in article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 (as amended) (the "FPO"); (ii) who are high net worth bodies
corporate, unincorporated associations and partnerships or the trustees of high value trusts falling within article 49(2)(a)
to (d) of the FPO, or (iii) who are other persons to whom it may otherwise lawfully be communicated (“Relevant Persons”).
The Offer does not constitute an ‘‘offer to the public’’ (as such expression is defined in the South African Companies Act
and this Offering Memorandum does not, nor is it intended to, constitute a ‘‘registered prospectus’’ (as that term is
defined in the South African Companies Act) prepared and registered under the South African Companies Act. Accordingly,
to the extent that the Units are offered for subscription or sale in South Africa, such Offer is made: (i) only to selected
persons falling within one of the specified categories listed in Section 96(1)(a) of the South African Companies Act; and/or
(ii) selected persons, acting as principal, acquiring Offer Shares for a total acquisition cost of ZAR1,000,000 or more, as
contemplated in terms of Section 96(1)(b) of the South African Companies Act, and to whom the Offer will specifically be
addressed, and only by whom the Offer will be capable of acceptance ("Appropriate Persons").
Consents
Renaissance Capital (Kenya) Limited as Lead Transaction Advisor and Sponsoring Broker; TripleOK Law Advocates LLP as
Legal Advisors; PricewaterhouseCoopers LLP as Reporting Accountants; Viva Africa Consulting as the Tax Advisors; Tysons
Valuers as the Valuer, have consented in writing to act in the stated capacities and to their names being included in this
Offering Memorandum and have not withdrawn their consent prior to the publication of this Offering Memorandum.
None of the above advisors have been employed on a contingent basis by the Promoter and none of them own Units in
the Acorn D-REIT which would be material to that person or has a material, direct or indirect economic interest in the
Acorn D-REIT.
Legal Opinions
TripleOKLaw Advocates LLP has given and have not withdrawn its consent to the inclusion in this Offering Memorandum
of its Legal Opinion, and the references to its name, in the form and context in which it appears, and it has authorised the
contents of the said Legal Opinion which forms part of the documents for inspection.
Proforma Financial Information
The proforma financial information of the Acorn D-REIT is included in Part 14 of this Offering Memorandum. The proforma
financial information has been reviewed by PricewaterhouseCoopers LLP and their reasonable assurance report is
included in Part 14.
Valuation Report
Tysons, the Valuer, has given and not withdrawn its consent to the inclusion in this Offering Memorandum of its report,
and the references to its name, in the form and context in which it appears, and it has authorised the contents of the said
report.
This Offering Memorandum is dated: 16th December 2020
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DECLARATION
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TRANSACTION SUMMARY
“THIS IS ONLY A SUMMARY AND INVESTORS SHOULD READ AND UNDERSTAND THE WHOLE
PROSPECTUS OR OFFERING MEMORANDUM”
Term Details
Summary objectives of The Acorn D-REIT is being established alongside the Acorn I-REIT. It is envisioned
the Acorn D-REIT that the Acorn D-REIT will invest, in the acquisition of marketing, letting and
stabilisation of income generating rental housing primarily focused on PBSA, the
undertaking of incidental and connected activities and activities related to the
REIT Assets and any such other activities as may be authorized by the Regulations,
in each case, in accordance with the provisions of the Scheme Documents.
(see Section 4.1.5).
The investment objectives of the Acorn D-REIT are to invest in assets that will
enable the Acorn D-REIT to:
• provide via development the most sought after, quality and secure PBSA
within the Nairobi Metropolitan area (Nairobi County and its neighboring
counties); and
• provide an attractive risk-adjusted return profile to investors generated
from the realized sales of developed and operational PBSA projects.
Eligible investors Investment in the Acorn D-REIT is restricted only to Professional Investors
Target Acorn D-REIT IRR 25% (net of fees and expenses) (over a 10-year holding period)
(KES)
Offer Price per Unit KES 20
Offering
In order to ensure the success and further alignment of the return expectations of
investors, the Units in the Acorn D-REIT are being offered as a blended offer with
units in the Acorn I-REIT. As such, investors are expected to hold units in both
REITs at a firm ratio of 30:70 respectively for the Initial Offer i.e. 30% of their
allocation will be in the Acorn D-REIT and 70% in the Acorn I-REIT.
Final allocations will be subject to the Allocation Policy set out in Section 3.8.
Minimum application The minimum subscription per applicant is KES 6,000,000 or 300,000 Units
size
Basis of the Offer Price The Offer Price has been determined by the Promoter in consultation with the
Lead Transaction Advisor on the basis of valuation techniques taking into account
the following:
i. the country’s macro-economic and sector outlook;
ii. independent appraisal values of the various properties;
iii. the Regulations; and
iv. the projected financials of the Acorn D-REIT.
Underwriting The Offer is not underwritten
Minimum aggregate The Offer is subject to a minimum aggregate subscription of KES 421,582,600
subscription (success (equivalent to 21,079,130 Units or 10% of the Offer) of the gross Offer as well as
rate) receipt of no fewer than seven (7) valid Applications for the Offer.
However, in the event that this minimum amount is not attained, approval may
be sought from the Authority to proceed with the allocation of the Units that are
subscribed for under the Offer.
Issue of Units On completion of the Offer, the Acorn D-REIT will issue Units to successful
Applicants equivalent to the Gross Proceeds received. Each Unit shall confer the
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Term Details
right to one vote at all meetings of Security Holders and to participate pro rata in
any distributions by the Acorn D-REIT.
Use of Funds The promoter, as transferor of the assets set out in Part 5 below will, in exchange
for the initial assets therein set out, subscribe for up to 136,932,000 units or the
equivalent of KES 2,738,644,000. This translates to a 65% stake assuming all units
are taken up. The balance of the purchase price will be paid to the promoter in
cash as per the terms of the agreement for the purchase and assignment of the
partnership interest in the Acorn Project (Two) Limited Liability Partnership. The
expected use of proceeds is provided below. Final allocation will depend on the
outcome of the fundraise.
SOURCES USES
Amount Amount
Source % Use %
KES (‘000) KES (‘000)
REIT Units -
Cash for transfer of
Promoter 2,738,644 65% 1,365,015 32%
asset
swap
D-REIT units Cash payment of
1,477,182 35% 112,167 3%
- cash REIT set up costs
Non-cash
2,738,644 65%
contribution
Total 4,215,826 100% Total 4,215,826 100%
The total authorized number of Units is 500,000,000 with a par value of KES 20
per Unit
NOTE: Promoter stake is indicative and dependent on overall raise
Nature of the REIT The Acorn D-REIT will initially be an unlisted, closed-ended, evergreen D-REIT
domiciled in Kenya, and approved by the Authority. It will predominantly act as
the vehicle for all debt and equity financing of Acorn development projects
focused on the provision of student accommodation.
Trading of the REIT On the launch of the Acorn D-REIT, the Units will not be admitted to trading on
any securities of investment exchange. In order to facilitate trading in the Units by
Security Holders, the Promoter has established an over-the-Counter ("OTC")
trading facility. There is no assurance, however, that an active market in the Units
will develop or that Security Holders will be able to trade their Units at an
acceptable price. Trading of the Units will be limited to Professional Investors and
restricted to a minimum parcel size of KES 5,000,000.
Transferability of Units The Units may only be transferred to persons who qualify as Professional Investors
Distribution of Realized The Regulations do not require Acorn D-REIT, being a D-REIT, to make annual
Capital Gains distributions to the Security Holders. However, the D-REIT Manager may
recommend to the Trustee and the Trustee may distribute any Realized Capital
Gains to the Security Holders if and when the capital gains are realized.
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Term Details
Proposed initial Phase I
projects 1. Qwetu USIU 3 (Rowan Properties LLP)
2. Qwetu USIU 4 (Linden Properties LLP)
3. Qwetu Hurlingham Phase 1 (Beech Properties LLP)
4. Qwetu Bogani East Phase 1 (Spruce Properties LLP)
5. Qejani Bogani East Phase 1 (Spruce Properties LLP)
6. Qwetu Chiromo (Ashvale Properties LLP)
7. Qejani Chiromo (Ashvale Properties LLP)
The projects listed above are being incorporated into the Acorn D-REIT at
different stages of the development lifecycle. As a result, they have been de-
risked to differing extents compared to pure greenfield projects. The extent of
de-risking is reflected in the discount rate that has been used to arrive at their
valuations at which they will be acquired by the Acorn D-REIT. It is clarified that
the valuations will be updated following approval by the Authority and just prior
to the acquisition of the projects by the Acorn D-REIT. The valuations for the
projects are independently undertaken by Tysons Limited. As these projects have
embedded value enhancement at the point of entry into the Acorn D-REIT, they
will not generate the same return profile as subsequent greenfield projects that
will be acquired by the Acorn D-REIT.
Some of the projects above are part of the Green Bond programme and shall
continue to comply with provisions of the Capital Markets Authority Policy
Guidance Note (CMA PGN) on Green Bonds including submission of an annual
green bond report as well as an external verifier assurance opinion.
Future phases of Phase II
projects 1. Qwetu Hurlingham Phase 2
2. Qwetu Bogani East Phase 2
3. Qejani Bogani East Phase 2
Phase II properties are currently held as a land bank, to be developed after

completion of properties in Phase I to control the release of beds into the local
market. The land bank will be held by Acorn and will only be sold to the Acorn D-
REIT at the commencement of the Phase II, so that the Acorn D-REIT bears no
holding costs.
Promoter stake and Acorn has undertaken to acquire a minimum of thirty percent. (30%) of the Units
lock-in in the Offering. This 30% holding will be maintained until either the earlier of the
date on which a Liquidity Event occurs or the date on which the Anchor Investor
ceases to hold Units;
Borrowing policy The Trustee, as advised by the Acorn D-REIT Manager, may use gearing to enhance
the potential for income returns and long-term capital growth, and to provide
capital flexibility. However, the Acorn D-REIT will always follow a prudent
approach for the asset class with regards to gearing and will maintain a
conservative level of aggregate borrowings.
The aggregate borrowing of the Acorn D-REIT shall not exceed a maximum of 60
per cent. (60%) of Total Asset Value, calculated at the time of drawdown unless
approved by the Authority and the Security Holders (acting by way of a Special
Resolution).
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Term Details
Debt may be secured with or without a charge over some or all of the Acorn D-
REIT's assets, depending on the optimal structure for the Acorn D-REIT and having
consideration to key metrics including lender diversity, cost of debt, debt type and
maturity profiles. See section 4.1.6 on the current borrowings that the Acorn D-
REIT holds at establishment.
Green Bond In October 2019, Acorn issued a Green Bond for KES 4.3 billion, the raise was to
provide financing for 6 of the Projects that form the majority of the initial
properties that are being taken over by the Acorn D-REIT, which will be a means
for providing the equity financing for future projects. Following the establishment
of the Acorn D-REIT, the Bond proceeds will form the debt financing in the Acorn
D-REIT and will be used to bring these initial properties to completion and
stabilisation. At this point, the borrowings of the Acorn D-REIT are below the
regulatory borrowing limit.
Acorn will undertake the necessary approvals in order to transfer the Green Bond
structure into the Acorn D-REIT so that it can continue providing the debt financing
for the Initial Assets, which are already a part of the programme, even when the
Green Bond is a part of the Acorn D-REIT.
Connected parties The Promoter, Acorn D-REIT Manager, property manager and development
manager are connected parties, and have entered into agreements with the
Acorn D-REIT to ensure that all transactions remain at arm’s length in the
provision of their relevant services. See section 4.2.7 for the roles to be
undertaken by connected parties.
The Promoter is committed to high standards of corporate governance and to

mitigate any potential conflicts of interest that may arise the Board will maintain
a Corporate Governance Committee composed of at least two (2) independent
and non-executive directors which shall review all Connected Party Transactions.
The Board will establish bifurcated Investment Committees for the Acorn D-REIT
and the Acorn I-REIT, establishing information barriers and ensuring the
confidentiality and integrity of commercially sensitive information while
conducting due diligence on the properties.
All Connected Party Transactions shall be subject to the prior approval of the
Trustee and where required by the Act or the Regulations by the Security
Holders. The Trustee shall take into account the report of the Corporate
Governance Committee before approving any Connected Party Transaction.
Governing law This Offering Memorandum and any contract resulting from the acceptance of an
Application to purchase the Units shall be governed by and construed in
accordance with the Laws of Kenya and it shall be a term of each such contract
that the parties thereto and all other interested parties shall refer any dispute,
controversy or claim arising out of or relating to such contract, or the breach
thereof, to be determined exclusively by arbitration under the arbitration rules of
the London Court of International Arbitration. The arbitration shall be conducted
in Johannesburg, South Africa.
Key Investment i) Favorable market fundamentals in the PBSA sector;
Highlights ii) Investment decisions made on thematic fundamentals, rather than
speculative or opportunistic factors;
iii) Active and healthy pipeline of high-quality assets;
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Term Details
iv) Experienced management team with a long track record of successfully
completing real estate projects;
v) High investment returns;
vi) Strong Promoter alignment with investor interests;
vii) Downside protection for investors;
viii) Clear legal separation between the Acorn D-REIT and the Promoter;
ix) Strong corporate governance and shareholder support;
x) Social impact; and
xi) Green status with a focus on sustainability of assets;
See Section 3.3 for further details.
Summary of Investment The mandate of the Acorn D-REIT is to undertake the development of a portfolio
Policy of high-quality, affordable rental housing projects focused on the provision of
accommodation for students in the Nairobi Metropolitan area (Nairobi County
and adjoining Counties), in close vicinity of universities and education institutions
(within approximately 2.5 kilometres). The Acorn D-REIT will generate significant
returns due to its focus on underserved sectors with significant long-term macro-
economic and demographic tailwinds. Additionally, Acorn Holdings Limited is
committed to promoting sustainability and so the Acorn D-REIT will aim to follow
and to promote good sustainability practices, to reduce the environmental impact
of its activities and to help customers do the same. The portfolio will be actively
managed to deliver significant capital appreciation and dividends for Security
Holders.
The Acorn D-REIT’s portfolio at establishment will comprise of student

accommodation development projects in prime locations in close vicinity to major
universities and education institutions at different stages of development. Some
of these projects are part of the Green Bond programme and shall continue to
comply with provisions of the Capital Markets Authority Policy Guidance Note
(CMA PGN) on Green Bonds including submission of an annual green bond report
as well as an external verifier assurance opinion. See section 3.3.12 for details on
the Green Status.
Summary of Key Risks a. Risks associated with the Acorn D-REIT
i. Land acquisition risk
ii. Execution risk
iii. Construction input risk
iv. Operational risk
v. Interest rate risk
vi. Project exit risk
vii. Concentration risk
viii. Investment risk
ix. Foreign exchange risk
x. Credit risk
b. Country and industry risk factors

i. Country macroeconomic environment and political
ii. Changes in the regulatory and taxation environment
iii. Health and safety
iv. Increased competition
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Term Details
c. Risks associated with investing in REITs
i. Liquidity risk
ii. Pricing risk
d. Risks associated with a pandemic

i. Enrolment risk
ii. Demand Preferences risk
iii. Health & Safety risk
iv. Valuation risk
See PART 7: for further details
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TABLE OF CONTENT
IMPORTANT NOTICE......................................................................................................................................... i
DECLARATION ................................................................................................................................................. iv
TRANSACTION SUMMARY ................................................................................................................................ v
TABLE OF CONTENT ..........................................................................................................................................0
PART 1: CORPORATE INFORMATION ..........................................................................................................2
1.1. The REIT........................................................................................................................................2
1.2. Promoter ......................................................................................................................................2
1.3. Advisors and Experts to the Transaction.........................................................................................2
PART 2: DEFINED TERMS AND ABBREVIATIONS...........................................................................................5
PART 3: KEY FEATURES OF THE OFFER....................................................................................................... 13
3.1. The Offer and Use of Proceeds..................................................................................................... 13
3.2. Offer Timetable........................................................................................................................... 13
3.3. Key Investment Highlights ........................................................................................................... 13
3.4. Application Procedure ................................................................................................................. 17
3.5. Application Money ...................................................................................................................... 18
3.6. Rejection Policy........................................................................................................................... 18
3.7. Refund Policy .............................................................................................................................. 19
3.8. Allocation Policy ......................................................................................................................... 19
3.9. Foreign Investors ........................................................................................................................ 20
PART 4: PARTICULARS OF THE ACORN D-REIT ........................................................................................... 21
4.1. Details and Description of the Acorn D-REIT Structure .................................................................. 21
4.2. Details of the Promoter ............................................................................................................... 24
4.3. Details of the REIT Manager ........................................................................................................ 31
4.4. Details of the Development & Property Manager ......................................................................... 41
4.5. Details of the Trustee .................................................................................................................. 43
4.6. Details of the Property Valuer ..................................................................................................... 53
4.7. Details of the Project Manager Certifier ....................................................................................... 58
PART 5: ACORN STUDENT ACCOMMODATION DEVELOPMENT REIT BUSINESS OVERVIEW .......................... 64
5.1. Development Process overview ................................................................................................... 64
5.2. Acorn-D-REIT Products Overview ................................................................................................. 65
PART 6: INVESTING IN ACORN DEVELOPMENT REIT (‘ACORN D-REIT’)........................................................ 77
6.1. Fees, Costs and Expenses............................................................................................................. 77
6.2. Distribution Policy and Factors Determining Distribution .............................................................. 79
6.3. Transferability of Acorn Units, Pricing and Redemption ................................................................ 80
PART 7: RISK FACTORS ............................................................................................................................. 81
7.1. Risks associated with the Acorn D-REIT ........................................................................................ 81
7.2. Country and industry risk factors ................................................................................................. 84
7.3. Risks associated with investing in REITs ....................................................................................... 86
7.4. Risks associated with pandemic ................................................................................................... 86

PART 8: SUMMARY OF THE TRUST DEED AND SCHEME DOCUMENTS ......................................................... 87
8.1. Summary of Key Aspects of the Trust Deed .................................................................................. 87
8.2. Summary of Material Provisions in Other Scheme Documents ...................................................... 99
PART 9: KENYA ECONOMIC OVERVIEW ................................................................................................... 104
9.1. Country Overview ..................................................................................................................... 104
9.2. Vision 2030 Programme ............................................................................................................ 105
9.3. Recent Economic performance .................................................................................................. 106
PART 10: REAL ESTATE SECTOR OVERVIEW ............................................................................................... 109
10.1. Industry Overview..................................................................................................................... 109
10.2. PBSA Market Overview ............................................................................................................. 110
10.3. PBSA sector growth drivers ....................................................................................................... 112
10.4. PBSA in Africa ........................................................................................................................... 119
10.5. Summary of Market Opportunity ............................................................................................... 119
PART 11: STATUTORY & GENERAL INFORMATION ..................................................................................... 121
11.1. Meetings of Security Holders ..................................................................................................... 121
11.2. Voting Rights of the Security Holders ......................................................................................... 121
11.3. Taxation ................................................................................................................................... 122
11.4. Material contracts ..................................................................................................................... 123
11.5. Consents ................................................................................................................................... 123
11.6. Documents available for inspection ........................................................................................... 124
PART 12: LEGAL OPINION......................................................................................................................... 125
PART 13: PRO-FORMA FINANCIAL INFORMATION ..................................................................................... 157
PART 14: PROMOTER FINANCIAL STATEMENTS......................................................................................... 158
PART 15: REIT MANAGER FINANCIAL STATEMENTS ................................................................................... 168
PART 16: TRUSTEE FINANCIAL STATEMENTS ............................................................................................. 173
PART 17: DEVELOPMENT MANAGER FINANCIAL STATEMENTS .................................................................. 176
PART 18: SAMPLE APPLICATION FORM FOR UNITS.................................................................................... 181
Page | 1
PART 1: CORPORATE INFORMATION

1.1. The REIT
Registered name and office of the Acorn D-REIT:
Acorn Student Accommodation D-REIT

Acorn House, 2nd Floor,
97 James Gichuru Rd,
Lavington, Nairobi
Established as a common law unincorporated trust via a Trust Deed dated 16th December 2020 and approved
by the Authority as a REIT Scheme on 16th December 2020.
1.2. Promoter
Registered name and office of Acorn Holdings Limited (the “Promoter” or the “Issuer”)
Promoter Acorn Holdings Limited

c/o Intercontinental Trust Limited
Level 3, Alexander House,
35 Cybercity, Ebene 72201,
Mauritius
Tel: +254 (20) 2592671/2
Email: [email protected]
1.3. Advisors and Experts to the Transaction
Transaction Advisor& Renaissance Capital Kenya Limited

Institutional Placement 10th Floor, Pramukh Tower
Agent Westlands Road, Westlands
P.O. Box 40560-00100
Nairobi, Kenya
Tel: +254 (20) 3682000
[email protected]
Tax Advisor Viva Africa Consulting LLP

3rd Floor, Kiganjo House
Rose Avenue, Off Denis Pritt Road
P.O. Box 50719-00200
Nairobi, Kenya
Tel: +254 (20) 2465567
[email protected]
Legal Advisor TripleOKLaw Advocates LLP
5th Floor, Block C, ACK Garden House,
1st Ngong’ Avenue, off Bishops Road
P.O. Box 43170-00100
Nairobi, Kenya
[email protected]
International Legal Advisor Gowling WLG

4 More London Riverside, London, SE1
2AU, United Kingdom, DX 132076
London Bridge 4
Tel: +44 (0) 370 904 1099
[email protected]
Page | 2
Trustee The Co-operative Bank of Kenya Limited

Co-operative Bank House
Haile Selassie Avenue
P.O. Box 48231-00100
Nairobi, Kenya
Tel: +254 703 027 000
Email:
[email protected];
[email protected]
REIT Manager Acorn Investment Management Limited

Acorn House, 2nd Floor,
Lavington, Nairobi
P.O. Box 13759-00100
Nairobi, Kenya
Tel: +254 (20) 2592671/2
Development & Property Acorn Management Services Limited

Manager Acorn House, 2nd Floor,
Lavington, Nairobi
P.O. Box 13759-00100
Nairobi, Kenya
Tel: +254 (20) 2592671/2
Project Manager Certifier Aegis Development Solutions Ltd

6th Floor Suite 603, Blue Violets Plaza
Kindaruma Road, Kilimani-Nairobi
T: +254 0733 633 004/+254-020-
2730961
Email: [email protected]
Property Valuer Tysons Limited

1st Floor, Jubilee House,
Wabera Street
Tel: + 254 (20) 222 2011
Reporting Accountant & PricewaterhouseCoopers LLP
Auditor PwC Tower,
Waiyaki Way / Chiromo Road,
Westlands,
P.O Box 43963-00100
Nairobi, Kenya
Registrar CDSC Registrars
1st Floor, Occidental Plaza,
Muthithi Road, Westlands
Tel: +254 (20) 258 8000
Green Buildings International Finance Corporation

Certification Delta Center, Menengai Road
Upper Hill, Nairobi
Tel: +254 (20) 2937200
Page | 3
Placement Agents Stanbic Centre,

Chiromo Road, Westlands
P.O. Box 30550 - 00100
Nairobi, Kenya
16th Floor, JKUAT Towers,

Kenyatta Avenue
P.O Box 13714-00800
Nairobi Kenya.
Orbit Place, 2nd Floor,

Westlands Road
P.O. Box 40005-00100,
Nairobi, Kenya
Crawford Business Park

State House Rd
Nairobi Kenya
Tel: 020 7606026-37
Page | 4
PART 2: DEFINED TERMS AND ABBREVIATIONS

In this Offering Memorandum (including its annexures), unless the context indicates otherwise, references to
the singular include the plural and vice versa, words denoting one gender include the others, expressions
denoting natural persons include juristic persons and associations of persons and vice versa, and the words in
the first column have the meanings stated opposite them in the second column, as follows:
Term or Abbreviation Meaning
“Acorn D-REIT” or “D- Acorn Student Accommodation Development REIT – the development real estate
REIT” investment trust that is the subject of this Offering Memorandum;
“Act” the Capital Markets Act, Chapter 485A of the Laws of Kenya, (Amended by Act No.
48 of 2013);
“Acorn” or “Promoter” Acorn Holdings Limited;
or “Issuer”
“Acorn Group” the Promoter, AMSL, the Acorn D-REIT Manager and any controlling entity,
holding company, subsidiary, associated company and/or Affiliate of any such
entity;
“Acorn D-REIT has the meaning set forth in paragraph 4.3.3;
Investment
Committee”
“AIML” or “REIT Acorn Investment Management Limited;
Manager”
“AML” Anti-money laundering;
“AMSL” or Acorn Management Services Limited;

“Development
Manager” or “Property
Manager”
“Anti-Bribery and Tax the UK Bribery Act 2010, the UK Criminal Finances Act 2017, the US Foreign
Evasion Laws” Corrupt Practices Act 1977, the Kenyan Anti-Corruption and Economics Crimes
Act, Act No. 3 of 2003, the Proceeds of Crime and Anti-Money Laundering Act,
2009, the Prevention of Terrorism Act, 2012 and the Kenyan Bribery Act 2016 and
all other laws and regulations relevant to countering bribery, corruption and anti-
money laundering in any jurisdiction;
“Anchor Investor” shall be InfraCo Africa Investment Limited so long as it holds Units, or any units in
the Acorn I-REIT without a minimum hold
“Anchor Investor any Director appointed to the Board by Infraco Africa Investment Limited
Director”
“Applicant(s)” one or more prospective investor that submits a completed application during the
Offer Period, for purposes of subscribing for the offer of Units in terms of the
Offer;
“Application Form” the application form to be used by prospective investors for purposes of
subscribing for the offer of Units in terms of the Offer, a specimen of which is
attached to this Offering Memorandum and which will be made available to
prospective investors;
“Acorn I-REIT” Acorn Student Accommodation I-REIT, the income real estate investment trust
that is being promoted alongside the Acorn D-REIT;
"Aggregate Net in relation to a Mini Portfolio, the aggregate of the Net Proceeds generated by the
Proceeds" Relevant Investments constituting such Mini Portfolio;
“Associated Person” in relation to a Group Entity, any other Group Entity and any senior employee,
director or officer of such Group Entity;
Page | 5
“AUM” assets under management;
“Authority” or “CMA” the Capital Markets Authority established under the Act;
“Authorized Units” all Units that may be issued at any given time by Acorn D-REIT, whether they have
been issued (and are therefore ‘Units in Issue’) or not;
“Beneficiary” any holder of Units from time to time;
“Board” means the board of directors of the D-REIT Manager as constituted from time to
time;
“Business Day” a working day in Kenya when banks and Recognized Securities/Stock Exchange
markets are open for general business and excludes Saturday, Sunday or official
public holiday;
“CAGR” Compounded annual growth rate;
“Calculation Date” 31 December in each year (or in respect of the Performance Period in which this
Agreement is terminated, the effective date of such termination);
“Closed ended fund” a fund or trust in which:
a) a person invests by subscribing for an issue of units or by acquiring units in a
secondary market;
b) the value of the investment fluctuates over time as determined by market
price for the units;
c) the number of the units issued remains constant over time except where a
new issue of units is made or there is a reduction in the capital of the fund
initiated by the Trustee or as a consequence of termination or winding up of
the trust; and
d) the Securities Holder, except where there is a reduction in the capital of the
fund initiated by the Trustee or as a consequence of termination or winding
up of the trust –
(i) is not entitled to require the Trustee to redeem the units; and
(ii) may only exit the investment in the units by selling the units in a
secondary market;
“Closing Date” the date on which the Offer closes;
“Connected person” or in relation to any person, an Associated Person of that person or an associate of
“connected party” that person (as associate is defined in the Act, as amended from time to time)
and, in relation to the Acorn D-REIT specifically, includes:
a) the D-REIT Manager;
b) a valuer appointed to undertake a valuation of the Scheme;
c) the Trustee;
d) a Substantial Unit Holder in the Scheme;
e) a director, a senior executive or an officer of any person referred to in (a), (b)
and (c) above;
f) an associate (as “Associate” is defined in the Act, as amended from time to
time) of any person referred to in (d) and (e) above;
g) the Acorn I-REIT; and
h) a controlling entity, a holding company, a subsidiary or an associated company
of any person referred above;
“Connected Party a transaction entered into or proposed to be entered into between the Trustee or
Transaction” the D-REIT Manager on behalf of the Acorn D-REIT and a Connected Party. Where
a transaction or proposed transaction involves the Acorn I-REIT or any other
Scheme managed by the D-REIT Manager, then any such transaction shall be
deemed to be a Connected Party Transaction;
“Continuation has the meaning set forth in the Trust Deed;
Resolution”
Page | 6
“Director” a director of the D-REIT Manager;
“Distribution” distributions of income or Realized Capital Gains of the Acorn D-REIT;
“D-REIT Manager” the D-REIT Manager (being, as at the date hereof, the Acorn D-REIT Manager) and
any replacement from time to time appointed pursuant to the Trust Deed in
accordance with the provisions of the Regulations and whose role is the
management of the Acorn D-REIT pursuant to the Trust Deed and the Regulations
“D-REIT Property the D-REIT Property Manager (being, as at the date hereof, the Acorn D-REIT
Manager” Property Manager) and any replacement from time to time appointed pursuant
to the Trust Deed and in accordance with the provisions of the Regulations and
whose role is the provision of certain property management services in relation
to the Eligible Real Estate of the Acorn D-REIT pursuant to the Trust Deed and the
Regulations;
“ D-REIT Management the agreement entered into between the Trustee and the D-REIT Manager (from
Agreement’’ time to time) with respect to the management of the Acorn D-REIT dated 16th
December 2020;
“D-REIT Property an agreement entered into between the Trustee, the D-REIT Manager and the D-
Management REIT Property Manager (from time to time) with respect to the provision of certain
Agreement” property management services in relation to Eligible Real Estate of the Acorn D-
REIT.
“D-REIT Scheme” a development real estate investment trust scheme authorized as such by the
Authority under the Regulations;
“EFT” Electronic funds transfer;
“Eligible Assets” the eligible real estate and/or eligible cash investments that the Acorn D-REIT is
permitted to invest in under the Regulations (see Section 4.1.4);
“Eligible Investments” in respect of the Acorn D-REIT the assets and investments specified under
Regulation 76 of the Regulations;
“Eligible Real Estate” has the meaning attributed to it under the Regulations in respect of a D-REIT;
“First Continuation has the meaning set forth in the Trust Deed;
Resolution”
“Fund” all contributions of money or money's worth or other income or assets of the
Acorn D-REIT (including money borrowed or raised by the Trustee for the purpose
of the Scheme) and includes all amounts due and any rights of the D-REIT Manager
or the Trustee to institute an action against any person, and the rights of the
Beneficiaries together to institute an action against any party (including the
Trustee);
“Group” in relation to an entity, any controlling entity, holding company, subsidiary,
associated company and/or affiliate of that entity and any such entity individually
shall be a “Group Entity”;
“Helios” Helios Investment Partners Limited;
“Hurdle” an IRR of 17.5%;
“HSES” health, safety, environment and social;
“HSES Action Plan” has the meaning given to it in the D-REIT Management Agreement;
“HSES Requirements” applicable HSES Law, HSES Permits, the Core Labour Standards, the Basic Terms
and Conditions of Employment, the IFC Performance Standards, the IFC EDGE,
the PIDG HSES Standards and Policies and the HSES Contractor Terms and
Conditions;
Page | 7
“IFC EDGE” the International Finance Corporation’s “Excellence in Design for Greater
Efficiencies” certification, which is accessible via the following link:
https://edge.gbci.org/;
“IFC Performance the International Finance Corporation's performance standards on social and
Standards” environmental sustainability (including the technical reference documents
known as World Bank Group Environmental, Health and Safety (“EHS”)
Guidelines) which are accessible on the IFC website as follows:
(a) IFC Performance Standards: http://www.ifc.org/PerformanceStandards;
and
(b) World Bank Group EHS Guidelines: http://www.ifc.org/EHSGuidelines;
“IFRS” International Financial Reporting Standards;
“Independent Security the Security Holders excluding any Units held by, or on behalf of: (a) the Acorn
Holders” Group or an associate (as Associate is defined in the Act, as amended from time
to time) of the Acorn Group; or (b) the Trustee Group or an associate (as Associate
is defined in the Act, as amended from time to time) of the Trustee Group (as the
context so requires);
“Initial Assets” the first assets vested by the Promoter in the Trustee under this Trust Deed to be
held in trust for the Security Holders of the Acorn D-REIT and as more particularly
described in Clause 9.2 and the Offering Memorandum relating to the Initial Offer;
“Initial Estimated all expenses including costs, fees and charges associated with the establishment
Expenses” of the REIT Scheme and the Offer;
“Initial Offer” the first offer or issue of Units at the Issue Price made to persons other than the
Promoter or Connected Parties of the Promoter or Acorn D-REIT Manager
pursuant to this Offering Memorandum;
“Investee LLPs” a limited liability partnership which meets the requirements of Regulation 76 as
adopted to limited liability partnerships;
“Investment Policy” the Investment Policy of the Acorn D-REIT set out in the Trust Deed;
“Investor” a Professional Investor under the Regulations and a holder of Units and who is a
Beneficiary under the Trust Deed;
“Internal Rate of internal rate of return;
Return” or “IRR”
“Acorn I-REIT” Acorn Student Accommodation I-REIT;
“KES” Kenya Shillings, the lawful currency of Kenya;
“KYC” Know your customer;
"Launch Date" the date of formal launch of the Acorn D-REIT;

“Legal Advisors” TripleOKLaw Advocates LLP;
“Liquidity Event” a liquidity event for the Security Holders, allowing such Security Holders the
option to realise the value of their investment in the Acorn D-REIT, which may
include, but is not limited to, a restructuring of the Acorn D-REIT, listing of the
Units, or a sale of the assets of the Acorn D-REIT, or a winding-up of the Acorn D-
REIT;
“Management Fee” amount payable by the Trustee to the D-REIT Manager for managing the Acorn D-
REIT in accordance with the terms of the D-REIT Management Agreement;
“MER” Management expense ratio;
"Mini Portfolio" on any Performance Fee Calculation Date, all Relevant Investments Fully Exited
since the last Performance Fee Calculation Date; PROVIDED THAT, a Mini Portfolio
Page | 8
shall consist of no fewer than three (3) Relevant Investments (unless agreed
between the Trustee and the Acorn D-REIT Manager);
“Net Asset Value” or the value of all assets of the Fund less the value of all liabilities of the Fund,
“NAV” including Trustee fees, any Management Fees and any Performance Fee, as at the
day the calculation is made;
“Net Asset Value per The NAV divided by the number of Units of Units issued and not redeemed on the
Unit” or “NAV per day the calculation is made;
Unit”
“Net Operating Total revenue less operating expenses and non-cash rents. Operating expenses
Income” or “NOI” include real estate taxes, utilities, insurance, property management fees,
advertising, and basic repairs and maintenance;
"Net Proceeds" the aggregate proceeds at any time received by the Acorn D-REIT from a Relevant
Investment:
(i) by way of dividends or other distributions of any nature paid to the Acorn D-
REIT by any project vehicle which holds such Relevant Investment; and/or
(ii) on the disposal (or part disposal) of the Acorn D-REIT's interest in any Relevant
Investment;
in any case net of applicable disposal Expenses (if relevant);
Net Proceeds less Relevant Investment Amount (or, in the case of a partial
"Net Profits"
disposal of a Relevant Investment, such proportion of Total Costs as can properly
be attributed to the proportion of the Relevant Investment disposed of);
“Offer” the offer of up to 210,791,300 Units of KES 20 each at par in the Acorn D-REIT;
“Offering this document;

Memorandum”
"Offer Price per Unit" the price at which the Units will be issued by the Acorn D-REIT pursuant to the
Offer, being KES 20 per Unit;
“OTC” the over the counter trading unquoted script platform for hosting, quoting,
transferring, settlement, reporting and registry management of the Units
pursuant to the Trust Deed;
“p.a.” per annum;
“PBSA” purpose-built student accommodation;
“Performance Fee” the performance fee calculated in accordance with Section 6.1.2;
"Performance Period" (i) the period from the Launch Date to the first Calculation Date, and (ii) thereafter
the 12-month period ending on the Calculation Date in each year;
“Person” or “person” an individual, corporation, company, firm, organisation, partnership, limited
partnership, limited liability partnership, trust (including business trust),
unincorporated association, joint venture syndicate, estate, Governmental Entity
or other form of entity or organization of any nature whatsoever (in each case
whether or not having separate legal personality);
“PIDG HSES Standards the Private Infrastructure Development Group’s HSES standards and policies as
and Policies” applicable that set out the minimum HSES standards for the D-REIT, as amended
from time to time;
“PIDG Investment the investment policy of the Private Infrastructure Development Group, as
Policy” amended from time to time;
“PIDG OPPs” the operating policies and procedures of the Private Infrastructure Development
Group, as amended from time to time, which as at the date hereof can be found
at: https://www.pidg.org/resources/?filter_cat=operating-policies-and-
Page | 9
procedures (or any successor webpage) and including the IFC Performance
Standards;
“Professional in relation to the Acorn D-REIT includes:
Investor(s)” or a) any person licensed under the Act;
“Qualified Institutional b) an authorised scheme or collective investment scheme;
Investor(s)” c) a bank or subsidiary of a bank, insurance company, co- operative, statutory
fund, pension or retirement fund; or
d) a person including a company, partnership, association or a trustee on behalf
of a trust which, either alone, or with any associates on a joint account
subscribes for Units with an issue price equal to at least five million shillings;
“Project Manager Aegis Development Solutions Ltd;
Certifier”
“Realized Capital capital gains actually realized by the Acorn D-REIT following the disposal of a REIT
Gains” Asset;
“Recoverable means all expenses recovered from or charged to the Acorn D-REIT as a result of
Expenses” the expenses incurred by the operation of the Acorn D-REIT expressed as a fixed
amount as set out in Regulation 95(2);
“Register” the register of the Unit Holders, as maintained by or on behalf of the Trustee
pursuant to the Trust Deed and the Regulations;
“Regulations” the Capital Markets (Real Estate Investment Trusts) (Collective Investment
Schemes) Regulations, 2013 as amended from time to time;
“REIT” real estate investment trust and “the REIT” means this Acorn D-REIT established
by the Trust Deed;
“REIT Assets” all assets of the Fund, including the Initial Assets (for so long as such Initial Assets
are owned by the D-REIT);
“Relevant Investment” a project falling within the scope of the investment policy of the Acorn D-REIT;
“Relevant Investment in relation to any Relevant Investment an amount equal to (i) the Total Cost of
Amount” such Relevant Investment plus (ii) the Hurdle’
“Restricted Offer” an issue or an offer made to Professional Investors;
“RTGS” Real time gross settlement;

“Scheme” real estate investment trust scheme as defined in the Regulations;
“Scheme Documents” Means together:
a) this Offering Memorandum, including any conversion or supplementary

Offering Memorandum;
b) the Trust Deed and any amending, supplemental or replacement Trust Deed;
c) the D-REIT Management Agreement or any other agreement setting out the
terms of appointment, the role or obligations of the D-REIT Manager;
d) any document appointing a property manager, development manager,
project manager certifier or structural engineer or setting out the terms of
appointment, the role or obligations of such persons;
e) any document described in (b), (c) or (d) above which relates to an investee
trust; and
f) the Memorandum and Articles of Association of any investee company,
partnership deed of any Investee LLP and any shareholders’ agreement
Page | 10
including any amending, supplemental or replacement Memorandum and

Articles of Association or shareholders’ agreement;
“Security” any instrument defined as such under the Act and, in relation to the Acorn D-REIT,
includes Units established;
“Special Resolution” a resolution passed by not less than three quarters of the Security Holders present
and entitled to vote in person (or where proxies are permitted by proxy) at a
general meeting of Security Holders, provided that at least twenty-one days'
written notice specifying the intention to propose the Special Resolution has been
given;
“Stabilization Period” the marketing and letting period of a PBSA development following practical
completion thereof until such development has achieved the Stabilization
Threshold;
“Stabilization in relation to a development, an average occupancy level of at least seventy-five
Threshold” per cent. (75%) in any three (3) month period;
“Substantial Unit a person who holds fifteen per centum (15%) or more of the issued Units, where
Holder” for the purposes of calculating the fifteen per centum, in addition to any Units
held by the Security Holder, that person is also considered to be the holder of any
Units held by:
a. an associate (as Associate is defined in the Act, as amended from time to
time) of a holder who is an individual; or
b. an Associated Person, if the holder is an entity other than a natural
person;
“SKP” Simon-Kucher & Partners;
“Structural Engineer” FBW Kenya;
“Total Asset Value” or the value of all REIT Assets based on the most recent valuation;
“TAV”
“Tax Advisors” Viva Africa Consulting LLP;
“Transaction Adviser” Renaissance Capital;
“Transaction Net the gross proceeds raised during the Offer, net of the Initial Estimated Expenses;
Proceeds” or
“Estimated
Transaction Net
Proceeds”
“Trust Deed” or the Trust Deed entered into by the Promoter, the Acorn D-REIT Manager and the
“Deed” Trustee dated 16th December 2020 that sets out the terms of the trusts governing
the Acorn D-REIT and includes every instrument that varies those trusts, or affects
the powers, duties, or functions of the Trustee or manager;
“Trustee” The Co-operative Bank of Kenya Limited;
“Units” a Security in the Acorn D-REIT, being an undivided share, right, interest or
entitlement in the REIT Assets as a whole, and may not be construed so as to
confer an interest in a particular REIT Asset
“Units in issue” all Units which have been created and issued and which have been entered in the
Register (including those held or deemed to be held by the D-REIT Manager), and
which have not been cancelled;
"Security Holder" any person who has purchased or otherwise acquired (including through the
exchange, or in consideration of any transfer of, Eligible Real Estate and holds any
Units and is registered in the Register as evidence that he holds the Units;
Page | 11
“Valuation report” report made by a valuer in respect of the Acorn D-REIT;
“Valuer” Tysons Limited;
Page | 12
PART 3: KEY FEATURES OF THE OFFER

3.1. The Offer and Use of Proceeds
Acorn Holdings Limited is the Promoter of the Units made available for subscription by the Acorn D-REIT at an
Offer Price per Unit of KES 20.
The Acorn D-REIT is structured as a common law unincorporated trust divided into Units and is established
through a Trust Deed dated 16th December 2020. The Trustee is independent of the REIT Manager, and all
assets in the Trust are held in the name of and are under the control of the Trustee on behalf of the Security
Holders.
The Acorn D-REIT is offering for sale pursuant to the Offer up to a maximum of 210,791,300 Units with an
aggregate value, at the Offer Price per Unit, of KES 4.2 billion. The Net Proceeds will be used primarily to acquire
the Initial Properties, being a portfolio of PBSA assets currently under project top out and construction start,
from the Promoter as per the pipeline outlined in Section 5.2.1.
3.2. Offer Timetable
Opening date of the Offer Wednesday 9th December, 2020

Closing date of the Offer Friday 15th January, 2021
Allotment Friday 15th January, 2021
Announcement of the results of the Offer Monday 18th January, 2021
Offer Statistics
Offer Price per Unit KES 20
Overall Offer Minimum Subscription 21,079,130
Total Number of Units available under the Offer 210,791,300
Estimated gross proceeds of the Offer KES 4,215,826,000
Initial Estimated Expenses of the Offer KES 112,167,000
Estimated Net Proceeds KES 4,103,659,000
N.B: The above dates and times are subject to amendments and notification will be made where appropriate.
3.3. Key Investment Highlights
3.3.1. Favorable market fundamentals in the PBSA sector in Kenya driven by structural tailwinds;
Kenya currently faces a chronic shortage of purpose-built student accommodation. There has been an increase
in annual student enrolment from circa 27,000 in 1990 to 564,000 in 2017, a CAGR 2 of 13%. Kenyan cities in
general, but Nairobi specifically, are facing a student housing deficit with no commensurate investment in
accommodation.
Universities, both private and public have been unable to provide adequate accommodation, creating the
opportunity for private developers to fill the gap. Acorn is the first PBSA provider operating in Kenya and has
rolled out four PBSA properties with over 2,300 beds as of March 2020. Demand for the Group’s product has
outstripped management’s expectations, with its first two properties on Jogoo Road and Ruaraka, achieving
over 90% occupancy levels in 15 months and less than 12 months respectively. The third property in Parklands
2 Compound annual growth rate

Page | 13
opened in March 2019, while Qwetu Wilson View was launched in February 2020. All four properties had, as
at March 2020, achieved and maintained their target Net Operating Income.
While the properties were closed in March 2020 due to the impact of the Covid-19 pandemic, they reopened
within 3 months and occupancy has been gradually coming back. Furthermore, many students have retained
their rooms on a discounted rate until January 2021. Universities are expected to reopen in January 2021, and
we expect that within 3-4 months, we will be back to full occupancy whilst other asset classes will take a much
longer time to recover.
3.3.2. Investment decisions made on thematic fundamentals;

The Acorn D-REIT has a clear investment policy that determines the investment criteria of assets purchased by
the Acorn D-REIT. This policy is based on thematic fundamentals of the PBSA real estate sector and Kenya’s
positive macro-economic and demographic tailwinds, such as urbanization as a driver of housing growth, a
growing middle class, affordability of urban housing, Kenya’s large youth bulge with the average population
age standing at 18 years, and the large gap between tertiary education student enrolment and the availability
of purpose built student accommodation beds, that has contributed to a large housing gap in the student
accommodation sector.
3.3.3. Active and healthy pipeline of high-quality assets;

In parallel with the launch of the Acorn D-REIT, Acorn is also establishing the Acorn I-REIT to act as the
predominant vehicle for exiting PBSA development projects that are operational and stabilized. This Acorn D-
REIT pipeline consists of high quality PBSA projects to be developed over the next 10 years. These pipeline
projects are well-located, such as, in the vicinity of major universities and other education institutions, where
market research indicates an inherent gap in the supply of student accommodation, targeting both the middle-
and lower-income market.
3.3.4. Experienced management team with a long track record of successfully completing real estate projects
in Kenya, including Acorn’s first four PBSA properties;
In line with its ambition to be the leading PBSA provider in the region, Acorn has a strong, competent and
experienced management team to deliver on its strategy. The management team has over 80 years of
combined experience in the real estate industry in Kenya.
Over the years, Acorn has become one of the largest and most successful project managers and developers in
Kenya. Acorn has delivered over 50 real estate development projects, with an aggregate value in excess of
US$550 million, demonstrating a strong track record to the implementation and delivery of high profile real
estate development projects. These projects include some of the most iconic projects in the region such as the
Coca-Cola Regional Head Office, Deloitte Regional Head Office, Equity Centre, UAP Towers, Nakawa Business
Park, Tiara Office Park and Acorn House.
Since its change in strategy to focus on PBSA, Acorn has consistently developed and stabilised its development
projects well within the expected timelines and has maintained high standards that have ensured a continued
increase in the demand for its products.
3.3.5. Stable, non-cyclical investment returns

The Acorn D-REIT is the first of a kind product providing investors with the opportunity to obtain unique
exposure to the high growth PSBA sector in Kenya.
Acorn's extensive experience in project management and development in the region has enabled it to develop
and improve its internal processes with the result that it is able to consistently generate cost and time savings
in its development projects. Acorn has a proven operating model not only in the real estate sector but also in
the PBSA sector in Kenya and has successfully completed four student housing projects in Nairobi currently
operating at near-full occupancy.
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3.3.6. High investment returns – projected at an IRR of greater than the target of 25%, net of fees and
expenses
The Transaction provides investors with the opportunity to gain exposure to a unique asset class – real estate;
with the initial focus being the first PBSA of any scale in Kenya.
The Group’s extensive experience in development management has enabled it to develop and improve its
internal processes that consistently generate cost and time savings in its projects. Acorn has a proven operating
model not only in the real estate sector but also in the PBSA sector and has successfully completed 4 student
housing projects in Nairobi which are currently operating at full capacity. The operational capability that
underpins this performance has been honed over time and will allow increasing efficiency as the business
continues to scale up.
Source: Mentoria Report, Zamara Annual Report & Acorn model
In order to allow potential investors to gain a blended exposure to the development gains proposed to be
generated on the Acorn D-REIT's pipeline of projects, and the long-term income profile of the completed and
stabilized PBSA assets (together with the potential for future capital appreciation), potential investors are being
offered, pursuant to the Offer, a mixture of units in both the Acorn D-REIT and the Acorn I-REIT. It is therefore
currently intended that investor subscriptions will be allocated as to 30% in Units in the Acorn D-REIT and as
to 70% in units in the Acorn I-REIT.
The blended investment allocation between the two Acorn-sponsored REITs offer investors a risk-adjusted
return, which surpasses the expected returns from other asset classes in Kenya. The chart above illustrates a
simulation3, which traces the actual returns from major asset classes and rental housing in Kenya and the
forecast returns from the Acorn-sponsored REITs (with the proposed investment allocation) over a 10-year
period. This shows that the blended portfolio of Acorn REITs would have markedly outperformed the other
asset classes while offering a more stable return profile, less prone to cyclicality.
Based on Acorn’s experience in developing the first four operating properties, Acorn is confident that a target
IRR of 25% (net of fees) is achievable.
3.3.7. Strong investor alignment – Acorn is aligned with Acorn D-REIT investors through both a significant
long-term holding in the Acorn D-REIT and a fee structure that is more performance-driven with a
lower management fee base. A significant portion of Acorn’s fees will therefore only accrue at the
time of realized exits from investments
In the structuring of its fees, as described in Section 6.1.2, Acorn has ensured that its interests are aligned with
investors by keeping a significant portion of its fees being paid only when investments are exited and gains are
realized, which meet the Hurdle rate of return.
3The chart illustrates a simulation of returns across asset classes in Kenya over a 10-year period based on historical performance (2011-
18) (Source: Mentoria Report, Zamara Annual Report) and extrapolation. The returns for the Acorn-sponsored REITs blended portfolio
are based on the expected forecast performance. This chart is shown for illustration purposes to compare the relative risk-return
profile of different asset classes available to investors.
Page | 15
Acorn will also hold such number of Units as corresponds to an initial investment in the Acorn D-REIT of at least
thirty per cent. (30%) of the Net Asset Value as at the date of the initial Offer (assuming that all Initial Assets
have been contributed to the Acorn D-REIT as at such date). This 30% holding will be maintained until either
the earlier of the date on which a Liquidity Event occurs or the date on which the Anchor Investor ceases to
hold Units, whichever occurs first. The Promoter will thereafter be at liberty to dispose of all of its Units.
3.3.8. Clear legal separation between the Acorn D-REIT, the Promoter and the Acorn D-REIT Manager
The Acorn D-REIT will be a separate legal entity from the Promoter and the Acorn D-REIT Manager, and the
Promoter will also hold Units in the Acorn D-REIT pari passu with other Security Holders. As such, should there
ever be a material issue in the operations and/or running of the Promoter, the Acorn D-REIT and the Security
Holders are protected from the effects of any such issues.
3.3.9. Strong corporate governance and shareholder support

The roles and responsibilities of the board of directors and those of management are clearly set out within the
corporate governance framework. The board of directors takes the overall responsibility of Acorn. It exercises
leadership and sound judgement in directing Acorn to achieve sustainable growth and acts in the best interests
of its stakeholders.
AIML, the D-REIT Manager and a subsidiary of Acorn Holdings Limited, also has a strong and capable board,
which includes both independent and investor directors, who ensure that it remains aligned with the interests
of the Security Holders. The Board will also have four committees; two segregated independent Investment
Committees – one representing the interests of the Acorn I-REIT and another representing the interests of the
Acorn D-REIT, who will consider investment opportunities recommended to it by the REIT Manager; an Audit
and Risk Committee; and a Corporate Governance Committee, who will be responsible for reviewing related
party transaction processes and shall consist of independent directors only.
Both shareholders of Acorn, being Helios and the Acorn senior management team, provide stability to the
company and have been invested in the business since 2015. Helios has a proven track record in their
investments across Africa and has strong relationships with institutional investors.
3.3.10. Social impact
As at December 2019, the student occupants of Acorn's existing PBSA properties came from 53 countries, and
represented an equal 50-50 gender balance split among the students. Acorn has created about 342 jobs and
has achieved a 25% reduction in the capital cost per bed.
3.3.11. Green status

All Acorn property assets are in the process of being certified IFC EDGE (“Excellence in Design for Greater
Efficiencies”) buildings, having been constructed in accordance with requirements of the IFC EDGE program
and certified by Green Business Certification Inc. (GBCI). IFC EDGE certification also forms the basis of the
policies reviewed under the Climate Bonds Initiative, which is the base criteria for notes issued under the Green
Bond Program. The recently concluded Acorn medium term note is a Green Bond certified note.
An innovation of IFC, EDGE is an online platform, a green building standard and a certification system for over
140 countries. The EDGE application helps to determine the most cost-effective options for designing green
structures within a local climate context. EDGE can be used for buildings of all vintages, including new
construction, existing buildings and major retrofits. EDGE is part of a holistic strategy to steer construction in
rapidly urbanizing economies onto a more low-carbon path.
Certification is based on the benefit generated from providing solutions in three categories of construction and
operation: Energy, Water, and Materials. The targets required for certification are 20% savings in energy usage,
20% in water consumption, and 20% in materials utilized and all Acorn projects are designed to achieve higher
savings than the benchmarks noted above.
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3.4. Application Procedure

a) Copies of this Offering Memorandum, with the accompanying Application Form as appears in PART 19 may
be obtained from the offices of the Trustee, Acorn or the Placing Agent referred to in section 1.3 at any
time during business hours;
b) Persons wishing to apply for Units must complete the appropriate Application Form. The Application Form
must be completed in accordance with the provisions contained in this Offering Memorandum and the
instructions set out on the Application Form and returned to a Placing Agent as listed in section 1.3 of this
Offering Memorandum. In the event of a rejection, for any of the reasons set out in the “Rejections Policy”
below, any such Application Forms shall be returned to the relevant Applicant. The return or refund of any
payment received in respect of any rejected Application will be effected by way of Electronic Funds
Transfer (EFT) provided that EFT details have been provided and are accurate;
c) Save in the case of negligence or wilful default on the part of the Acorn D-REIT, its Advisors or of the Placing
Agent, neither the Promoter, nor any of the Advisors nor the Placing Agent shall be under any liability
whatsoever should an Application Form not be received by the Closing Date as indicated in section 3.2 of
this Offering Memorandum.
d) Joint applications may only be made by a person including a company, partnership, association or a trustee
on behalf of a trust which, either alone, or with any associates on a joint account subscribes for Units
with an issue price equal to at least Kenya Shillings six million (KES 6 million); and in all cases Joint
Applicants submitting an application must fall within the same Allocation category. Joint applications must
not be used to defeat the Allocation Policy. For purposes of the minimum initial allocation under the
Allocation Policy, the Promoter reserves the right to consider each Joint Application as an Application by
each Joint Applicant alone, namely two separate applications, jointly for the number of Units applied for;
e) Receipt of funds transferred shall not amount to the acceptance of any Application;
f) All alterations to the Application Form, other than the deletion of alternatives, must be authenticated by
the full signature of the Applicant;
g) Applications sent by facsimile or by any means other than the methods stipulated in this Offering
Memorandum will not be accepted;
h) Applications once given are irrevocable and may not be withdrawn once submitted;
i) By signing an Application Form, each Applicant:
i. agrees that having had the opportunity to read this Offering Memorandum, it/he shall be deemed
to have had notice of all information and representations concerning the Acorn D-REIT contained
herein;
ii. confirms that in making such Application it is not relying on any information or representation in
relation to the Acorn D-REIT other than those contained in this Offering Memorandum and
accordingly agrees that no person responsible solely or jointly for this Offering Memorandum or any
part thereof shall have any liability for any other information or representation;
iii. accepts to receive any communication from the Trustee, including notices for meetings, through
electronic means including but not limited to email or placement of such notices on the Acorn D-
REIT’s website, as well as notification through the mass media;
iv. represents and warrants that, except in cases where the Applicant is licensed to apply for and hold
Units for other persons, the Applicant applies for the Units on his/its own account, will be the
beneficial owner of the Units, has not represented himself/itself as a different person in any other
application nor applied for Units under a different name, and is not applying for the Units on the
instructions of or on behalf of any other person and has not instructed any other person to apply for
Units as his nominee;
Page | 17
v. acknowledges that the Promoter and/or the Lead Transaction Advisors reserve the right to reject
any Application found to be in contravention of subparagraph (iv) above.
j) Applicants will receive Unit certificates as proof of ownership to the address as stated on the Application
Form.
By signing an Application Form, an Applicant agrees to the allotment and issue of such number of Units (not
exceeding the number applied for) as shall be allotted and issued to the Applicant upon the terms and
conditions of the Offer as set out in this Offering Memorandum and subject to the Acorn D-REIT Trust Deed,
and agrees that the Trustee may enter the Applicant’s name in the Register of Security Holders as the holder
of such Units.
3.5. Application Money

a) A prospective investor wishing to apply for the Units pursuant to the Offer must duly complete and sign
the accompanying Application Form and return the same in its entirety so that it is received by the Placing
Agent by the Closing Date, together with either bankers cheques, RTGS slip or deposit slip.
b) Payment for the Units allotted will be made as per (c) below, following which the Promoter will notifying
the Applicant of its proposed allocation of Units. If such payment is not made, then the Promoter shall
reserve the right to call in the Bank Guarantee. Units shall only be issued to Applicants after payment in
full for the Units (in cleared funds net of any bank transfer charges) has been received by the Acorn D-REIT
c) Payment for Units must be effected by RTGS to the bank details provided that the Applicant completes the
relevant section of the Application Form, EFT and RTGS payments should be made to
Account Name: ACORN D-REIT CAPITAL RAISING ACCOUNT
Bank: The Co-operative Bank of Kenya Ltd
Bank Code: 11000
Branch: Upper Hill Branch
Account No: 01122164073200
SWIFT Code: KCOOKENA
Reference: Application Form Name
d) The Placing Agent and the Trustee are entitled to ask for sufficient identification to verify that the person(s)
making the Application has authority or capacity to duly complete and sign the Application Form. The
Placing Agent is therefore expected to undertake all “Know your Client” and AML procedures and activities
on nominee accounts as required by law. The Lead Transaction Advisor and the Trustee have the right to
demand and be provided with the details of the nominee accounts to ascertain the eligibility of any
Application by nominees. In default, the Trustee may at its sole discretion treat such applications as invalid;
e) Every Applicant is required to tick the appropriate box on the Application Form as regards his/her residency
and or citizenship/other status, where applicable.
f) No interest will be paid on monies received in respect of applications for Units, nor will interest be paid on
any amounts refunded or deposited at the time of Application;
g) All transactions relating to the Offer shall be transacted in Kenya Shillings.
3.6. Rejection Policy

a) Delivery of an Application Form accompanied with evidence of RTGS remittance or deposit slip to the
Placing Agent will constitute a warranty that the payment will be honoured on first demand;
b) The Promoter and the Trustee shall not be under any liability whatsoever should any Application Form fail
to be received by the Placing Agent by the Closing Date. In this regard, such Application Forms and
accompanying payments shall be returned to the Applicant;
c) Applications shall be rejected if full value is not received; and
Page | 18
d) Applications may also be rejected for the following reasons:

i. Missing or illegible name of primary or joint applicant in any Application Form;
ii. Missing or illegible identification number, including corporation registration number, or in the case of
Kenyan residents (other than citizens), missing or illegible alien registration number;
iii. Missing or illegible address (either postal or street address);
iv. Missing residence and citizenship indicators for primary Applicant in the case of an individual or
missing residency for tax purposes for corporate investors;
v. Insufficient documentation forwarded, including missing tax exemption certificate copies for
Applicants that claim to be tax exempt;
vi. In the case of nominee applications, incomplete information, failure to satisfy the Promoter and the
Trustee of nominee status or lack of declaration from the agent submitting the Application;
vii. Missing or inappropriately signed Application Form including:
a. Primary signature missing from Signature Box 1;
b. Joint signature missing from Signature Box 2 (if applicable);
c. Two directors or a director and the respective company secretary having not signed or seal
having not been affixed in the case of a corporate application;
viii. Amount as payment for number of Units applied for is less than the correct calculated amount;
ix. Bankers’ cheque has unauthenticated alterations; or
e) Such other reasons as the Promoter may provide to the Applicant upon rejection of an application.
3.7. Refund Policy

Applicant/s monies will be refunded through EFT and will apply as follows:
a) Refunds will only apply where funds for the Application are not pledged through guarantees on behalf of
the Applicant;
b) No interest will be paid on any application monies received in respect of applications for Units, nor will
interest be paid on amounts refunded to the Applicant. Refunds in respect of unsuccessful Applications (if
any) shall be made by the Acorn D-REIT in the form of EFT or RTGS;
c) EFTs will only be credited to accounts held at commercial banks. In the case of Applicants whose Units are
pledged, refund money/monies in the name of the Applicant will be delivered to the financier indicated on
the Application Form.
Refunds to Foreign Investors and East African investors outside Kenya will be effected through EFT or RTGS in
Kenya Shillings (net of transaction charges) to the Applicant’s bank account provided on the Application Form.
Any exchange rate differences will be for the account of the Applicant.
3.8. Allocation Policy

i. In order to ensure the success and further alignment of the return expectations of investors, the Units in
the Acorn D-REIT are being offered as a blended offer with units in the Acorn I-REIT. As such, investors are
expected to hold units in both REITs at a firm ratio of 30:70 respectively for the Initial Offer i.e. 30% of
their allocation will be in the Acorn D-REIT and 70% in the Acorn I-REIT.
ii. The Acorn D-REIT will allocate the Units on a first-come, first-served basis but reserves the right to achieve
a balanced distribution of the Units among the accepted Applicants on the closing of the Offer.
iii. The allocation policy will comply with Regulation 27.
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iv. The Acorn D-REIT will announce the manner in which the Units have been allocated to Applicants on the
date set out in section 3.2 of the Offering Memorandum titled “Offer Timetable” for announcement of
allocation results. The announcement will be published in at least two newspapers with national circulation
in Kenya.
3.9. Foreign Investors

Any purchase of Units by investors who are not residents of Kenya (“Foreign Investors”) may be affected by
laws and regulatory requirements of the relevant jurisdictions in which such Foreign Investors are located. Any
Foreign Investors wishing to apply for the Units must satisfy themselves as to the full observance of the laws
of the relevant territory and governmental and other consents to ensure that all requisite formalities are
adhered to, and must pay any issue, transfer or other taxes due in such territory.
Foreign Investors are advised to consult their own professional advisors as to whether they require any
governmental or other consents or need to observe any applicable legal, tax or regulatory requirements to
enable them to apply for and purchase the Units.
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PART 4: PARTICULARS OF THE ACORN D-REIT

4.1. Details and Description of the Acorn D-REIT Structure
4.1.1. Overview of the Acorn D-REIT

The Acorn D-REIT is structured as a Closed Ended Fund that will initially be an unlisted evergreen development
trust and, prior to the Offer, the Promoter shall set up an OTC to allow for limited trading of the Units. There
is no assurance, however, that an active market in the Units will develop or that Security Holders will be able
to trade their Units at an acceptable price. The Units are being offered to Professional Investors through a
restricted public offer.
The Units are only transferable to Professional Investors, and the Trustee shall not impose any other restriction
on the transfer of Units save as provided in Regulation 27. The Units shall rank pari passu in all respects and
each Unit shall confer the right to one vote at all meetings of Security Holders and to participate pro rata in
any distributions by the Trust.
At the fifth annual general meeting of the Acorn D-REIT, the Trustee shall propose a resolution of the Security
Holders that the Acorn D-REIT continue as presently constituted (the "First Continuation Resolution"). The
continuation vote shall be proposed as an Ordinary Resolution of the Independent Security Holders. If the First
Continuation Resolution is passed, a similar resolution shall be proposed by the Trustee every five years
thereafter (and, together with the First Continuation Resolution, each a "Continuation Resolution").
If any Continuation Resolution is not passed, the Trustee shall procure that the D-REIT Manager shall consult
with the Security Holders and shall present proposals to achieve a Liquidity Event to Security Holders within
four months of the date of the relevant meeting at which relevant Continuation Resolution was proposed (the
"Proposals").
The Proposals shall be subject to the approval of the Independent Security Holders by way of Special Resolution
at a meeting of the Security Holders duly convened for a date no later than the date falling six months after
the date of the relevant meeting at which the relevant Continuation Resolution was proposed. The Trustee and
the D-REIT Manager shall procure that the Proposals are implemented as soon as practicable following their
approval in accordance with this Clause 4.1.1.
If none of the Proposals are approved in accordance with the procedure outlined above, then the Trustee and
D-REIT Manager shall procure the winding-up of the Acorn D-REIT in accordance with the Trust Deed.
The Trustee will be responsible for the governance of the Acorn D-REIT, including the supervision of the D-
REIT Manager and providing approval of the D-REIT Manager’s investment recommendations. The Trustee
must always act in the best interests of the Security Holders. The D-REIT Manager is responsible for the
management of the Acorn D-REIT’s investments including the appointment of necessary advisers in
consultation with the Trustee. The Acorn D-REIT’s investments must be as per the Investment Policy, but
ultimately the D-REIT Manager is required to find suitable eligible real estate properties for investment of
the funds raised as part of the Offer. In addition, investment of surplus cash in deposits, bonds, securities
and money market instruments shall be spread across a number of issuers, securities and instruments so
that not more than five percent (5%) of the total asset value of the Acorn D-REIT is exposed to any one
issuer or institution or to members of the same group. Provided that this restriction shall not apply to
deposits, bonds or securities issued by, or guaranteed by the Government of Kenya or to deposits with a
banking institution licensed in Kenya. The REIT Manager will also be responsible for managing the other
Acorn D-REIT advisers that are appointed by the Trustee and to provide certain recommendations to the
Trustee, particularly the distribution recommendation.
Following the initial capital raise, the Promoter will contribute necessary funds to fulfil the working capital
requirement for the first 6 months. This would enable the Acorn D-REIT to fund the project capital
expenditures and necessary fund fees and expenses.
The next capital raise round is targeted to happen in Q2 2021 and so the promoter is offering to fulfil the
planned expenditure until that time over the 6-month period.
Page | 21
4.1.2. The Promoter does not expect the Independent Security Holders from the Initial Offer to consider
subscribing to additional Units soon after the Initial Offer. However, this option can be availed if of
interest to Independent Security Holders. Structure of the Acorn D-REIT
• Acorn has undertaken to acquire at least 30% of Units in the Offering. In addition, Acorn has entered
into a lock-in undertaking pursuant to which it has agreed to maintain this 30% holding until a Liquidity
Event occurs, subject to the Trust Deed;
• Acorn, as the Promoter will appoint the Trustee, following which, the Trustee in consultation with the
D-REIT Manager will appoint other service providers to the Acorn D-REIT, including the Valuer,
Structural Engineer and Project Manager Certifier. The D-REIT Manager will appoint the development
manager, property manager and any other service providers, in consultation with the Trustee;
• Acorn Project 2 LLP is wholly and beneficially owned by Acorn, will transfer its partnership interest to
the Acorn D-REIT before completion of the Offer;
• The DevCos in the table above own the individual property assets with each DevCo being an Investee
LLP;
• Acorn Project 2 LLP has debt funding from the local currency Green Bond, while Acorn Project [xx] LLP
represents future debt fund vehicles for the proposed pipeline.
4.1.3. Acorn D-REIT objective

The Acorn D-REIT is being established alongside the Acorn I-REIT. It is envisioned that the Acorn D-REIT will
invest in the acquisition of land/ properties, development, marketing, letting and stabilisation of income
generating rental housing primarily focused on the provision of accommodation for students.
(see Section 4.1.5).

The investment objectives of the Acorn D-REIT are to invest in assets that will enable the Acorn D-REIT to:
i. provide via development the most sought after, quality and secure PBSA within the Nairobi Metropolitan
area (Nairobi County and its neighboring counties); and
ii. provide an attractive risk-adjusted return profile to investors generated from the realized sales of
developed and operational PBSA projects.
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4.1.4. Eligible assets and proposed activities of the scheme

The Eligible Investments means the assets and investments specified under Regulation 76 and as defined in
the investment policy (Section 4.1.5) including:
a) Investment directly in eligible real estate in accordance with the Regulations;
b) Investment in eligible real estate assets through investment in an Investee LLP registered in Kenya which
directly owns the eligible real estate, and which is wholly beneficially owned and controlled by the Trustee
in its capacity as the trustee of the Acorn D-REIT where-
i. The Trustee has the absolute power at any time to appoint and, without incurring any liability, to
remove the Partners;
ii. The Trustee has control of the Investee LLP through a partnership agreement;
iii. The Acorn D-REIT Manager is appointed as the manager of the investments of the Investee LLP;
iv. The Partnership agreement of the Investee LLP limit the objectives of the Investee LLP and the
powers of the partners and impose the same obligations on the LLP and its partners as if the
Investee LLP was a D-REIT and an authorized scheme under the Act and the Regulations and was
subject to the same obligations and restrictions as are imposed by the Regulations;
v. The provisions of the Regulations on the carrying out of a valuation, reporting and audit apply to
the Investee LLP as if the Investee LLP was a D-REIT and an authorized scheme under the
Regulations;
vi. The Investee LLP invests directly in the eligible real estate and is recorded on the certificate of title
or certificate of lease or register as the sole owner;
c) Investment in eligible real estate assets through an investee trust in which the trustee of the Acorn D-REIT
in its capacity as Trustee is the sole beneficiary and has absolute control of voting and right to appoint and
remove the Trustee of the investee trust and where -
i. The investee trust is formed under the Laws of Kenya as an unincorporated common law trust;
ii. The D-REIT Trustee is also the trustee of the investee trust;
iii. The Acorn D-REIT is also the manager of the investee trust;
iv. The terms of the Trust Deed for the investee trust limit the objectives of the investee trust, the
Trustee’s powers and impose the same obligations on the Trustee and the manager of the trust as
if the investee trust was a D-REIT and an authorized scheme under the Regulations and subject to
the same obligations and restrictions as are imposed under the Regulations;
v. The provisions of the Regulations on the carrying out of a valuation, reporting and audit apply to
the investee trust as if the investee trust was a D-REIT and an authorized scheme under the Act
and the Regulations;
vi. The Trustee as trustee for the investee trust invests directly in the eligible real estate and is
recorded on the certificate of title or certificate of lease or register as the sole owner.
d) Investment in cash, deposits, bonds or securities and money market instruments;
e) Investment in a wholly beneficially owned and controlled company which conducts real estate related
activities; and
f) Investment in income producing assets including shares in property companies incorporated in Kenya
whose principal business is real estate related or Units in other Kenyan real estate investment trust
schemes.
4.1.5. Investment policy

Subject to the Act, the Regulations and the Trust Deed, the Acorn D-REIT Manager (acting reasonably) may
vary the main objective to take account of changing economic factors, tax laws and provisions and front
retaining cash or placing cash on deposit in terms of the Trust Deed. The Acorn D-REIT shall invest in
development of superior PBSA projects in compliance with the Act, the Regulations, the Capital Markets
Authority Policy Guidance Note (CMA PGN) on Green Bonds and Clause 6 of the Trust Deed, with the aim of
delivering strong capital growth and dividends over the medium to long-term following completion of the
projects, letting and sale of the properties to, amongst others, the Acorn I-REIT.
Page | 23
The Acorn D-REIT may only invest in Eligible Real Estate which demonstrates a minimum underwriting return
of at least fifteen per cent. (15%) and the maximum investment amount per property will be, in principle, not
more than twenty-five per centum (25%) of the total Net Asset Value of the Acorn D-REIT.
4.1.6. Current Borrowings of the Acorn D-REIT

As per the Investment Policy and the Regulation 81, the Acorn D-REIT may be leveraged for up to 60% of the
Total Asset Value.
In October 2019, Acorn issued a Green Bond for KES 4.3 billion, the raise was to provide financing for 6 of the
Projects that form the majority of the initial properties that are being taken over by the Acorn D-REIT, which
will be a means for providing the equity financing for future projects. Following the establishment of the Acorn
D-REIT, the Bond proceeds will form the debt financing in the Acorn D-REIT and will be used to bring these
initial properties to completion and stabilisation. At this point, the borrowings of the Acorn D-REIT are below
the regulatory borrowing limit.
A balance of KES 700 million remains as part of the Green Bond programme and Acorn is currently undergoing
a process to enhance the total raise under the Green Bond programme, which will then spread costs across a
wider range of projects.
Acorn will undertake the necessary approvals in order to transfer the Green Bond structure into the Acorn D-
REIT so that it can continue providing the debt financing for the Initial Assets, which are already a part of the
programme, even when the Green Bond is a part of the Acorn D-REIT.
4.2. Details of the Promoter
The Promoter of the Acorn D-REIT is Acorn Holdings Limited (“Acorn”). Acorn was formed jointly in 2015 by
Acorn Investments Limited (50%) and Accord Holdco (50%), owned respectively by the original shareholders of
the Acorn Group, predominately the management, one of Kenya’s leading property developers and project
managers, and Helios Investment Partners Limited, one of the largest and most successful Africa focused
private equity funds.
Acorn marries its extensive local experience of successfully developing Kenya’s marquee properties and
Helios’s expertise investing and developing in some of the continent’s most successful brands. Acorn continues
to grow and re-invent itself in the local market, always seeking the most innovative and profitable ways to
provide positive returns to its co-developers and shareholders. Acorn has grown from a project manager and
property developer, to a developer and operator of the first PSBA portfolio in sub-Saharan Africa. This evolution
adheres to Acorn’s long track record of innovation in the local real estate market.
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4.2.1. History and overview of Acorn

2001 2006 2008 2011
Established as
Renamed ACORN and
CONSOLSIA in 2001, Acorn completes the
added property Acorn completes
providing project Coca-Cola HQ in
development Deloitte HQ in Nairobi
management services Nairobi
capabilities.
across East Africa
Consolsia Ltd
2015 2016 2017 2018
Acorn Holdings Construction of the first Acorn completes

formed together with student Acorn’s first Qwetu Qwetu Ruaraka and
the leading African accommodation property, Jogoo Rd, signs KES 5b funding
Private Equity Firm, commences in Jogoo Rd commences operations agreement with OPIC
Helios and Ruaraka
Since its establishment, the Group has been developing capabilities in youth and student housing and has a
strategic mandate to focus on PBSA. Accomplishments since 2015 include:
◼ completing the construction of three buildings within budget and timelines and established
operations;
◼ developing and adding to its capabilities by on boarding key managers to run the operational side of
the business including recruitment of expatriates to obtain specific experience in the PBSA industry;
◼ developing an IT, operational, and marketing platform that can support the operation of PBSA at scale;
and
◼ ensuring the buildings comply with international environmental standards.
4.2.2. Acorn Group

Acorn Group was established in 2001, initially providing Project Management services across East Africa,
through its predecessor, Consolsia Ltd. Over the period since its inception, it grew to be one of the largest and
most successful developers in Kenya, and has delivered over 50 projects, valued in excess of US$550 million.
These include some of the most iconic projects in the region over the last decade such as the Coca-Cola
Regional Head Office, Deloitte Regional Head Office, Equity Centre, UAP Tower and Nakawa Business Park
(Kampala).
In 2006, Acorn added development capabilities and undertook a number of JVs such as Tiara Office Park, Acorn
House and Forest Edge Gardens.
Acorn has recruited a strong, competent and experienced management team to deliver on its strategy.
4.2.3. Helios Investment Partners

Helios Investment Partners (“Helios”) was founded in 2004 to focus exclusively on private investment in Africa.
Since its establishment, Helios has raised over US$ 2.3 billion through three private equity funds. Helios also
took over the Modern Africa Fund in 2004, rationalizing and fully exiting the portfolio by 2007. Helios’ diverse
LP base comprises a broad range of the world’s leading investors, including sovereign wealth funds, corporate
and public pension funds, endowments and foundations, funds of funds, family offices and development
finance institutions across the US, Europe, Asia and Africa.
Page | 25
In 2015, Helios established Helios Credit, a dedicated credit platform which also invests and manages the
TriLinc Global Impact Fund's Sub-Saharan term loan portfolio4.
Helios has an established fundraising private equity record:

◼ Fund I (2007): US$305 million
◼ Helios Towers Africa (2010): US$275 million
◼ Fund II (2010): US$908 million
◼ Fund III (2014): US$1.1 billion
◼ Additional circa US$670 million of co-investment generated across Funds I, II and III
◼ About to fundraise c. US$1.25 billion for Fund IV
Some of the current and previous equity stake investments Helios has made in Kenya include;
◼ Equity Bank: Kenya’s largest bank by number of accounts and among the top 3 in market capitalization
and assets.
◼ Vivo Energy: a leading pan-African downstream oil business which distributes and markets Shell-
branded fuels and lubricants across 15 African countries.
◼ Wananchi Group Holdings: the leading East African broadband-led cable triple play (internet, TV and
voice) provider.
◼ Telkom Kenya: the third largest mobile communications company in Kenya
◼ Africa Oil: an oil and gas company with assets in Kenya and Ethiopia as well as Puntland (Somalia)
through its equity interest in Africa Energy Corp. The Company is listed on the Toronto Stock Exchange
and on Nasdaq Stockholm under the symbol "AOI".
◼ Interswitch: a payment processing service provider operating in Kenya
◼ Mall for Africa; an online shopping platform that provides access to top US and UK retail sites
The partnership between Acorn Investments Limited and Helios is focused on the same core investment
themes, seeking opportunities where there is a large growing market that addresses supply side market
deficiencies. This has coalesced into a strategy to build and operate profitable, high quality and affordable
rental housing for young people starting with PBSA.
4 Heliosinvestment.com
Page | 26
4.2.4. Acorn’s Business Model
Following the launch of Acorn in 2015, the management team made the decision to exit the development of
commercial, retail and residential ‘For Sale’ developments due to the cyclical and shallow demand in these real
estate sectors that could not deliver strong, predictable and consistent long term returns at scale. Instead,
Acorn shifted focus to development of rental housing for young people in Nairobi, starting with student
accommodation under the Qwetu and Qejani brands, and eventually in the medium term Acorn will be moving
on to rental housing for young professionals, under the Palma brand. This decision was based on strong long
term macroeconomic and demographic tail winds supporting a huge multi-decade market demand for an
underserved segment of the market.
Acorn was the first real estate player to address the PBSA market in Kenya and currently owns the only 4
operating PBSA properties (with 2,300 beds) with a current pipeline of 5,500 beds under construction. Acorn
has equity backing from Helios with US$65 million committed to date. This investment has gone towards the
following:
i. Developing the pilot projects – Qwetu Jogoo Road, Qwetu Ruaraka, and Qwetu Parklands. This was
important because rental housing at scale had not been done in sub-Saharan Africa before and Acorn
needed to establish the capital costs of building the properties and the operating costs of running
them in order to demonstrate that it could be done profitably. This has now been done and the
properties have achieved full occupancy with long waiting lists and each property has also hit its target
Net Operating Income.
ii. Building a robust and active development pipeline of student accommodation projects. This pipeline
has about 10,000 beds to be constructed over two phases with the first phase of 5,500 being financed
by equity from Acorn and other potential investors in the Acorn D-REIT and the debt component by
the Acorn Project II LLP Green Bond that was issued in October 2019. The first of the projects financed
by this Bond and located near Strathmore University opened on 15th February 2020 with 728 beds and
30% of the beds were leased in less than 2 weeks of opening demonstrating the huge pent up demand
for high quality purpose-built student accommodation.
iii. Building the property operations platform: Operating rental housing at scale requires a huge
investment in a highly complex and sophisticated property operations business, whose operations
cannot be outsourced to an estate agent as it is closer in complexity to operating a hotel. Acorn has
invested in a highly specialized team, IT systems for tenant management, procurement, finance, sales
and marketing capability, security and safety, customer engagement, engineering and maintenance
etc. It is this operating capability that has allowed Acorn to achieve 100% rent collection with zero
leakage, high customer satisfaction scores, strong brand presence that is enabling it to fill buildings
much faster and keep the buildings well maintained and serviced. This should enable Acorn to continue
to deliver returns for many years to come without deterioration.
iv. Building the investment management platform: Rental housing at scale also requires huge capital
outlays and an appropriate investment structure that provides long term permanent capital in a tax
efficient manner. Consequently, Acorn has invested significant amounts of capital towards advisors,
systems, people and training, in setting the Acorn D-REIT and Acorn I-REIT which will become the long-
term vehicles through which properties will be developed and operated.
Acorn’s business is now structured as shown below:
Page | 27
Acorn’s Board of Directors

Name Profile
Dennis Aluanga, Mr. Aluanga, a Kenyan national, has 27 years of relevant professional
Chairman experience. Prior to joining Helios in July 2011, he was the COO (East Africa)
of Industrial Promotion Services (IPS), the Manufacturing and Infrastructure
arm of the Aga Khan Fund for Economic Development. IPS has investments
in several portfolio companies in food and agro-processing, packaging,
pharmaceutical, textiles, steel and leather processing industries as well as
power generation and telecoms across East Africa. He also served in the
roles of COO, CFO, Group Strategy Manager and Group Audit Manager at
Nation Media Group (NMG). NMG’s operations in the region spread across
newspapers, television, radio, magazines and digital media. Mr. Aluanga
serves on the Boards of Directors of Acorn and Telkom Kenya; as well as on
the Board of Nation Media Group.
He received an MBA from Edinburgh University, UK, and he is also a Certified
Public Accountant (CPA). Mr. Aluanga speaks Kiswahili.
Edward Kirathe, Mr. Kirathe, a Kenyan citizen aged 48 years, has vast experience in the real
Chief Executive Officer estate industry and has managed the delivery of the most iconic and
landmark buildings of the past decade such us the head office of Coca Cola
East and Central Africa (Nairobi), Deloitte East Africa head office, Equity
Center and Nakawa Business Park (Kampala).
Mr. Kirathe holds a Bachelor of Architecture Degree (honors) from the Jomo
Kenyatta University, is a member of the Association for Project
Management (UK) and the Architectural Association of Kenya. He is also a
Page | 28
Name Profile
registered Architect with the Board of Registration of Architects and
Quantity Surveyors of Kenya.
Kenneth Luusa, Mr. Luusa, a Kenyan citizen aged 52 years. He joined a leading International
Executive Director firm of Chartered Surveyors and worked in the property management
department of the firm’s Aberdeen Office where he was responsible for the
firm’s client portfolio in the North East of Scotland. Prior to joining the
Group, he was the Regional Chief Executive Officer of Property
Development and Management Limited (PDM), an Aga Khan Development
Network Company where he was responsible for managing and developing
the organization’s commercial Project Developments in East Africa.
Mr. Luusa is a seasoned professional and member of the Royal Institute of
Chartered Surveyors, The Institute of Surveyors in Uganda, a practicing and
Registered Valuation surveyor in Uganda and a Registered Real Estate Agent
in Kenya. He graduated from the University of Aberdeen (Scotland), with a
bachelor’s degree in Land Economics in 1990.
Peter Njenga, Mr. Njenga, a Kenyan citizen aged 47 years, is a Certified Public Accountant
Executive Director of Kenya, a qualification he earned from Strathmore Business School in
1998. Thereafter, he worked as a Tax/Management Consultant in a leading
audit firm for four years. He has over 15 years’ experience in senior level
management where he has assisted businesses develop and implement
appropriate strategies to achieve financial, tax and operational efficiency.
He is a member of the Institute of Certified Public Accountants of Kenya
(ICPAK).
Alykhan Nathoo Mr. Nathoo, born in Kenya, has more than 15 years of private equity
Non- Executive Director experience. Prior to joining Helios he was a Senior Principal at Bain Capital,
one of the world’s largest private equity firms where he spent nine years in
Boston and London. Subsequent to that he headed up the emerging
markets private equity investing business at Dubai International Capital. He
has experience across multiple industry sectors including financial services,
media and telecommunications, industrials, healthcare and mining services.
Mr. Nathoo currently also serves on the Board of Directors of Fawry,
Wananchi Group Holdings, Hytech and Interswitch.
He obtained a BA in Quantitative Economics with Distinction from Stanford
University and an MBA from Harvard Business School, where he was a Baker
Scholar.
Ameel Somani Mr. Somani, a Canadian citizen aged 35 years, has eight years of relevant
Non- Executive Director professional experience. He joined Helios in August 2012 after completing
his MBA at Harvard Business School. Prior to Harvard, Ameel was an
Associate at Teachers’ Private Capital based in Toronto, Canada. Prior to
Teachers’ Private Capital, he worked at CIBC World Markets as an Analyst in
their Investment Banking Mergers & Acquisitions Group. He serves on the
Board of Aga Khan Development Network East Africa Task Force.
In addition to an MBA from Harvard Business School, Mr. Somani also holds
a dual degree in Chemical Engineering and Economics from Queen’s
University, Kingston, Canada.
Page | 29
Name Profile
Ben Lim Mr Lim is the Chief Executive Officer of Intercontinental Trust Ltd. He has
Non- Executive Director been actively involved in the Mauritius international financial services
sector since its inception in the early 1990's and has played a decisive role
in the Global Business legal and regulatory reform process in Mauritius. Mr
Lim is the Honorary Consul of the Grand Duchy of Luxembourg in Mauritius.
He is also a member of the Young Presidents Organisation (YPO) Mauritius
Chapter and Pan African Chapter. He was, until March 2015, a Board
Member of the Board of Investment, the apex government organization
responsible for the promotion of Mauritius. He also
served as a member of the Financial Services Consultative Committee (FSCC)
which was constituted pursuant to the Financial Services Act 2007 under the
Chairmanship of the Vice-Prime Minister and Minister of Finance &
Economic Development.
A founding member of various international financial institutions, he acts as
Director on a number of them having a presence in Mauritius. He has a great
deal of experience in international tax planning and until April 2000, he was
an international tax and offshore services partner at De Chazal Du Mée.
Mr Lim studied at the Westminster University, London and afterwards
qualified as a fellow of the Institute of Chartered Accountants in England &
Wales.
Vishma Boyjonauth Mrs. Boyjonauth joined Intercontinental Trust Limited (“ITL”) in 2004 and
Non- Executive Director she is currently a Senior Manager in a Corporate Services Department. She
leads a team in the Corporate Services Department and oversees the
operations division such as incorporation of companies, advising on
company structures regulatory matters and corporate administration of
companies for both domestic and global business companies in Mauritius.
The extensive experience acquired in the global business sector by

managing a portfolio of clients ranging from international banks to private
client for over 15 years has provided Vishma with the skills and abilities
to sit on the board of various global business companies under the
management of ITL.
Mrs. Boyjonauth graduated from the University of Mauritius with a B.Sc

(Hons) in Economics. She also holds a MBA in Innovation & Leadership (with
Merit) awarded jointly by the University of Mauritius and Ducere Global
Business School.
4.2.5. Acorn’s Senior Management
Acorn is a non-operating holding company and as such has no employees. All the operational activities of
Acorn Group are carried out between AIML and AMSL (see Section 4.3 and 4.4 below).
4.2.6. Minimum regulatory investment by the Promoter

In accordance with the Section 84 of the Regulations, the Promoter is required to maintain investment in the
Acorn D-REIT as below:
i. a promoter who sells or transfers any real estate or proposes to transfer or sell any real estate to the
trustee of a D-REIT within a period one year of the establishment of the Acorn D-REIT shall maintain
an investment of at least 10% of their investment for two years from the close of the initial offer or if
Page | 30
the issue is to be listed from the date of first listing of the units. The units held by the promoter shall
not be sold or transferred during the lock in period except where the transfer is as a result of the death
or insolvency of the promoter;
ii. a promoter may, after the second anniversary of the close of the initial offer or issue, reduce its holding
to zero percent;
iii. the trustee shall not register any transfer by the promoter, if the transfer results in the promoter
holding units which are below the minimum level the promoter is required to retain during the lock in
period.
While the requirement is for the Promoter to maintain an investment of 10%, Acorn will have an initial
investment of at least 30% (approximately 63,237,390 Units valued at KES 2,7 million) in the Acorn D-REIT. In
addition, Acorn has undertaken to maintain the 30% holding until a Liquidity event occurs, subject to the Trust
Deed.
4.2.7. REIT Connected Parties to the Promoter

In the set-up of the Acorn D-REIT, the following are Connected Parties:
• Acorn is the promoter of the Acorn D-REIT and has undertaken to acquire a minimum of 30% of the
Units in the Offering until a Liquidity event occurs thereby remaining a Substantial Unit Holder.
• AMSL which is a wholly owned subsidiary of the Promoter and the development manager for the Acorn
D-REIT, the property manager for the Acorn D-REIT for the Stabilization Period and the administration
manager for the Acorn D-REIT;
• AIML which is the appointed D-REIT Manager, is a wholly owned subsidiary of Acorn;
• Acorn is also setting up the Acorn I-REIT, that will provide the preferred exit vehicle for the Acorn D-
REIT’s Stabilized Properties.
To mitigate against any potential conflicts of interest that may arise where any contemplated transaction
involves a Connected Party, the Acorn D-REIT Manager will maintain a Corporate Governance Committee
composed of at least two independent and non-executive directors which will review any Connected Party
transactions to ensure that it is on arms’ length terms, transparent and in accordance with Regulation 118 and
the Trust Deed. Further, the Acorn D-REIT Manager will maintain a bifurcated Investment Committee for the
Acorn D-REIT and the Acorn I-REIT with information barriers between members of the two Investment
Committees to ensure confidentiality and integrity of commercially sensitive information. Where the Acorn D-
REIT intends to sell a PBSA property to the Acorn I-REIT, the Acorn D-REIT Investment Committee will evaluate
the proposal and cause due diligence to be carried out which is independent of the evaluation and due
diligence conducted by the I-REIT Investment Committee. No director will be a member of both Investment
Committees at any one time. See details on the corporate governance structure (Section 4.3.3) that has been
put in place to ensure alignment of the connected parties with that of investors.
4.2.8. Promoter’s capacity to fund overruns

The Promoter may, but has no obligation to, fund cost overruns. In the event that any unscheduled cost
overruns are funded, additional securities will be issued to the Promoter for the same. Any other structure of
funding costs overruns will be discussed with and approved by the Trustee.
4.3. Details of the REIT Manager

AIML is a wholly owned subsidiary of Acorn and was incorporated as a private limited company on 30th June
2014. AIML was incorporated by Acorn Group Limited and Acorn Investments Limited as a special purpose
vehicle, although the company has remained dormant. In 2019, Acorn Group Limited and Acorn Investments
Limited transferred their entire shareholding to AMSL as sole shareholder in AIML. AMSL has subsequently
transferred its 100% shareholding to Acorn effective February 2020.
Page | 31
4.3.1. AIML Board of Directors
Name Profile
Rose Mambo, Ms. Mambo has twenty-six years’ experience in capital markets,
Independent Non-Executive governance, business and company law, and administration both in
Director & Board Chair Government and in the private sector.
Prior to joining the board of AIML, she served as the Chief Executive Officer,
Central Depository and Settlement Corporation (CDSC); a position she held
for 12 years.
Before joining the CDSC, Ms. Mambo was the Head of Compliance and Legal
Affairs and Company Secretary at the Nairobi Securities Exchange (NSE),
prior to which she worked as a Senior State Counsel at the office of the
Attorney General in the Intellectual Property, Registrar General and Public
Trust departments.
She holds an MBA from Strathmore Business School, Master of Laws from
American University, Washington DC, Bachelor of Laws, University of
Nairobi and a Diploma from the Kenya School of Law. Ms. Mambo is an
Advocate of the High Court of Kenya and is a Fellow of the Institute of
Certified Secretaries (Kenya).
Raghav Gandhi, Mr. Gandhi is a business leader and emerging markets specialist with almost
Managing Director 15 years’ experience in the real estate industry across South Asia, UK and
the Middle East and North Africa.
He is currently the CEO of RedBird & Partners - a real estate consultancy

focused on development and investment mandates. Previous engagements
include the acquisition of a £95 million real estate asset in London, UK and
the repositioning of an office asset in Edinburgh, UK.
Previously, he headed the Development Department for National Real

Estate Company, a major real estate developer in Kuwait, and was also
responsible for optimizing returns from several underperforming
investments. He also spent seven years in India, where he was a part of the
founding management team that established a commercial real estate
venture for the Bharti Group, building it into a $100 million enterprise. He
also raised $550 million in private equity transactions for DLF Ltd.
Mr. Gandhi is an MBA graduate of the Wharton School. He is also an

alumnus of the London School of Economics, where he obtained a
bachelor’s degree in Economics.
Peter Njenga, Please see Mr. Njenga’s biography above.
Executive Director
Winnie Nyamute (Dr.), Dr. Nyamute is a Kenyan citizen and a full-time Senior Lecturer and
Independent Non-Executive Consultant in the Department of Finance and Accounting at the University
Director of Nairobi.
She has served on the boards of the Nairobi Securities Exchange, Sameer
Africa PLC, the board of trustees of NSE Clear and of KCA University. She has
chaired the audit, risk management and governance committees of both
NSE and Sameer. Other committees served include: Disciplinary, Listing and
Page | 32
Name Profile
Admissions, Nominations and Remunerations, Derivatives Risk
Management, Self-Listing and the Audit Quality Assurance.
Dr. Nyamute was appointed to the board of the International Federation of
Accountants (IFAC) in November 2019.
She holds a PhD in Business Administration (Finance), an MBA in Finance
and a Bachelor of Commerce Degree in Accounting. She is a Certified Public
Accountant.
Ameel Somani, Please see Mr. Somani’s biography above.
Non-Executive Director
Robert Ndungu, Mr. Ndungu is a Certified Secretary with over 20 years’ experience in local
Company Secretary and international organizations. His experience in providing corporate
secretarial services spans over listed companies, not for profit and
corporate sectors. Mr. Ndungu also serves as secretary to various
companies operating in the financial services sector, real estate and
information technology among many others. He also helped in nurturing the
set-up of the Uganda Securities Exchange.
He is presently in charge of the Corporate Secretarial Services at BDO East
Africa and previously worked with PricewaterhouseCoopers LLP and
Deloitte & Touche.
Mr. Ndungu is a Graduate of the University of Nairobi and a Practicing
Member of the Institute of Certified Public Secretaries
Note: On conclusion of the Offer, the Anchor Investor will appoint a director to the board of AIML. An Anchor
Investor is defined as Infraco as long as they remain invested in one or both of the Acorn-sponsored REITs.
4.3.2. AIML Key Personnel
Name Profile
Raghav Gandhi, Please see Mr. Gandhi’s biography above.
Managing Director
Susan Wangui Mukora, Ms Mukora, a Kenyan citizen, is a finance professional with 15 years’
Finance Director experience.
Prior to joining Acorn in April 2019, she headed the Finance Department in
a leading regional Security Company, SGA Kenya Ltd overseeing finance
operations and strategy for 5 entities and overseeing more than 25 team
members. She also worked in the Telecom industry for 6 years in various
capacities from Finance Reporting Assistant Manager to Audit, Compliance
and Risk Manager. Susan started off her career in a leading audit Firm
PricewaterhouseCoopers LLP as an auditor and transitioned to Corporate
Advisory services.
She holds an MBA in Strategic Management from United States
International University Africa and a Bachelor of Commerce Finance from
the University of Nairobi. She is an ICPAK and a member of Institute of
Certified Public Accountants (ICPAK)
Page | 33
Name Profile
Alex Mugambi, Alex has over 12 years working experience in the legal and compliance field
Compliance Officer in the corporate, real estate, financial and capital markets industry across
East Africa.
Before joining AIML, Alex worked for Coulson Harney (Bowmans) and
Dentons Hamilton Harrison & Mathews firm of advocates from 2009 in the
Corporate departments and at Acorn Management Services Limited from
August 2016 as the Head of Legal where he is in charge in overseeing the
daily risk and compliance functions for the organization.
Wangui Maranga-Okello, Ms. Maranga-Okello is a Kenyan citizen aged 44 years and an experienced
Head of Corporate Finance financial services professional, having gained over 16 years’ experience in
and Investor Relations portfolio management, company valuations and financial analysis within
the fund management sector in East Africa. As a senior portfolio manager,
Wangui managed client assets worth billions of shillings in local equities,
fixed income, property and offshore investments. She has worked in various
areas of specialisation, including banks’ analysis and fixed income research
and strategy.
Wangui holds an MBA (Finance) from University of Leicester, Bachelor of
Commerce from University of Nairobi, is a qualified accountant with the
Association of Chartered Certified Accountants (ACCA) and has a Higher
Diploma from the Institute for the Management of Information Systems
(IMIS).
RSM, RSM East Africa is part of the RSM International; a leading provider of audit,
Independent Internal Auditor tax and consulting services globally with firms in over 116 countries.
RSM’s technical capabilities span a diversity of sectors among them real
estate and construction, Financial services, manufacturing, hospitality,
logistics among others.
The firm has been contracted to offer internal audit services as part of its
Risk Advisory service offering and has designated key staff with the requisite
experience led by Ashif Kassam who has over 25 years’ experience in audit
and assurance.
RSM shall apply the COSO Enterprise Risk Management framework in
undertaking this engagement which shall involve an analysis of the risks
associated with each business process.
4.3.3. Corporate Governance
The Promoter is committed to high standards of corporate governance.

The Acorn D-REIT Manager will be governed by a Board of Directors, which will comprise two Independent and
non-executive Directors, an Anchor Investor Director and four Promoter Directors. The Board will be
responsible for overseeing the management and business affairs of the Acorn D-REIT Manager and has the
overall responsibility for its performance.
The Board will have the overall responsibility for the performance of the Acorn D-REIT Manager by maintaining
full and effective control over strategic, financial, operational, compliance and governance issues.
The Anchor Investor will be allocated one seat on the Board of Directors and may nominate an observer to one
of the Investment committees alongside the Anchor Investor Director. The Anchor Investor Director will have
Page | 34
a seat in the Investment Committee for one REIT and may appoint a nominee of the Anchor Investor Director
to the investment committee of the other REIT. This nominee will not be an observer but a participating
member of the investment committee.
The Chairperson of the Board will be an independent and non-executive Director.
AIML Board of
Directors
1 Anchor
4 Promoter 2 Independent
Investor
Directors Directors
Director
Three key committees will be formed from the Board of Directors. Their roles and composition are defined
below.
i) Investment Committee
AIML will establish bifurcated Investment Committees for the Acorn D-REIT and the Acorn I-REIT.
The Acorn D-REIT Investment Committee will conduct due diligence which is separate from and independent
of any due diligence conducted by the Acorn I-REIT Investment Committee on the Acorn D-REIT’s Stabilized
Properties.
All the approvals, disapprovals, votes, determinations and other actions of the Acorn D-REIT Investment
Committee shall be authorized in accordance with the Acorn D-REIT’s Investment Committee's Terms of
Reference.
The Board will establish information barriers between members of the Acorn D-REIT Investment Committee
and the Acorn I-REIT Investment Committee to ensure confidentiality and integrity of commercially sensitive
information and the Board will ensure that no director is a member of both Investment Committees at any one
time.
The Acorn D-REIT Investment Committee shall compose of three directors comprised of at least one
independent and non-executive director, one Promoter director and one Anchor Investor Director (or a Person
nominated by the Anchor Investor Director to act in their place) or, if the Anchor Investor ceases to hold Units,
an Independent Director.
All members of the Acorn D-REIT Investment Committee will be senior business and industry professionals with
relevant experience of handling investments, business affairs and management of large business organizations.
Page | 35
D-REIT
Investment
Committee
Independent or
Promoter Promoter
Anchor
Director Director
Director
D-REIT Asset Manger
ii) Audit and Risk Committee

The Audit and Risk Committee shall compose of three directors comprising at least one independent and non-
executive director, one Promoter director and one Anchor Investor director, with recent financial experience,
and the Chairperson will be a holder of a recognised accounting or related financial management qualification.
The Audit and Risk Committee will:
iii) oversee the Acorn D-REIT’s financial reporting process and disclosure of its financial information to
ensure that its financial statements are correct, sufficient and credible;
iv) review and monitor the independence and performance of the statutory auditor of the Acorn D-REIT,
and effectiveness of the audit process; and
v) review the Acorn D-REIT’s annual financial statements and auditor’s report thereon, before submission
to the board of directors of the Acorn D-REIT Manager for consideration and approval
Audit & Risk

Committee
Promoter Independent or Independent or

Director Anchor Director Anchor Director
vi) Corporate Governance Committee

The Corporate Governance Committee will be responsible for reviewing related party transaction processes
and shall be composed of three directors and shall comprise of two independent and non-executive directors
and one Anchor Investor director.
The Corporate Governance Committee shall have the authority to:
• receive reports on all Connected Party Transactions;
• investigate related party transactions; and
• recommend corrective actions for any violations in the conduct of related party transactions to the
board of directors of the Acorn D-REIT Manager
Corporate
Page | 36
Governance
Committee
4.3.4. Role of AIML as the D-REIT Manager
The Acorn D-REIT Manager shall, subject to the terms of the Scheme Documents and any directions in writing
received from the Trustee:
i. acquire, manage, maintain and dispose of REIT Assets and, where authorized by the
Scheme Documents, conduct development and construction activities in accordance
with the provisions of the Scheme Documents, the Regulations and the law applicable
to trusts, to give effect to the objectives of the Acorn D-REIT;
ii. appoint a property manager in accordance with Regulation 55 of the Regulations;
iii. take all reasonable steps and exercise due diligence to ensure that the REIT Assets are
invested in accordance with the Scheme Documents;
iv. while acting in the capacity of a fiduciary on behalf of the Security Holders: -
a) exercise the degree of care and diligence that a reasonable and skilled person
would exercise in the position of a REIT Manager;
b) act in the best interests of the Security Holders and, where there is a conflict
between the interests of the Security Holders and that of the Acorn D-REIT
Manager or any Connected Party of the Acorn D-REIT Manager, give priority
to the interests of Security Holders;
c) save as expressly provided for in, and subject to the Connected Party
provisions of, the Trust Deed, avoid creating any conflict with any member of
the Acorn Group or any person advised by any member of the Acorn Group;
d) observe high standards of integrity and fair dealing in managing the Fund to
the best and exclusive interests of the Security Holders;
e) not use information acquired in its capacity as Acorn D-REIT Manager to gain
an unfair advantage for itself or other persons, or to the detriment of the
Security Holders;
f) ensure that the REIT Assets are clearly identified and held separately from the
assets of the Acorn D-REIT Manager or any other person; and
g) establish and maintain risk management systems and controls and ensure that
it has adequate resources and systems, including suitably qualified and
equipped human resources to fulfil its functions and obligations.
v. In addition to the duties specified above, the Acorn D-REIT Manager shall:
(i) account to the Trustee and the Security Holders for any loss suffered by the Acorn
D-REIT as a result of failure by the Acorn D-REIT Manager, any director, any officer,
Page | 37
employee or agent appointed by the Acorn D-REIT Manager to exercise the required
standard of care and diligence necessary to operate and manage the Fund;
(ii) maintain, on behalf of the Trustee, proper accounting records and other records to
enable an accurate view of the Fund to be formed;
(iii) prepare accounts and provide all assistance necessary to enable an audit of the
accounts prepared in accordance with the Regulations;
(iv) take all reasonable steps and exercise due diligence to assist and ensure that the
Fund is valued as required by the Regulations;
(v) for the Stabilization Period of any property owned by the Acorn D-REIT, obtain
tenants and manage tenancy arrangements and carry out or cause to be carried out
all property management functions in compliance with Estate Agents Act, Cap 533
of the Laws of Kenya and, if required, enter into a duty of care agreement or lender
direct agreement as approved by the Trustee;
(vi) obtain quotations for insurance of the REIT Assets and make recommendations to
the Trustee;
(vii) prepare budgets for capital works and maintenance of the REIT Assets;
(viii) recommend to the Trustee for approval any budgets for capital works and
maintenance and, upon such approval, implement the approved budgets, capital
works and maintenance programmes;
(ix) implement any budgets, work programmes and contracts approved by the Trustee
in relation to the development and construction works, update budgets and work
programmes as required and recommend changes to the Trustee;
(x) prepare and submit to the Trustee recommendations on distributions;
(xi) undertake, or otherwise procure the undertaking of, all calculations, including
calculations of Net Asset Value, and ratios required to comply with the terms of the
Scheme Documents and the Regulations;
(xii) arrange and recommend to the Trustee for approval any borrowings or other
financing arrangements and the entering into of any risk management products or
strategies;
(xiii) make recommendations to the Trustee and manage repayment and
compliance with the terms of any borrowing arrangement;
(xiv) take all reasonable steps and exercise due diligence to ensure that the Units
are correctly priced and the provisions of the Scheme Documents on redemption are
complied with;
(xv) prepare and lodge with the Authority, and circulate to the Trustee and Security
Holders, periodic reports as required under the Regulations;
(xvi) ensure that the Scheme Documents are available to any Security Holder; and
(xvii) ensure that the Investment Policy set out in Trust Deed is adhered to by the
Acorn D-REIT provided that:
(a) the Acorn D-REIT Manager shall have the power to make non-material
amendments or revisions to the Investment Policy from time to time, at a
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minimum on an annual basis, on the recommendation of the D-REIT

Investment Committee and following approval by the Trustee, without
requiring a vote of Security Holders; and
(b) any material changes to the Investment Policy shall require the approval of
the Security Holders acting by way of a Special Resolution.
vi. The Acorn D-REIT Manager shall, in the performance of its duties, act in the best
interests of Security Holders as beneficiaries of the Acorn D-REIT and take reasonable
care to protect those interests.
vii. The Acorn D-REIT Manager shall conduct all transactions at arm’s length and in an
open and transparent manner. The Acorn D-REIT Manager shall avoid such acts or
conduct of transactions that would result in unnecessary cost or risk to the Fund
and/or the Acorn D-REIT.
viii. Where the Acorn D-REIT Manager intends to conduct a transaction with a Connected
Person, the Acorn D-REIT Manager shall comply with the provisions of Clause 32
(Connected Person Transactions) of the Trust Deed and Regulation 118.
b. The Acorn D-REIT Manager shall, in the exercise of its powers and execution of its duties under
the trust Deed, take all reasonable measures to avoid potential conflicts of interest that may
affect the Acorn D-REIT Manager’s ability to discharge its functions in accordance with the
Regulations.
vii. In addition, The Acorn D-REIT Manager agrees and undertakes that it shall comply and
shall not, and shall procure insofar as it lawfully can that the D-REIT shall not, engage
in any activity or conduct that has or will result in a violation of:
a) any Applicable Laws, including but not limited to laws relating to economic or
trade sanctions;
b) the provisions of the PIDG OPPs, the PIDG Investment Policy, the PIDG Annual
HSES Reporting Guideline and the PIDG HSES Standards and Policies applicable
to it; and
c) any Anti-Bribery and Tax Evasion Laws and shall procure that the D-REIT
maintains in place Adequate Procedures (which shall be applicable to it and its
Group) to prevent bribery, money laundering, tax evasion and corruption; and
d) provide an annual HSES report in accordance with the PIDG Annual HSES
Reporting Guideline.
4.3.5. Terms of the appointment of the REIT Manager
i. The Trustee has appointed the Acorn D-REIT Manager to provide REIT management services, pursuant
to the terms of the D-REIT Management Agreement.
ii. The Acorn D-REIT Manager shall diligently provide the Services and take all steps within its reasonable
control to ensure that the Acorn D-REIT complies with the Scheme Documents and the Regulations.
iii. The Acorn D-REIT Manager shall keep the Authority, the Security Holders, and any Recognized Listing
Exchange informed as soon as may reasonably be practicable, but in any event not later than the end
of the next working day, of any information which the Trustee or the Acorn D-REIT Manager becomes
aware of relating to the Acorn D-REIT, the D-REIT Scheme, its assets or the Acorn D-REIT Manager
which:
a. is necessary to enable Security Holders or potential investors to appraise the financial
position, performance and the state of corporate governance of the Acorn D-REIT or the
Acorn D-REIT Manager; or the valuation of any REIT Asset;
b. is necessary to avoid the establishment of a false market in the Units; or
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c. might reasonably be expected to materially affect market activity in the price of the
Units.
iv. The Acorn D-REIT Manager shall update the Trustee on a regular basis and inform the Trustee of any
information which is not within the knowledge and control of the Trustee and which requires
disclosure so as to enable the Trustee to fulfil its obligations under Clause iii.
v. The duties and obligations of the Acorn D-REIT Manager specified in the D-REIT Management
Agreement shall be without prejudice to the terms of the Trust Deed, and where there is any
inconsistency between the terms of the D-REIT Management Agreement and the Trust Deed, the terms
of the Trust Deed shall take precedence.
4.3.6. Powers and obligations of the REIT Manager

i. The Acorn D-REIT Manager shall, in the case of receipt of notice of voluntary resignation of the Trustee,
and in consultation with the Trustee, engage with the Security Holders and alternative parties for the
purposes of appointing a replacement Trustee in accordance with the Regulations.
ii. The Acorn D-REIT Manager shall facilitate the removal of the Trustee, in accordance with the
Regulations, in the case of failure or neglect of duty or repeated breach of the Act, Regulations or
Scheme Documents or where Security Holders, by Special Resolution so resolve to remove the Trustee.
iii. The Acorn D-REIT Manager shall, with the approval of the Trustee, appoint a property manager and
such other agents as it considers necessary and delegate its functions in relation to the investment to
such appointees. Provided that the Acorn D-REIT Manager shall be responsible for the actions of the
property manager and such agents so appointed and supervise the property manager and such agents
to ensure that the property manager complies with the terms of the Scheme Documents, the Act and
the Regulations.
iv. The Acorn D-REIT Manager shall only recommend, and the Trustee may, in accordance with the
recommendations, only make distributions to Security Holders from Realized Capital Gains, realized
income or from cash held in the Fund which is surplus to the development requirements of the Acorn
D-REIT.
v. The distribution of Realized Capital Gains will be done in the same manner as distribution of income
once the Acorn D-REIT Manager has resolved to make a distribution.
vi. Any distributions to Security Holders will be net of payments to senior lenders.
vii. The Trustee shall, in accordance with the Regulations, distribute to Security Holders within two months
of the second year of such realization, any Realized Capital Gains which have not been invested within
a period of two years from the date of realization.
viii. Where the Trustee fails to distribute income pursuant to the Acorn D-REIT Manager’s
recommendations and the Regulations:
a. the Acorn D-REIT may cease to be classified as a real estate investment trust scheme for
taxation purposes;
b. subject to the Scheme Documents, the Security Holders may institute a cause of action
against the Trustee or the Acorn D-REIT Manager; and
c. the Authority may revoke the authorization issued by it under the Regulations.
ix. The Acorn D-REIT Manager may propose, and the Trustee may pay a distribution in excess of the
current income where the Acorn D-REIT Manager, after consultation with the Trustee, certifies on
reasonable grounds that:
a. immediately after making such distribution, the Acorn D-REIT shall be able to pay, out of
the REIT Asset, the liabilities incurred on behalf of the trust as and when they fall due and
the projected liabilities for at least the next year; and
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b. the payment will not adversely affect the capacity to maintain and preserve the assets.
x. The Acorn D-REIT Manager shall disclose to the Trustee, the basis of calculation of the distribution of
income proposed under Clause ix above and report such proposal as part of the continuing disclosure
requirements under the Regulations.
4.3.7. Appointment of service providers
In accordance with Regulations 62, 97-100 and 111-117 the D-REIT Manager, shall, in consultation and with
the approval of the Trustee, appoint the service providers required for the running of the Acorn D-REIT.
4.4. Details of the Development & Property Manager

Acorn Management Services Limited (“AMSL”), a wholly owned subsidiary of Acorn, is a company incorporated
in Kenya as a limited liability company and established in 2015 offering development/project and property
management services. Since its establishment, AMSL has delivered over 50 projects valued in excess of US$550
million. Over this period, AMSL has honed its expertise in property development and management establishing
a specialized operating model that enables it to efficiently and successfully deliver on its mandate.
4.4.1. AMSL Operating Model
AMSL’s operating platform is organized into 3 units:

i. Development Management – that leads in the processes of the property development from land
acquisition all the way to the completion of the properties;
ii. Property Management – that leads the operational side of the business taking over the property at
completion, stabilizing the properties post development and continuing their day to day operation;
iii. Support functions – these are the functions that are used across the group in finance, IT, HR, supply
chain and corporate affairs.
4.4.2. AMSL Board Members
The AMSL board is comprised of the following, whose profiles can be found in Section 4.3.1:
Name Position on the Board
Dennis Aluanga Chairman, Non-Executive Director
Edward Kirathe Executive Director
Kenneth Luusa Executive Director
Peter Njenga Executive Director
4.4.3. AMSL Senior Management
The profiles of Edward Kirathe (Managing Director), Ken Luusa (Chief Officer - Commercial), Peter Njenga
(Chief Operating Officer) are in Section 4.3.1
Name Profile
Indresh Saluja, Mr. Saluja, a Management Graduate of 2001, has work experience of over
Chief Officer - Property fifteen years spanning various operational and strategic responsibilities at
Operations Bharti Airtel Limited and Etisalat DB Telecom Ltd. He is a Certified Six Sigma
Master Black Belt, Scrum Master and Lean Champion. He holds certification
in Design Thinking from MIT – Sloan School of Management.
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Name Profile
He has worked closely with over 25 CEOs, MDs and Owners of businesses,
facilitating organization wide business transformation and operational
excellence interventions.
In his stints across various functions, organizations and as a consultant, he
was committed to supporting individuals and teams to innovate strategies
to operationalize business goals using Design Thinking, and Lean Principles
and to channelize them to adopt a systemic perspective for heightened
business results.
Wambu Kariuki, Mr. Kariuki is a Kenyan citizen aged 39 years and a Director within the
Director, Development Development Management Division at Acorn. He joined as a Senior Project
Manager in 2013 and has been responsible for the management of a
portfolio of numerous commercial office developments in the region, as
well as various purpose-built student accommodation projects in Nairobi.
Wambu previously worked for over 10 years in the UK for a Civil Engineering
consultancy where he was involved in the design and project management
of various bridge design projects.
Sam Miringu, Mr. Miringu is a Kenyan citizen aged 40 years and has vast experience in the
Head of Construction construction industry having managed a portfolio of residential, hotel,
Management master plans and commercial projects for some of the largest corporates in
the region.
Sam has been with Acorn from inception in December 2002. Over the years,
Sam has gained vast knowledge and expertise in real estate sector and as a
result has been able to successfully deliver projects to client’s expectations.
Sam is registered with the Association for Project Management (APM) based
in the UK and holds a diploma in architecture.
Jennifer Padayatchy, Ms. Padayatchy is aged 35 years and an HR professional with over 13 years'
Director, Human Resources experience. Prior to joining Acorn in October 2018, she worked for a major
multinational in the fast-moving consumer goods sector, in various
geographies including East & Central Africa, West Africa and North Africa.
Jennifer holds a bachelors' degree in Management from the University of
Mauritius and is an associate member of IHRM Kenya.
Jackie Rozario, Ms. Jackie is aged 46 and a Customer Experience Professional with over 15
Director, Customer Experience years’ experience.
Prior to joining Acorn in April 2019, she worked in the Telecom Industry as
a Customer Experience Director. She has also worked in the Pay TV Industry
in Kenya in a senior management Level as Head of Operations. She
commenced her customer experience journey in the telcom industry - Celtel
Uganda, before it transitioned to Zain and later Airtel and has worked in
both Ugandan and Kenyan markets where she served in various capacities
and grew to the Head of Retail Operations and Customer Experience
Management.
Jackie holds an MBA in Strategic Management from Edinburgh Business
School and a Bachelor of Commerce Accounting from Makerere University.
She is a Lean Six Sigma Professional.
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Name Profile
Sheila Moraa, Ms. Moraa is a Kenyan citizen aged 36 years and has 11 years’ experience in
Acorn Green Ambassador the energy and real estate sectors and has managed the delivery of power
plants (Kindaruma and Olkaria 3 Power Plants), delivery of a commercial
office building currently hosting Huawei and involved in the design of the
student housing Acorn is undertaking.
She holds a Bachelor of Science Degree in Civil Engineering (honors) from
the Jomo Kenyatta University, is a certified PRINCE 2 practitioner and
currently pursuing an Executive MBA with Strathmore Business School.
4.5. Details of the Trustee

The Co-operative Bank of Kenya Limited (“Trustee”) is incorporated in Kenya under the Companies Act and is
licensed by the Authority to provide REIT trustee services and also licensed to do the business of banking under
the Banking Act.
The Trustee was initially registered under the Co-operative Societies Act at the point of founding in 1965. This
status was retained up to and until June 27th 2008 when the Trustee’s Special General Meeting resolved to
incorporate under the Companies Act with a view to complying with the requirements for listing on the Nairobi
Securities Exchange (NSE). The Trustee went public and was listed on December 22nd 2008.
Shares previously held by the 3,805 Co-operative Societies and unions were ring-fenced under Co-op Holdings
Co-operative Society Limited which became the strategic investor in the Trustee with a 64.56% stake.
The Trustee runs four subsidiary companies, namely:
• Kingdom Securities Limited: This is a stockbroking firm with the bank holding a controlling 60% stake.
• Co-op Trust Investment Services Limited: This is the fund management subsidiary wholly owned by the
bank.
• Co-op Consultancy & Insurance Agency Limited (CCIA): This is the corporate finance, financial advisory
and capacity-building subsidiary wholly owned by the bank.
• Co-operative Bank of South Sudan: This is a subsidiary where the Trustee holds 51% stake and the
Government of South Sudan has a 49% stake.
Trustee’s Experience and Platform
The Trustee has offered Custodial and Trustee services to a wide range of clients including retirement funds,
collective investment funds and other investment companies since 2001 and is regulated by the following
bodies:
a) The Capital Markets Authority (CMA)
b) The Retirement Benefits Authority (RBA)
c) Central Bank of Kenya (CBK)
The Trustee is also regulated under the Central Depositories Act as a Central Depository Agent (CDA) and holds
a CMA license as a REIT Trustee.
Page | 43
4.5.1.Coop Bank Board Members

Name Profile
John Murugu, OGW
Joined the Board of Directors on 27th May 2015 and became Bank
Chairman
Chairman on 1 October 2017. He is a leading banker and public finance
expert; served as the Director-Debt Management Ministry of Finance -
Treasury. He has previously been an alternate director for the Permanent
Secretary-Treasury, in Kenya Commercial Bank, Industrial Development
Bank, and at Jomo Kenyatta University of Agriculture and Technology. He
has over 25 years of banking experience at the Central Bank of Kenya
Limited notably as the Director Bank Supervision. He holds a Bachelor of
Education Degree and Master of Arts in Economics and is an Associate of
the Chartered Institute of Bankers (ACIB).
Macloud Malonza, HSC
Joined the Board of Directors in 2005 and became the Bank Vice
Vice Chairman
Chairman on 1 October 2017. He is notably the Chairman of Co-op
Holdings Co-operative Society Ltd, the 65% strategic investor in the bank.
He holds a Bachelor of Arts degree, a master’s in organizational change
and development, Master of Business administration, Post-graduate
Diploma in Management and Information Systems, Certificate in
Strategic Planning and Management and CPS 1. He has also attended
Senior Management and Strategic Leadership Development Courses. He
has served in various positions in the Civil Service and is Chairman of
Harambee Co-operative Society Limited that serves employees of the
various Government departments under the Office of the President.
Dr. Gideon Muriuki, CBS Appointed Managing Director in 2001 and has presided over the Bank’s
Group Managing Director & CEO turnaround from a massive loss position of KShs. 2.3 billion in the year
2000, to a profit before tax of KShs. 20.71 Billion In 2019. He joined the
Bank in 1996 as a Senior Corporate Manager then became Director,
Corporate and Institutional Banking in 1999 before his appointment as
Managing Director in 2001 with a clear mandate to return the Bank into
profitable trading. Holds a Bachelor of Science degree in Mathematics, is
a Fellow of the Kenya Institute of Bankers and was awarded an Honorary
Doctorate in Business Management in year 2011. He has over 31 years
experience in banking and finance and he was voted CEO of the year
Africa 2014 by the International Banker. He is Vice-President Africa –
International Co-operative Banking Alliance (ICBA), former Chairman,
Governing Council of the Africa International University and former
Chairman, African Rural and Agricultural Credit Association (AFRACA). He
was decorated in 2005 with the award of Order of the Grand Warrior
(OGW), in 2011, award of the Moran of the Order of the Burning Spear
(MBS), in 2017 with Chief of the Order of the Burning Spear first class
(CBS) in recognition of his successful turnaround of the Bank and
exemplary service to the nation. He is a recipient of a decoration of
Chevalier de L’orde National du Burkina Faso by the President of Burkina
Faso in recognition of his outstanding contribution to development of
rural finance in Africa, 2016 Lion of Judah Award by Evangelical Alliance
of Kenya and Mtumishi Bora Grand Award - 2016 by the Kenya Christian
Professionals Forum for his great servant leadership as a committed
Christian leader in the marketplace. In 2018, he was awarded Best
Banking CEO Kenya by International Finance.
Wanyambura Mwambia
He was appointed a Director on 7th August 2013, as the alternate to the
Principal Secretary, National
Principal Secretary - National Treasury. He is the Deputy Director
Treasury appointee
Page | 44
Name Profile
Economic Affairs in charge of Tax and Administration and private Sector
issues and holds a BA (Hons) in Economics and Sociology from the
University of Nairobi and an MA in Development Economics from
Dalhouse University Canada. He has had a successful career in the Civil
service for a period of over 33 years in the Ministry of Foreign Affairs and
Ministry of Finance & Planning. He has brought a wealth of experience in
finance and management in the public sector Government departments
under the Office of the President. He is the Chairman of the Board Risk
Committee.
Margaret Karangatha (Mrs.),
She was appointed as a director of the Bank on 24th September, 2019.
Director
She is the Executive Director of The Lead Consortium Ltd and has over
the last 25 years been consulting in Kenya and many African countries.
She is an Executive Coach and mentor, and a Facilitator/Organizational
Development Consultant in disciplines such as Health Care Industry,
Publishing, Engineering, Real Estate, Educational Institutions, and
Floriculture among others. She has served on several boards with the
current being the outgoing Board Chairman of the Navigators Economic
Transformation Facility and Regional Treasurer of Scripture Union Africa.
She specializes in Organizational Planning, Leadership and Human
Resources Management and Finance for Finance and Non-Finance
Managers. She has worked as a Management Coordinator for United
Bible Societies overseeing work in over 34 Countries in Africa for 15 years
and is an Associate Consultant with AMREF, CORAT and Kenya Institute
of Management (KIM). Mrs. Karangatha holds a Bachelor’s degree in
Commerce (Accounting Option) from the University of Nairobi, a
Master’s degree in Business Administration (MBA, Strategic
Management) from United States International University and is a
Certified Public Accountant – Kenya (ICPAK). She is the Chairperson of
the Board Credit Committee.
Patrick Githendu
Joined the board in 2017 having served in the Board of Co-optrust
Director
Investment Services Ltd since 1998 and the Board of Co-op Consultancy
& Insurance Agency Ltd since 2009. He is a businessman, with vast
experience particularly in the coffee industry. He is the Vice Chairman of
Co-op Holdings Co-operative Society Limited and Director of Kingdom
Securities Limited. He is a Director in Kenya Co-operative Coffee
Exporters (KCCE).
Julius Sitienei
Joined the Board of Directors in 2003. He is a businessman and an
Director
educationist with over 20 years’ experience in the teaching profession
before he took leadership positions in the management of co-operative
societies. He is a Director of Co-op Holdings Co-operative Society Limited
and the Chairman of Kingdom Securities Limited. He holds a Bachelor of
Business Administration degree in Human Resources Management.
Lawrence Karissa
Joined the Board of Directors on 27th May 2015. He has over 25 years’
Independent Director
experience in banking having previously served in various senior
positions in Co-operative Bank of Kenya. He has previously worked for
PricewaterhouseCoopers LLP. He holds a Bachelor of Commerce degree
in Accounting and is a Certified Public Accountant of Kenya CPA (K). He
is the Chairman of the Staff and Nomination Committee.
Page | 45
Name Profile
Benedict Simiyu
Joined the Board of Directors in 2014. He is an Educationist and holds a
Director
Diploma in Education Management. He has also attended various
management courses. He is a non-executive Board member of Ng’arisha
Sacco (Former Bungoma Teachers Sacco). He is a Director of Co-op
Holdings Co-operative Society Limited.
Richard Kimanthi
Joined the Board of Directors in 1994. He is a businessman and has
Director
served in various leadership positions in the co-operative movement for
a considerable period. He holds a Diploma in Co-operative Management.
He is a Director of Co-op Holdings Co-operative Society Limited.
Wilfred Ongoro, HSC
Joined the Board of Directors in 2006. He is an educationist with over 20
Director
years’ experience and has served the co-operative movement in various
positions. He is currently the Chairman of one of the largest Sacco’s in
Kenya. He is a Director of Co-op Holdings Co-operative Society Limited.
Godfrey Mburia
Joined the Board of Directors in 2017, having served in the Subsidiaries
Director
Board since 2004. He is an Accountant by profession and served as Head
of Finance, Meru Central Farmers Union. He is a Director of Co-op
Holdings Co-operative Society Limited and the Chairman of Kenya Co-
operative Coffee Exporters (KCCE).
Weda Welton Joined the Board of Directors in 2020. She is currently an independent
Human Resources Consultant/private business. She is a former Director
– Human Resources with the Bank and retired in the year 2014 after an
exceptionally decorated career with the Bank spanning over 20 years.
She has over 35 years’ experience in Human Resource Management in
banking and financial sectors. Mrs. Welton holds a Bachelors’ degree in
Arts from the University of Delhi, a Diploma International Law and
Diplomacy from The Indian Academy of International Law and Diplomacy
and a Masters degree in Human Resources Management and
Development from Manchester University, UK. She has been a member
of the Human Resources Committee of the Kenya Bankers Association,
IPM (K) and Kenya Institute of Management.
She diligently served the Bank with dedication and commitment. She has
also been a director of Menno Plaza Limited and a Trustee of the Bank
Pension Scheme. Mrs. Welton notably implemented the current Bank
structure in liaison with Mckinsey in the year 2014 just before she left.
This restructuring through the “Soaring Eagle” Transformation Agenda
has seen to the great growth in the Bank performance
4.5.2. Coop Bank Senior Management

Dr. Gideon Muriuki (CEO) profile is above.
Name Profile
Anthony Mburu A career banker with over 20 years of banking experience both in Kenya
Director, Credit Management and the region. Most of these years were spent in the line of Credit and
Division Risk Management. He holds a bachelor’s degree in Commerce and has
attended various proprietary and international Credit courses. He is also
a Director of Kenya Co-operative Coffee Exporters (KCCE) Limited.
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Name Profile
Samuel Birech He joined the bank in 2002 and is a career banker with over 20 years’
Director, Human Resources & experience in local and international banks. He has held various senior
Administration Division positions including the Director, Retail Banking for 8 years, Chief
Operating Officer. He is currently responsible for driving operational
efficiency and excellence in shared services to provide frontline teams
with seamless delivery systems and processes deriving from his wide
experience in overall frontline Business and risk management. He holds
a Bachelor of Commerce degree from the University of Nairobi and has
attended various local and international courses. He is a Board Member
at Pan Africa Christian University
Patrick Nyaga Has over 22 years’ experience mainly in auditing and banking. Previously
Director, Finance & Strategy served at KPMG (EA), with the main focus being audit and assurance of
Division financial institutions and especially banks in Kenya and the region. He
then joined main-line banking where he has worked for over 13 years.
He holds an MBA from Strathmore Business School, a Bachelor of
Commerce degree in Accounting, is a Certified Public Accountant (K) and
a member of ICPAK. He is also a Director of CIC General Insurance Limited
and a member of Institute of Directors.
Samuel Kibugi Has over 15 years’ experience as a lawyer and prior to joining Co-op Bank
Company Secretary in 2008, worked for a leading bank as a Legal Counsel. He is an Advocate
of the High Court of Kenya, a member of the Institute of Certified Public
Secretaries ICPS (K) and an Associate Member of the Chartered Institute
of Arbitrators. As the Company Secretary of the Co-op Bank Group, he is
responsible for overall provision of legal counsel and company
secretarial services, fraud prevention and investigations. He is also the
Trust Secretary for the Co-operative Bank Foundation, the corporate
social responsibility vehicle of the bank.
Vincent Marangu Joined the bank in 2003 and has wide experience in business and
Director, Cooperatives Banking financial advisory working with Co-operatives and rural finance sectors
Division as Head of Co-op Consultancy and Insurance Agency Ltd. Vincent has key
competencies in corporate finance, strategic planning, business
planning, organizational development and business operations review.
He has consulted for Co-operatives in Kenya and East Africa region and
implemented many donor projects with international agencies. He holds
a bachelor’s degree in Economics and Business Studies and is a graduate
of the School of African Microfinance. He is a member of the Association
of Professional Co-operators (APC), Kenya.
Jacqueline Waithaka A career Corporate Banker with over 15 years of experience. Joined the
Ag. Director, Corporate & Bank in 2005 as a Corporate Credit and Sales Analysts, later promoted to
Institutional Banking Division Relationship Manager managing key corporates, and has grown through
the ranks and taken on increasing responsibilities within the division. In
2015 she was appointed as the Head of Corporate Banking to oversee
the growth of the Bank’s Corporate and later promoted to Director,
Corporate & Institutional Banking Division.She holds a Bachelor of Laws
degree from Catholic University and a Bachelor of Business
Administration degree from Washington International University. She
holds a diploma in Banking; advanced diploma Credit Management by
Omega of UK and Culhane of South Africa. She is a Certified Engagement
and Productivity Coach CEPC (ICF) and has attended various courses
including executive leadership at Strathmore Business School and
Harvard Kennedy School Executive Education on adaptive leadership for
Africa.
Page | 47
Name Profile
William Ndumia He joined the bank in 2006. He is responsible for the Retail and Business
Director, Retail & Business Banking Division, focusing specifically on growing consumer banking,
Banking SME business as well as optimal delivery of the expansive branch
network and other bank channels.
He is an experienced banking operations expert having previously
worked for international banks in various technical, controls and
compliance roles. He holds a Bachelor of Science Degree in Mechanical
Engineering and has attended various courses on project management
and risk management both locally and internationally. He has overseen
execution of various technical projects including the implementation of
the core banking system, card management system and a global review
of all bank processes among others.
Lydia Rono A career banker with 29 years of banking and has worked in various
Director Operations Division senior positions in the Co-operative Bank of Kenya, last position being
Director Corporate banking Division. She is responsible for crucial
business growth in the Corporate & Institutional Banking division
providing leadership in the various business units under her. She holds a
bachelor’s degree in Commerce and an MBA from University of Nairobi
and has attended various local and international courses on
management.
Arthur Muchangi He joined the bank in 2003. He supports key compliance and governance
Director Compliance issues in the bank and reports to the audit committee of the board. He
has over 24 years banking experience, spanning extensively across both
corporate and retail banking. He holds a Bachelor of Arts Degree in
Economics and has attended a number of courses both locally and
internationally
Anthony Wangare He joined Kingdom Securities Ltd as the Managing Director in April 2019.
Managing Director, Kingdom He has 20 years professional experience in the Kenyan capital market
Securities Ltd regulatory and investment industry. His experience includes market
compliance and development, structuring and negotiating deals with
investors and sponsors, negotiation, trading and distribution of both
equity and debt instruments in the country. Anthony’s previous roles
include General Manager at Barclays Financial Services Ltd, Head of Fixed
Income Securities at SBG Securities Ltd, and prior to that, held senior
management roles at African Alliance, Suntra Investments Ltd. and the
Nairobi Securities Exchange. He has an MBA in Strategic Management
from United States International University, Nairobi.
Robert Morris Aloo He joined the bank in 2013. He has over 10 years’ experience in Treasury
Treasurer management. He is responsible for the bank’s Treasury management and
growth objectives. Prior to joining Co-operative Bank of Kenya, he
worked as Head of Treasury in KCB Bank Uganda Ltd. He holds an MBA
in Finance from USIU Africa and a Bachelor of Arts Degree in Land
Economics from the University of Nairobi. He is a Certified Public
Accountant (K) and a member of ICPAK. He is also a member of The
Financial Markets Association of Kenya (ACI Kenya).
Charles Washika Joined the bank in 2015 and brings extensive experience in providing
Director- ICT and Innovations leadership in ICT, Innovation, Project Management and Change
management of mission critical Financial Systems. He is responsible for
Co-operative Banks Strategic technological direction, championing the
use of Information and communication Technology to meet the Bank’s
Page | 48
Name Profile
Strategic objectives and providing strategic leadership to align
investments in ICT with the Bank’s strategy. He has managed the
Implementation of Core Banking systems around Africa and Asia
including Uganda, South Africa, Côte D Ivoire, Senegal, Zambia, Tanzania,
Kenya, India and Sri Lanka. Holds Bachelor of Education Degree, and is
currently pursuing a Master of Science degree in Computer Systems. He
is a member of the Project Management Institute and has attained
various Technology Certifications
Nicholas Kamonye He joined the Bank in 2005. At Co-op Consultancy and Insurance Agency
Head- Co-op Consultancy & he gives leadership to the various capacity building initiatives targeting
Insurance Agency cooperative societies across the country. He has consulted for
cooperatives on microfinance, financial modelling, strategic and
business planning, business process improvements and human resource
development. He holds a Bachelor of Commerce Degree in Finance,
Diploma in Project Management, is a Certified Public Accountant (K) and
a member of ICPAK.
Nicholas Ithondeka He joined Co-op Trust Investments Ltd (CISL) as the Managing Director &
Managing Director CEO in April 2016. Prior to joining CISL he served as Vice President,
Co-op Trust Investment Services Pinebridge Investments (EA) Ltd and before that as a Portfolio Manager
Ltd at Old Mutual Asset Managers (OMAM). He has over 13 years’
experience in Investment advisory and Fund Management Services.
Nicholas holds a Bachelor of Science Degree in Actuarial Science from the
University of Nairobi. He is a member of the Institute & Faculty of
Actuaries (UK), ICIFA (Kenya) and is also a Certified Public Accountant of
Kenya (CPA (K). He serves as the Chairman of the Alternative Investments
Comm. in Fund Managers Association (FMA) and also a Board Member.
He is a board member of Bond Markets Association (BMA) of Kenya.
Nicholas has attended a number of courses in Investments and Strategy
as well as received several awards both locally and internationally within
the investment banking industry.
Joseph Gatuni He is responsible for the Internal Audit function that evaluates the
Chief Internal Auditor effectiveness of risk management, control and governance processes of
the bank, its subsidiaries and related companies. He is an experienced
professional in internal/external audits, consultancy and risk
management. He holds a Bachelor of Commerce Degree, Certified Public
Secretaries CPS (K), Certified Internal Auditor (CIA) and Certified public
accountants CPA (K). He has also attended various audit and Risk
management training both locally and internationally. He is a member of
the Institute of Public Accountants of Kenya (ICPAK) and the Institute of
Internal Auditors.
Details of Compliance Officer

Name Profile
Henry Karanja He is responsible for the AML/CFT compliance function for the bank, its
Head, Compliance subsidiaries and related companies. He is an experienced professional in
Risk, compliance and Anti-money Laundering. He holds a bachelor’s
degree in business management, Certified Public Accountants of Kenya
CPA (K), Certified Information Systems Auditor (CISA), Certified Public
Secretary (CPS). He has attended various AML/CFT training both locally
and internationally. He is a member of the Institute of Public Accountants
of Kenya (ICPAK).
Page | 49
4.5.3. Trustee’s Role

Subject to the provisions of the Trust Deed, the Regulations and the Act, the Trustee shall have all powers
necessary to protect the interests of Security Holders in terms of the Act, the Regulations and the Trust Deed
and shall, save as otherwise provided in the Trust Deed, have authority necessary to carry out the function and
purposes of the Trust to secure the fulfilment of the objects of the Acorn D-REIT. In particular, the Trustee
shall:
a) Act in accordance with the terms of the Trust Deed, the Scheme Documents, the Act and the
Regulations;
b) Act honestly and in a fiduciary capacity as Trustee in the best interests of the Security Holders as
beneficiaries of the real estate investment trust and the Trustee’s discretions;
c) Fulfill the obligations and duties set out in the Trust Deed, the Scheme Documents and in conformity
with the Regulations;
d) Act in accordance with any other law applicable to Trustees, including the Trustee Act;
e) Maintain custody, hold and protect all the REIT Assets, ensure they are held in the name of and where
registration is provided for are registered in the name of the Trustee or Investee LLPs owned and
controlled by the Trustee and if required in the name of any secondary disposition trustee and ensure
that all the necessary filings and registrations are recorded, undertaken and maintained;
f) Protect interests of the Acorn D-REIT in any asset;
g) Ensure that the REIT Assets are:
i. Clearly identified as the assets of the trust and the scheme;
ii. Held separately from any other assets of the Trustee and of any secondary disposition trustee
and any other trust, scheme or person;
iii. Not included in the accounts of the Trustee; and
iv. Not charged, pledged or dealt with except in accordance with the provisions of the Trust Deed,
the Act and the Regulations.
h) Appoint the D-REIT Manager and, if necessary, to protect the interests of beneficiaries, remove the D-
REIT Manager and appoint a substitute D-REIT Manager in accordance with the Act, the Regulations
and any relevant Scheme Document;
i) Act as the D-REIT Manager on a temporary basis in any period where there is no other D-REIT Manager
until a new D-REIT Manager is appointed;
j) Supervise the activities of the D-REIT Manager to ensure that they comply with the terms of the
Scheme Documents, the Act and the Regulations;
k) Not delegate to the D-REIT Manager except if appointed by the Authority as a secondary disposition
trustee or to any other person not being an officer or employee of the Trustee any function of or
involving:
i. Supervision of the D-REIT Manager; or
ii. The custody or control of the assets of the scheme;
l) Ensure that:
i. The Fund and the REIT Assets of the scheme are invested in accordance with the terms of the
Trust Deed, the Act and the Regulations;
ii. Income of the scheme is applied in accordance with the terms of the Scheme Documents;
iii. REIT Assets which are insurable are insured and valued as required by the Scheme Documents,
the Act and the Regulations;
Page | 50
iv. All payments and distributions made out of the REIT Assets are made in accordance with the
terms of the Scheme Documents, the Act and the Regulations;
v. Any borrowing limitations set out in the Scheme Documents, the Act and the Regulations are
complied with;
m) Act in the best interests of the Security Holders and if there is a conflict between the interests of the
Trustee or any member of the Trustee Group and those of any Security Holders (other than any
member of the Trustee Group), then the Trustee shall give priority and preference to the interest of
the Security Holders;
n) Not make use of confidential information acquired when acting as the Trustee to gain an improper
advantage for itself or for another person or to cause detriment to a Security Holders;
o) The Trustee shall act in accordance with the instructions of the D-REIT Manager provided that the
instructions are:
i. In accordance with the terms of any Scheme Document;
ii. In accordance with the provisions of the Act or these Regulations and the law relating to Trusts
and Trustees,
iii. In the Trustee’s opinion is in the best interests of the Security Holders.
p) The Trustee has power to appoint valuers, lawyers, accountants and other professionals for the
purpose of permitting it to carry out its duties and perform its obligations and shall charge the fees,
cost and expenses of such as an expense to the Acorn D-REIT.
All legal proceedings which may be instituted by or against the Acorn D-REIT shall be instituted by or against
the Trustee in its capacity as such, and the Trustee shall have the power and be capable of instituting,
prosecuting, intervening in or defending any legal proceedings of whatsoever nature relating to or concerning
the Acorn D-REIT or its affairs and as a prerequisite to such action, to require the D-REIT Manager to indemnify
it against all costs and expenses thereby incurred. The Trustee shall in no way be liable to make any payment
hereunder to any Security Holder except out of any funds held by or paid to it for that purpose under the
provisions hereof.
The Trustee shall cause a valuation of the real estate assets of the trust to be conducted and ensure that other
REIT Assets are appropriately valued:
i. Prior to acquisition or disposal of any asset;
ii. Prior to the initial issue or offer of any Units except where the issue or offer is made to the
promoter or to Connected Persons;
iii. On an annual basis or shorter period as is necessary to enable the Trustee and or the D-REIT
Manager to prepare the reports required to be prepared under the Trust Deed, the Act or the
Regulations or to fulfill its obligations as trustee;
iv. If the Auditor, the Anchor Investor or the Security Holders request (acting by way of an
Ordinary Resolution) request;
v. In accordance with Clause 28 of the Trust Deed; and
vi. At any other time, if the Trustee or the D-REIT Manager or the auditor is of the opinion that it
is desirable in the interests of the Security Holders that a valuation be conducted or that there
has been a material change that may result in the then current valuation being incorrect.
Save as disclosed herein, the Trustee does not have any potentially conflicting nor competing roles nor any
current pending or threatened litigation which might materially affect the resources or financial capacity of the
Trustee to fulfil its role or responsibilities as the trustee of the Acorn D-REIT.
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4.5.4. Powers and obligations of the Trustee

Subject to the provisions of the Trust Deed, the Regulations and the Act, the Trustee shall have all powers
necessary to protect the interests of the Security Holders in terms of the Act, the Regulations and the Trust
Deed and shall, save as otherwise provided in the Trust Deed, have authority necessary to carry out the
function and purposes of the Trust to secure the fulfilment of the objects of the Acorn D-REIT.
In particular, the Trustee shall:
i) act in accordance with the terms of the Trust Deed, the Scheme Documents, the Act and the Regulations;
ii) act honestly and in a fiduciary capacity as Trustee in the best interests of the Security Holders as
beneficiaries of the real estate investment trust and the Trustee's discretions;
iii) fulfil the obligations and duties set out in the Trust Deed, the Scheme Documents and in conformity with
the Regulations;
iv) act in accordance with any other law applicable to Trustees, including The Trustee Act;
v) maintain custody, hold and protect all the REIT Assets, ensure they are held in the name of and where
registration is provided for are registered in the name of the Trustee or an Investee LLP controlled by the
Trustee and if required in the name of any secondary disposition Trustee and ensure that all the necessary
filings and registrations are recorded, undertaken and maintained;
vi) protect interests of the Acorn D-REIT in any asset;
vii) ensure that the REIT Assets are:
a. clearly identified as the assets of the trust and the scheme;
b. held separately from any other assets of the Trustee and of any secondary disposition Trustee and
any other trust, scheme or person;
c. not included in the accounts of the Trustee; and
d. charged, pledged or dealt with except in accordance with the provisions of the Trust Deed, the Act
and the Regulations.
The Trustee hereby acknowledges that it has a fiduciary obligation to the Security Holders to ensure that
its own accounts do not include the REIT Assets.
viii) appoint the Acorn D-REIT Manager and, if necessary, to protect the interests of beneficiaries, remove the
Acorn D-REIT Manager and appoint a substitute D-REIT Manager in accordance with the Act, the
Regulations and the Trust Deed;
ix) act as the D-REIT Manager on a temporary basis in any period where there is no other D-REIT Manager
until a new D-REIT Manager is appointed;
x) supervise the activities of the Acorn D-REIT Manager to ensure that they comply with the terms of the
Scheme Documents, the Act and the Regulations;
xi) not delegate to the Acorn D-REIT Manager except if appointed by the Authority as a secondary disposition
Trustee or to any other person not being an officer or employee of the Trustee any function of or involving:
a. supervision of the Acorn D-REIT Manager; or
b. the custody or control of the REIT Assets;
xii) ensure that:
a. the funds and the REIT Assets are invested in accordance with the terms of the Trust Deed, the Act
and the Regulations;
b. income of the scheme is applied in accordance with the terms of the Scheme Documents;
c. REIT Assets which are insurable are insured and valued as required by the Scheme Documents, the
Act and the Regulations;
d. all payments and distributions made out of the REIT Assets are made in accordance with the terms
of the Scheme Documents, the Act and the Regulations; and
e. any borrowing limitations set out in the Scheme Documents, the Act and the Regulations are
complied with;
Page | 52
xiii) act in the best interests of the Security Holders and if there is a conflict between the interests of the
Trustee or any member of the Trustee Group and those of any Security Holders (other than any member
of the Trustee Group), then the Trustee shall give priority and preference to the interest of the Security
Holders;
xiv) not make use of confidential information acquired when acting as the trustee to gain an improper
advantage for itself or for another person or to cause detriment to a Security Holder;
xv) The Trustee shall act in accordance with the instructions of the Acorn D-REIT Manager provided that the
instructions are:
a. in accordance with the terms of the Trust Deed and any Scheme Documents;
b. in accordance with the provisions of the Act or the Regulations and the law relating to trusts and
Trustees, and
c. in the Trustee’s opinion is in the best interests of the Security Holders.
xvi) The Trustee has power to appoint valuers, lawyers, accountants and other professionals for the purpose
of permitting it to carry out its duties and perform its obligations and shall charge the fees, cost and
expenses of such as a Recoverable Expense to the Acorn D-REIT.
xvii) All legal proceedings which may be instituted by or against the Acorn D-REIT shall be instituted by or
against the Trustee in its capacity as such, and the Trustee shall have the power and be capable of
instituting, prosecuting, intervening in or defending any legal proceedings of whatsoever nature relating
to or concerning the Acorn D-REIT or its affairs and as a prerequisite to such action, to require the Acorn
D-REIT Manager to indemnify it against all costs and expenses thereby incurred. The Trustee shall in no
ways be liable to make any payment hereunder to any Security Holder except out of any funds held by or
paid to it for that purpose under the provisions hereof.
4.6. Details of the Property Valuer

Tysons Limited has been a player in the Real Estate Sector in Kenya and the East African Region since 1923
when it was founded by Mr. George A. Tyson. The company specializes in Valuation of Land, Buildings, Plant,
Machinery, Farm Machinery, Motor Vehicles, Fixtures, Fittings, Furniture, Laboratory/Office Equipment, and
stock in addition to General Estate Agency, Property & Facilities Management, Project Management and Real
Estate Research.
The firm has therefore been offering valuation services for the last Ninety Seven (97) years to clients in Kenya,
Uganda, Tanzania, Ethiopia, Seychelles and as far as Gambia in West Africa.
Brief Company History:

• 1923 - Established as a one man business by George A. Tyson.
• 1940 - Changed name to George A. Tyson and Partners after other professionals invited.
• 1946-7 - George A. Tyson elected and served as the Mayor of Nairobi.
• 1960 - More partners admitted and the company incorporated as a Limited Liability Company, changing
name to TYSONS LIMITED.
• 1972 - Demise of Mr. George A. Tyson who had already passed on the baton to other directors.
• 1976 - Merger of Tysons Limited with Habenga Corporation and name changed to Tysons Habenga Limited
under the chairmanship of Mr. Peter Habenga Okondo.
• 1985 - The Company’s name reverted to Tysons Limited.
Currently, the company is owned by six directors and other professionals who are fully qualified real estate
consultants and are all working on a full time basis in the firm.
Page | 53
4.6.1. Board of Directors

Name Profile
Samuel O. Odiembo Mr. Odiembo has been with Tysons Limited for 25 years. He holds a
CEO and Managing Director B.A.(Hons) in Land Economics (1989) from the University of Nairobi.
Professionally, Mr. Odiembo is a Full Member of the Institution of
Surveyors of Kenya (MISK No.424), a Registered Valuer (VRB No.219)
and a Registered Estate Agent (REA No.943). He previously worked at
Milligan & Company Limited before joining Tysons Limited in 1995. Mr.
Odiembo has 31 years’ experience in valuation work having undertaken
valuations for major clients in Kenya such as Telkom Kenya Limited,
Kenya Reinsurance Corporation, Mumias Sugar Company, Chemelil
Sugar Company, Kenya Power & Lighting Company. In Uganda he has
undertaken valuations for the Madhvani Group including Kakira Sugar
Limited, Mwea Tea, Kakira Oil & Soap, Uganda Unga Limited. He has
been an examiner for the Institution of Surveyors of Kenya (ISK) and is
past Vice Chair, Valuers Registration Board (VRB). In his social
interactions, Mr. Odiembo is a member of the Public Service Club and
Muthaiga Golf Club.
Bartholomew Ragalo Mr. Ragalo has been with Tysons Limited for 44 years having joined the
Chairman company straight from the University of Nairobi. He previously served
as the company’s Managing Director and Chief Executive Officer for over
10 years. He holds a B.A.(Hons) in Land Economics from the University
of Nairobi (1976) and an MBA in Strategic Management (2004) from the
University of Maastritch (Netherlands) in conjunction with ESAMI.
Professionally, Mr. Ragalo is a Full Member of the Institution of
Surveyors of Kenya (MISK No.151), a Registered Valuer (VRB No.86) and
a Registered Estate Agent (REA No.46). He has carried out valuation work
extensively in the region in countries such as Uganda, Tanzania,
Seychelles in Eastern Africa, Gambia in West Africa and Kenya. In his
social interactions, Mr. Ragalo is a Past Chairman, Captain, Director and
Secretary of Royal Nairobi Golf Club.
Richard M. Kiambi Mr. Kiambi has been with Tysons Limited for 25 years having joined the
Director company in 1995. He holds a B.A.(Hons) in Land Economics (1991) from
the University of Nairobi. Professionally, Mr. Kiambi is a Full Member of
the Institution of Surveyors of Kenya (MISK No.439), a Registered Valuer
(VRB No.242), a Registered Estate Agent (REA No.517) and a Lead Expert
– Environmental Impact Assessment / Audit (NEMA No. 2948). He
previously worked at Bageine Karanja Mbuu Limited and Mwaka Musau
Consultants before joining Tysons Limited in 1995. Mr. Kiambi has 29
years’ experience in valuation work in the coastal region having
undertaken valuations for major clients in Kenya such as Kenya Ports
Authority, Kenya Petroleum Refineries, Kenya Ferry Services, Sanmarco
Space Centre, Telkom Kenya Ltd, Kenya Cashenut Factory, Sarova Group
of Hotels, Alliance Hotels, Travellers Hotels, Bamburi Beach Hotels,
Mombasa County Government, Kenya Power & Lighting Company and
Banking and Financial Institutions. Currently he is serving as a member
of the Estate Agents Registration Board. In his social interactions Mr.
Kiambi is a member of the Mombasa Club and Mombasa Golf Club.
Page | 54
Name Profile
Stephen Odhiambo Omengo Mr. Omengo has been with Tysons Limited for 24 years having joined
Director Tysons Limited straight from the University of Nairobi. He holds a
B.A.(Hons) in Land Economics from the University of Nairobi (1996) and
a M.Sc. in Information Systems Engineering (2009) from the University
of Sunderland. Professionally, Mr. Omengo is a Full Member of the
Institution of Surveyors of Kenya (MISK No.580), a Registered Valuer
(VRB No.334), a Registered Estate Agent (REA No.1139) and a Registered
Lead Expert - Environmental Impact Assessment/Audit (NEMA No 2101).
Mr. Omengo has 24 years’ experience in valuation for Banking
Institution, Commercial/Corporate Properties, Industries such as Hotels,
Insurance, Oil Companies, Industrial Properties, Pension Schemes
Assets, Universities and Schools, Farm Valuations and Co-operative
Societies. Additionally, he is a pioneer and experienced in valuation of
REITs, Stanlib Fahari I-REIT and also in project management particularly
the African Guarantee Fund (AGF) office development in Nairobi. He has
been an examiner for the Institution of Surveyors of Kenya (ISK) and is a
past Chairman, Valuation and Estate Management Surveyors Chapter of
the Institution of Surveyors of Kenya.
Paul Kamau Njuguna Mr. Njuguna has been with Tysons Limited for 16 years having joined the
Director company in 2004. He holds a B.A.(Hon) in Land Economics (1992) from
the University of Nairobi. Professionally, Mr. Njuguna is a Full Member
of the Institution of Surveyors of Kenya (MISK No.526) and a Registered
Valuer (VRB No.311). He previously worked at Bagaine Karanja Mbuu Ltd
before joining Tysons Limited 2004. Mr. Njuguna has 28 years’
experience in valuation work having undertaken valuations for major
clients in Kenya such as Telkom Kenya Ltd, Kenya Reinsurance
Corporation, Kenya Power & Lighting Company. He has been an
examiner for the Institution of Surveyors of Kenya (ISK).
Wycliff Ongwae Mr. Ongwae has been with Tysons Limited for 20 years having joined
Director Tysons Limited straight from the University of Nairobi in 2000. He holds
a B.A.(Hon) in Land Economics (2000) from the University of Nairobi.
Professionally, he is a Full Member of the Institution of Surveyors of
Kenya (MISK No.662), a Registered Valuer (VRB No.419) and a Registered
Estate Agent (REA No.1227). Mr. Ongwae has 20 years’ experience in
valuation work having undertaken valuations for major clients in Kenya
such as Telkom Kenya Ltd, Shell Petrol Stations, & Housing Finance
Corporation Properties. In addition, he has vast experience in
Commercial Real Estate Management such as the management of Social
Security House, Telpota Towers, Ukulima House and others.
4.6.2. Senior Management and other Technical Staff

Staff Member Academic Professional Qualifications Experience in
Qualifications Valuation
Sarah O. Makokha (Ms) B. Com 1st Class Certified Public Accountant 6 Years
(Finance) CPA(K)
MBA (Finance) (ICPAK No.8343)
Page | 55
Samson A. Lusichi B.A.(Hon) in Land MISK (No.973); 11 years

Economics Registered Valuer (VRB No.572)
Benson Githinji B.A.(Hon) in Land MISK (No.1465); 12 years

Economics Registered Valuer (VRB
No.666);
Registered Estate Agent (EARB
No.666)
Dan Barasa B. Real Estate (Hons) GMISK 5 Years
Rosalyn Migwi (Ms) B. Real Estate (Hons) GMISK 7 Years
Nene Nyamai B. Real Estate (Hons) GMISK 3 Years
Karama Ogova B. Real Estate (Hons) GMISK 3 Years
Dennis Nyagah B. Real Estate (Hons) GMISK 2 Years
Christopher Mwenda B. Real Estate (Hons) GMISK 2 Years
4.6.3. Appointment of the Valuer

i) The Trustee in consultation with the Acorn D-REIT Manager shall:
a. appoint a valuer to value the real estate assets which have been vested in the trust or acquired
or are proposed to be acquired by Trustee;
b. ensure that where necessary, an additional, alternative or substitute valuer is appointed on a
timely basis in the event of –
i. the retirement, removal or the valuer otherwise ceasing to act;
ii. the valuer not being qualified to act; or
iii. an additional valuation report being required;
c. where the Acorn D-REIT has assets which are not real estate assets and which are not in the
form of cash, bank deposits or listed Units, then the Trustee in consultation with the Acorn D-
REIT Manager may appoint a suitably qualified specialist independent professional valuer to
undertake the valuation of those assets.
ii) The valuer shall be appointed for a term of not more than three years and except with the prior approval
of the Authority, may not be reappointed as valuer of the scheme at the conclusion of such term or until
lapse of three years from the date of expiry of any prior term;
iii) The Trustee, in consultation with the Acorn D-REIT Manager, shall where-
a. for any reason, or in respect of any acquisition or disposal or a specific transaction, the valuer
ceases to be independent; or
b. the Trustee is of the opinion that, given the nature of the asset; the valuer does not have the
required skills;
appoint another Valuer for the specific purpose of conducting the required valuation.
iv) A person shall only be eligible to be appointed as a valuer of real estate assets or a specialist valuer if that
person meets the criteria set out in the Regulations.
Page | 56
v) All valuations prepared by any Valuer shall be addressed to the Trustee and expressed to be for the benefit
of the Trustee as Trustee of the real estate investment trust and the Units Holders as beneficiaries of the
real estate investment trust.
vi) The Trustee shall not appoint a Valuer who has been appointed in the Acorn I-REIT or any other scheme
that is also managed by the Acorn D-REIT Manager.
vii) A Valuer may not to be considered independent if-
a. that Valuer falls within the definition of a Connected Person or is a Connected Person of any
member of the Acorn Group;
b. the Valuer or its partners, directors, officers or key personnel hold Units in the Acorn D-REIT;
c. the Valuer has any financial, professional or other interests that could affect the ability of the
Valuer to render unbiased professional services to the Trustee in relation to the scheme or its
assets including any assets that it considers acquiring; or
d. In the case of a valuation that is conducted in connection with the disposition or acquisition or
proposed disposition or acquisition of an asset, the Valuer has within the two years
immediately prior to the date of the valuation undertaken or been retained to provide a
valuation for the counterparty or proposed counterparty to the disposal or acquisition.
viii) A Valuer shall-
a. Include in any valuation undertaken by that Valuer, a declaration as to its independence and
evidence of the currency of its professional liability insurance; and
b. On request, provide the Trustee with a declaration and evidence of the currency of insurance
for inclusion in any periodic report the Trustee is required to prepare.
ix) A Valuer shall inform the Trustee immediately if the Valuer becomes aware of any potential conflict or
event that would cause the Valuer to cease being independent generally or where it would not satisfy the
requirements of the Regulation generally or in respect of a particular or proposed valuation, disposition or
acquisition.
x) Where any Valuer appointed under this provision:
a. Generally, ceases to be independent or qualified for appointment, the Valuer shall retire and
the Trustee in consultation with the Acorn D-REIT Manager shall within a period of thirty days,
appoint a new Valuer, or
b. Would not be independent in respect of a particular or proposed disposition or acquisition or
notifies the Trustee that it does not satisfy the requirement then the Trustee in consultation
with the Acorn D-REIT Manager, shall appoint an alternative Valuer to act in respect of that
particular transaction and any subsequent valuations of that particular asset.
xi) A Valuer shall observe the restrictions and the obligations set out in the Regulations
xii) The Trustee shall observe a valuation of the REIT Assets to be conducted and ensure that the REIT Assets
are appropriately valued:
a. prior to acquisition or disposal of any asset;
b. prior to the issue or offer of any Units, including for the avoidance of doubt, any Connected
Party Transactions ;
c. on an annual basis or shorter period as is necessary to enable the Trustee and or the Acorn D-
REIT Manager to prepare the reports required to be prepared under the Trust Deed, the Act
or the Regulations or to fulfill its obligations as Trustee;
d. if the Anchor Investor, Auditor or the Security Holders request (acting by way of an Ordinary
Resolution); and
e. at any other time, if the Trustee or the Acorn D-REIT Manager or the Auditor is of the opinion
that is desirable in the interests of the Security Holders that a valuation be conducted or that
there has been a material change that may result in the then current valuation being incorrect
xiii) A Valuer shall conduct a full valuation of all the real estate assets:
a. based on a full physical inspection of all sites and inspection of all buildings any facilities
erected thereon associated plant and equipment at least once every three years; and
b. based, in each other, on a desktop review unless the Valuer is of the opinion that a full physical
inspection is necessary or is requested by the Trustee to conduct a full physical inspection.
xiv) The Trustee and the Acorn D-REIT Manager shall, where the REIT Assets involve-
a. Land or real estate under development or construction; or
Page | 57
b. A contract to acquire assets under construction; ensure that the project manager certifier
prepares an assessment report.
xv) An assessment report made under Clause 28. 14 by the project manager certifier shall include-
a. the estimate of the cost to complete the development of construction;
b. the costs incurred to date in the development or construction;
c. the progress against the original and any revised schedule, contract, or project plan
d. a comparison of costs incurred against the original and any amended budgets.
xvi) A valuer shall not be required to accept the contents of the assessment or report prepared under
paragraph (xiv) in its valuation, but shall disclose the details of the assessments or report and include
comments on the impact, if any, of the assessment or report on the valuation.
xvii) Unless a specialist valuer is appointed the Acorn D-REIT Manager shall value cash, bank deposits, bonds,
other assets of a similar type and listed Units on a daily basis and report to the Trustee at the conclusion
of each working day and provide the Trustee with details of such valuations so as to enable the Trustee
to fulfill its obligations under the Act and these Regulations.
xviii) Where –
a. the Trustee, at the request of the Acorn D-REIT Manager, proposes to issue new Units for
subscription; or
i. redemption is required or permitted the Trustee proposes to redeem Units; or
b. the assets were last valued more than six months prior to the proposed issue or redemption,
c. then, as a minimum, a desktop valuation not involving a full physical inspection, shall be
conducted by the Valuer prior to the issue or redemption provided that the Acorn D-REIT
Manager and the Valuer certify to the Trustee that they are not aware of any fact or condition
that would have resulted in values of the real estate’s assets to have changed materially.
xix) Valuations shall be conducted on the basis and in accordance with the procedures and methodologies set
out in the Fifth Schedule to the Regulations as well as the valuation standards published and adopted by
the Institution of Surveyors of Kenya and the Valuers Registration Board or, for the purposes of determining
Fair Value, applicable International Financial Reporting Standards.
xx) The Trustee shall remove a Valuer if –
a. The Valuer ceases to be qualified under the Regulations other than where a Valuer has a
conflict or is otherwise not qualified only in respect of a particular acquisition or disposition
and an alternative Valuer has been appointed for the purpose of undertaking such valuation.;
b. The Valuer goes into liquidation, becomes bankrupt or if a receiver or administrator is
appointed over the assets of the Valuer;
c. The Trustee, on its own initiative or following a request from the Acorn D-REIT Manager, is of
the opinion that it is desirable in the interests of the Security Holders;
d. The Security Holders at a meeting-
i. of which the Authority has been provided with not less than seven days prior notice;
ii. where the Valuer has been given the opportunity to be present at the meeting and
make oral or written submissions; and
iii. after hearing the recommendations of the Trustee and the Acorn D-REIT Manager,
pass an ordinary resolution requiring the removal of the Valuer; or
e. the Valuer has contravened any provisions of the scheme documents, the Act or these
Regulations.
4.7. Details of the Project Manager Certifier

Aegis Development Solutions Limited is a Project Management and Quantity Surveying Limited Liability
Company incorporated in Kenya under the Companies Act (CAP. 486, Laws of Kenya) on 19th March, 2003.
The firm was established and is run on the vision of delivering an exemplary service to developers by
responding to the essential ingredient of effective budgetary control. We have as such to meet the challenges
of the profession in terms of accuracy, speed, thorough understanding of design and construction techniques
and an appreciation of the client’s requirements. Our cardinal rule is to ensure that our services are of the
highest quality by any standard at all times.
Page | 58
The company has been under the Directorship of Dr. Philip Muchungu since its incorporation. Aegis
Development Solutions Ltd. is registered with the Board of Registration of Architects and Quantity Surveyors
(BORAQS) Kenya, The Architectural Association of Kenya (AAK) and the Institute of Quantity Surveyors of Kenya
(IQSK).
Firm’s Experience
Aegis Development Solutions Limited has been offering the full range of Quantity Surveying services, Project
Management services as well as Financial Oversight services for over 17 years in Kenya and the region.
The firm is a dynamic and progressive company that deals in all aspects of Construction; Project Procurement,
Contract Administration, Cost Management and Control, Design and Supervision, as well as Dispute Resolution.
Under the directorship of Dr. Philip Muchungu, a seasoned Project Manager and Quantity Surveyor with over
twenty-five years’ experience, the firm boasts an experienced, competent and professional workforce of Six
registered Quantity Surveyors and one Assistant Quantity Surveyor. The Technical team has experience in all
aspects of Project Management and Quantity Surveying and has worked with some of the leading consultancy
firms both locally and abroad in very challenging capacities and projects.
Aegis has good working relations with consultants in various fields of specialization in the built environment
both locally and abroad, who it calls upon on certain project aspects which may not be satisfactorily dealt with
by our in-house team such as data management, project planning, environmental services and facilities
management. The firm’s technical resource pool gives it the capacity to handle the demands of all kinds of
projects irrespective of their magnitude and complexity in the region.
We have vast experience in and are familiar with providing Project Management Oversight Role Services which
are similar to the task as we have offered the services to a number of Clients, mainly financial institutions.
Some of the projects where we have offered these services include; construction of a Leadership Centre for
College of Insurance in South C, Nairobi, an Office Development on George Padmore Road for Jomo Kenyatta
University of Agriculture and Technology Staff Retirement Benefit Scheme and a New Office Development for
Tembuland Limited for Kenya Commercial Bank.
4.7.1. Board of Directors
Name Profile
Dr. Philip Muchungu Established the firm in 2003 and became the CEO and Managing Director.
Managing Director & CEO Philip is a specialist in Construction Project Management and Building
Economics with over 28 years’ experience in the region.
He is a registered Project Manager under the Kenya Association of

Project Managers (KAPM) and Quantity Surveyor under the Board of
Architects and Quantity Surveyors (BORAQS) Kenya.
He is also a Member of the Architectural Association of Kenya (AAK), a

Corporate Member of the Institute of Quantity Surveyors of Kenya,
(IQSK) as well as a Member of the Kenya Institute of Supplies
Management, (KISM).
He holds a Doctorate Degree (Ph.D.) in Construction Project

Management from the University of Nairobi.
Philip is a respected and self‐motivated professional, with the ability to

manage multiple projects simultaneously. He is extensively experienced
in handling large‐scale projects from
feasibility and conceptual design through to construction and handover.
Page | 59
Name Profile
His attention to detail, broad knowledge and experience in project
development has seen him develop and maintain professional
relationships with clients and all members of the team
both as a leader and expert consultant.
Anna Muthoni Gichuiri Anna joined the firm in 2003 as a Financial Analyst, Quantity Surveyor &
Director, Senior Financial Analyst Project Manager. She was appointed Director in 2004.
& Quantity Surveyor
She is a registered Quantity Surveyor and a Chartered Analyst of the CFA
Institute. She holds a Masters in Strategic Planning from the Edinburgh
Business School, Heriot-Watt University and a Masters in Construction
Management from The University of Reading (UK). She also holds a
Bachelor of Science Degree from South Bank University,
London. She is a Detail-oriented Senior Financial Analyst and Project
Manager and Quantity Surveyor.
As a strategic and analytical professional in financial reporting, analysis

and project management, and a specialist in Real Estate and Financial
sectors across Africa, she has served in leadership positions of various
boards of statutory bodies, professional associations and companies.
She has also served in various boards of corporate institutions in Kenya
and held key positions in Development Institutions including Shelter
Afrique and The Eastern and Southern African Trade and Development
Bank (now Trade Bank) managing various construction project funding
across Africa. She is also a corporate member of the Architectural
Association of Kenya (AAK) and a Corporate Member of the Institute of
Quantity Surveyors of Kenya (IQSK).
Her key competencies include the ability to structure complex

transactions, negotiations, analytical and decision-making skills, project
management and ability to work with multi-disciplinary as well as multi-
cultural teams.
Alfred Ogweno Gayo Alfred joined the firm in 2011 as a Quantity Surveyor and Project
Director Manager and was appointed Director in 2015.
He has 11 years of experience in the field and holds a Bachelor of Arts

Degree in Building Economics from the University of Nairobi. He is a
registered Quantity Surveyor under the Board of Architects and Quantity
Surveyors (BORAQS) Kenya, a Corporate Member of the Architectural
Association of Kenya (AAK) as well as a member of the Institute of
Quantity
Surveyors of Kenya, (IQSK).
He has worked in different firms since 2008 thus has an in-depth

understanding of construction, materials, pricing, and the industry at
large.
He also has the ability to manage projects from concept to completion
and this has allowed him to work extensively on a wide scope of projects
with different organizations. In the process, he has acquired broad
knowledge and experience in Project Management and Quantity
Surveying.
Page | 60
Name Profile
Diana Mukiri Mugambi Diana joined the firm in 2013 and joined the Board of Directors in 2016.
Director
She is a specialist in Construction, Project Management and Building
Economics with 14 years’ experience in the region.
She holds a Bachelor of Arts Degree in Building Economics from the

University of Nairobi and is a registered Quantity Surveyor under the
Board of Architects and Quantity Surveyors (BORAQS) Kenya, a
Corporate Member of the Architectural Association of Kenya (AAK) and
a member of the Institute of Quantity Surveyors of Kenya, (IQSK).
She is a highly professional Quantity Surveyor with experience in cost

handling and management related to construction and engineering
projects. She Possesses strong problem-solving, numerical,
communication and negotiation skills as well as solid construction and
financial knowledge to properly manage commercial and contractual
aspects of the projects.
She has worked on a scope of projects with different client organisation
and in the course of this acquired broad knowledge and experience in
project development and construction process right from feasibility and
conceptual design through to construction and handover.
4.7.2. Senior Management

Name Profile
Maurice Macharia Wambui, Maurice joined the firm as an Assistant Quantity Surveyor in 2014 and
Quantity Surveyor became a registered Quantity Surveyor in 2018 under the Board of
Architects and Quantity Surveyors (BORAQS) Kenya and holds a Bachelor
Degree in Quantity Surveying from the University of Nairobi.
He is also a Member of the Institute of Quantity Surveyors of Kenya

(IQSK).
He is a dependable and organized team player with the ability to

communicate effectively and efficiently and is skilled at building
relationships with employees across all levels of the organization.
He is highly experienced at compiling and following strict budgets and

has excellent analytical and mathematical skills to handle project costs.
His strong organizational and time management skills have been key in
ensuring timely completion of projects.
Joy Brenda Kimindu, Brenda joined the firm in 2014 as an Assistant Quantity Surveyor and
Quantity Surveyor became a registered Quantity Surveyor in 2018 under the Board of
Architects and Quantity Surveyors (BORAQS).
She is results driven, self -motivated and resourceful Quantity Surveyor

and Project Manager. She holds a Bachelor Degree in Quantity Surveying
from the University of Nairobi.
Page | 61
Name Profile
She is effective in managing all the costs relating to building and advising
clients on improvements, strategies, and/or estimated costs. Brenda has
a proven track record of minimizing the costs of a project and enhancing
value for money, while still achieving the required standards and quality.
Peter Ombati Nyamweya, Peter joined the firm as a graduate Quantity Surveyor in 2016, after
Quantity Surveyor which he became an Assistant Quantity Surveyor in 2017 and was
registered as a Quantity Surveyor in 2020 under the Board of Architects
and Quantity Surveyors (BORAQS) Kenya.
Peter has worked extensively in preparation of Preliminary Cost

Estimates and Budgeting, Preparation of Contract Documents, Reviewing
of completed reports, plans, estimates and calculations for accuracy as
well as Measurement of building designs and estimations.
He has a Degree from the University of Nairobi. Peter’s ability to ensure

a collaborative professional working relationship with the team has
created a smooth working environment both internally and externally.
Doreen Gakii Kirimi, Doreen is a graduate Quantity Surveyor with a Degree from the
Assistant Quantity Surveyor University of Nairobi.
She has Excellent communication skills and ability to develop and

maintain
professional relationships with clients. She is a fast learner, self-driven
and co-operative individual.
Her resilience has seen her assist in performing different tasks in the firm
under minimal supervision. With a very keen eye on detail, Doreen
continues to be a very resourceful member of the firm.
4.7.3. Appointment of the Project Manager Certifier

i) The Trustee, in consultation with the Acorn D-REIT Manager shall appoint a project manager certifier prior
to entering into any binding contract or a contract that can only be terminated on the payment of a penalty
and which relates to the development and construction of Real Estate.
ii) The project manager certifier appointed under Clause 27.1 shall report to the Trustee and provide copies of
all reports to the D-REIT Manager.
iii) The project manager certifier shall be-
a. a company incorporated in Kenya; or
b. a person residing in Kenya. and
c. have in place an appropriate level of professional indemnity insurance.
iv) The Trustee shall not appoint a person or company as a project manager certifier unless that person, or if a
company, its key personnel one of whom shall be nominated as the person responsible to the Trustee for
the work undertaken is a member of -
a. the Institution of Surveyors of Kenya;
b. the Architectural Association of Kenya;
c. the Institute of Quantity Surveyors of Kenya;
d. the Institution of Construction and Project Managers of Kenya; or
e. an international body recognized by an institution under subparagraph (a) to (e).
v) The project manager certifier shall, in the performance of his or its duties under this Regulation, be
independent of, and not subject to the direction or control of -
Page | 62
a. the D-REIT Manager and any property manager;

b. the structural engineer;
c. the Trustee;
d. any valuer appointed to conduct a valuation in respect of a specific property; and
e. any person from whom the Acorn D-REIT may acquire real estate assets.
vi) The project manager certifier shall have the requisite project management and quantity surveying skills and
expertise to enable the project manager certifier to-
a. monitor and report to the Trustee and the Acorn D-REIT Manager on the progress of the
development or construction work being planned or undertaken;
b. report on the cost of work undertaken or to be undertaken to complete the development or
construction;
c. monitor and report on the cost of scheduled plant and equipment to be acquired; and
d. ensure that the costs under subparagraph (27.6.3) are included in the development or
construction works budget.
vii)The Trustee may, with the consent of the lender to the Acorn D-REIT, appoint, as a project manager certifier,
a person who is qualified to be appointed as such despite the fact that the person is also acting in a similar
role for the lender to the Acorn D-REIT or in respect of the financing of development and construction works
being undertaken by the Acorn D-REIT:
a. Provided that such person shall report directly to the Trustee and the Acorn D-REIT Manager
and shall not be subject to any obligation or duty of confidentiality to the other party that has
not been waived as could result in a conflict.
viii) The project manager certifier shall monitor and submit a report to the Trustee and the Acorn D-REIT
Manager on a monthly basis on
a. whether or not the work has been completed in accordance with the budget, project plan and
payment schedule or any variations prepared by the Acorn D-REIT Manager and approved by
the Trustee;
b. whether scheduled payments should be disbursed by the Trustee to meet the work
undertaken, costs of or connected with the development or construction;
c. the costs of any proposed variation of scheduled works or proposed acquisition of plant and
equipment, and
d. the estimate of the cost and time required to complete the development and construction
work relative to the budget and project plan.
ix) The Trustee shall disburse funds as requested by the Acorn D-REIT Manager and recommended by the
project manager certifier where such payments –
a. are in accordance with the budget, project plan and payment schedule approved by the
Trustee: or
b. are varied and approved by a meeting of the Security Holders where the total cost of variation
is more than 15% percent of the budgeted costs; or
c. where the Trustee is of the opinion that disbursement is necessary to protect the REIT Assets
and the interests of Security Holders; and satisfied with the action which the D-REIT Manager
proposes to implement to rectify any problem.
Page | 63
PART 5: ACORN STUDENT ACCOMMODATION DEVELOPMENT REIT

BUSINESS OVERVIEW
5.1. Development Process overview
Changing demographics, urbanisation, income distribution, affordability of homes, and trends in the education
sector, as discussed, have created a market opportunity in student accommodation that can only be remedied
by two factors: availability and affordability. Acorn has developed products that cater for the significant
demand for student accommodation that is comparable to the developed world and also cover a range of
different price points.
In determining what to develop for the market, extensive research and analysis was done on market sizing and
affordability. Acorn engaged the services of SKP, a leading global strategy and pricing consultant, to provide
more comprehensive information on the local student market and potential demand. SKP worked with a local
Kenyan consumer research organisation, Consumer Insight, using both qualitative focus-group based research
and extensive quantitative research of almost 2,000 students. The study was carried out over three months
and is the most comprehensive survey done to date on the Kenyan student accommodation market.
The SKP study started by reviewing the current market for tertiary education and quantifying the total number
of students in the target universities (excluding colleges), which are those that would support the projects.
These are the leading private and public universities. SKP then eliminated specific demographics not relevant
to Acorn’s target market such as campuses outside of Nairobi, students not allowed to live away from home
etc. After determining the available and addressable market relevant to Acorn’s product, the next step was to
determine affordability.
Analysis on the affordability and pricing utilized a two-step approach. First, a survey was conducted on a
targeted group, students and parents of students, to determine the motives and key criteria for choosing
student accommodation. Second, SKP applied a Price Sensitivity Meter (PSM) using the Van Westendorp
methodology to the outcome of the survey. The objective of the PSM exercise was to determine the threshold
of affordability (willingness to pay). Based on the large amount of data from the survey, SKP was able to
determine a definitive price range where there was willingness to pay for the identified products. The outcome
was tested on current market prices and trends in the market and found to be very accurate.
In order to test the concept, Acorn embarked on the development of Qwetu Jogoo Road, Ruaraka and
Parklands as the pilot projects to establish the operating business. All three projects have been successful with
an occupancy rate of over 90% and have given Acorn 1,600 beds.
Once the Acorn D-REIT is established, all the development and construction activities of Acorn will be
transferred to the Acorn D-REIT.
Page | 64
5.1.1. Development process flow
Business Pre- Project Property

Origination Development
Case development Closure Operations
❖ Identify suitable ❖ Concept design ❖ Detailed design ❖ Construction ❖ Marketing ❖ Marketing

land ❖ Detailed cost ❖ Tender ❖ Marketing ❖ Leasing ❖ Leasing
❖ Due diligence estimate ❖ Debt financing ❖ Leasing ❖ Project Closure ❖ Property &
❖ Negotiate ❖ Initial statutory approval Facilities
acquisition consultations/a ❖ Final statutory management
❖ Preliminary pproval approvals ❖ Yield
Investment management
report
i. Origination: The Group’s market position has established deep networks that enable it to identify and
acquire strategic sites close to target universities at attractive prices. The Group then conducts an
extensive due diligence on the land as the Group prepares a preliminary investment report on the
project to be approved by the Acorn board.
ii. Business Case: The Group’s development management team engages the architects and consultants
to develop the project design, provide a detailed cost estimate, and expand the initial preliminary
investment report to generate a business case report to be approved by the Acorn board.
iii. Pre-Development: At this stage the design team finalises on the detail design of the project and tenders
for the contractor. The Group’s years of experience and expertise provides it with the advantage of
partnering with the best contractors, both local and international. The Group also ensures that it
obtains all relevant approvals before it commences construction. A construction tender award, a pre-
construction report is generated for approval by the Acorn board.
iv. Development: Utilizing the best contractors in the market allows the Group to finalise its
developments. The Group also incentivises its contractors to finish ahead of time. During this period,
the Group rigorously monitors the progress of its projects, anticipating and remedying factors that may
cause potential delays.
v. Project Closure: The project closes with the standard 12-month defects liability period. Within the
same period, the Group also starts leasing the rooms allowing its occupancy to stabilise at the pre-
agreed levels
vi. Property Operations: Marketing and leasing activities continue to maintain occupancy levels and
demand, and exit is also managed at this stage
5.2. Acorn-D-REIT Products Overview
5.2.1. Details of property to be acquired by Acorn D-REIT

The Acorn D-REIT will purchase Acorn’s current portfolio of projects, which are at 3 points of the development
process:
i. Project top out: USIU Rd 3, USIU Rd 4 and Hurlingham Phase 1 projects
ii. Construction start: Qwetu Chiromo Phase 1, Qejani Chiromo Phase 1, Qwetu Bogani East Phase 1 and
Qejani Bogani East Phase 1 projects
iii. Project start: The rest of Acorn’s project pipeline.
Page | 65
All subsequent projects will be acquired directly by the Acorn D-REIT.

The purchase of Acorn’s portfolio will be at market value as determined by an independent valuer.
In compliance with Section 76 (4) of the Regulations, the following properties, being the initial pipeline, that
are currently held on the books of the Promoter are proposed to be acquired by Acorn D-REIT as the Initial
Assets:
Project Details
Target
No. completion Estimated value
Property Location Beds date Target universities KES (m)
Phase I
Qwetu USIU 3 Kasarani 697 Nov-20 USIU, KU, JKUAT, PAC 1,454
Qwetu USIU 4 Kasarani 601 Apr-21 USIU, KU, JKUAT, PAC 940
Daystar, Riara, KEMU (CBD),
Qwetu Hurlingham MKU (CBD), Africa Nazarene
Hurlingham 832 Aug-21 1,150
Phase 1 (CBD), St. Paul’s (CBD),
KCA(CBD)
Catholic University, Kenya
School of Law, JKUAT (Karen
Qwetu Bogani East
Karen 528 Sept-21 Campus), Co-operative
Phase 1
University, Multimedia
438
University
Catholic University, Kenya
Qejani Bogani East
Karen 960 Sept - 21 School of Law, Co-operative 247
Phase 1
University of Kenya
UON (Main Campus), UON
(Chiromo), KEMU (CBD),
Qwetu Chiromo Riverside 837 March-22 Africa Nazarene (CBD), MKU
(CBD), St. Paul’s (CBD), KCA
652
(CBD)
652
UON (Main Campus), UON
(Chiromo), KEMU (CBD),
Qejani Chiromo Riverside 2,112 March-22 Africa Nazarene (CBD), MKU 476
(CBD), St. Paul’s (CBD), KCA
(CBD)
The projects listed above are being incorporated into the Acorn D-REIT at different stages of the development
lifecycle, as noted above. As a result, they have been de-risked to differing extents compared to pure greenfield
projects. The extent of de-risking is reflected in the discount rate that has been used to arrive at their valuations
at which they will be acquired by the Acorn D-REIT. It is clarified that the valuations will be updated following
approval by the Authority and just prior to the acquisition of the projects by the Acorn D-REIT. The valuations
for the projects are independently undertaken by Tysons Limited. As these projects have embedded value
enhancement at the point of entry into the Acorn D-REIT, they will not generate the same return profile as
subsequent greenfield projects that will be acquired by the Acorn D-REIT.
Page | 66
Phase II (Future Acquisitions from Acorn)
Daystar, Riara, KEMU (CBD), MKU (CBD),

Qwetu Hurlingham Phase 2 Hurlingham 772 Africa Nazarene (CBD), St. Paul’s (CBD),
KCA(CBD)
Catholic University, Kenya School of Law,
Qwetu Bogani East Phase 2 Karen 785 JKUAT (Karen Campus), Co-operative
University, Multimedia University
Catholic University, Kenya School of Law,
Qejani Bogani East Phase 2 Karen 1,264 JKUAT (Karen Campus), Co-operative
University, Multimedia University
Notes:
1. Phase II properties are currently held as a land bank, to be developed after completion of properties in Phase I to control t he release of beds into the local market. The
land bank will be held by Acorn and will only be sold to the D-REIT at market value at the commencement of the Phase II project, so that the D-REIT bears no holding
costs.
2. USIU - United States International University Africa; KU – Kenyatta University; JKUAT - Jomo Kenyatta University of Agriculture and Technology; KCA – Kenya College of
Accountancy
5.2.2. Qwetu Student Accommodation

The Qwetu student accommodation is the middle-income brand under the Acorn PBSA portfolio. The chart
below represents the addressable market for Qwetu as determined following the SKP study:
Qwetu Addressable Market Gap

Key Target Universities
Acorn’s Focus
❑ Nairobi University 106,000
❑ Mount Kenya University

❑ Kenyetta University
❑ St. Paul's University (2)
59,158
❑ Strathmore University
45,012
❑ Riara University
❑ Catholic University
❑ Daystar University
❑ USIU University
❑ KCA University Student at Total addressable Total addressable
Target Universities 2020 market for Qwetu 2020 market for Qwetu 2025
❑ KEMU University
❑ Africa Nazarene University
❑ Others SKP extracts Acorn Survey
(1) As per SKP Market Research

(2) 4.4% growth based on university enrollment growth CAGR 2014 – 2017
As per the chart, the method utilized to determine the market size was based on affordability, preferences,
and location and utilised a combination of qualitative and quantitative methodologies. Based on the market
sizing exercise, the addressable market was estimated at approximately 39,000 by SKP.
Acorn’s target is to achieve a conservative 35% share of this market. As at date, all the properties developed
by Acorn have been under the Qwetu brand. The eventual goal is for Qwetu to make up approximately 35% of
the total Acorn D-REIT’s PBSA portfolio.
Page | 67
5.2.2.1. Qwetu specifics and amenities
i. Premium room
ii. Single studio
Room types
iii. Twin
iv. Cluster
Safety CCTV, biometric, card access, fire safety
Washrooms Ensuite
Kitchenette Provided in room
Retail services Minimart, launderette, food stall with a food court and salon
Utility bills Individual pre-paid metering per room
Gym Provided
Study rooms Multiple rooms ranging in size provided
Wi-fi Provided
Lounge Multiple lounges with sofas provided
• 24-hour electricity with backup power
• Limited shuttle services
Other services • Lifts
• Furniture
• Borehole water
5.2.2.2. Qwetu build plan
Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Build Plans 1 2 2 3 3 4 3 4 4 4 4
(Projects)
Number of 3,003 3,319 4,151 4,213 5,078 5,297 5,250 6,058 7,638 7,900 8,690
beds under
development
5.2.3. Qejani Student Accommodation

In addition to the Qwetu brand, Acorn has also developed a mass market brand called Qejani that will be
offered at a lower price point but still provide the essential standards of quality, security and cleanliness as the
Qwetu product. The addressable market for the Acorn’s Qejani product has been ascertained using a similar
methodology on the basis of conservative assumptions:
Page | 68
Qejani Addressable Market Gap

Key Target Universities Acorn’s Focus
124,537
❑ Kenyatta University
❑ Jomo Kenyatta University of (1)
Agriculture and Technology 85,593
❑ Nairobi University 69,014
❑ Mount Kenya University

❑ KCA University
❑ St. Paul’s University
❑ Strathmore
❑ Riara Total Non-Qwetu Total addressable Total addressable
students at Target market for Qejani 2020 market for Qejani 2025
❑ Catholic University Universities 2020
❑ Kenya school of Law

❑ Daystar University
❑ KEMU University SKP extracts Acorn Survey
❑ Africa Nazarene University (1) 4.4% growth based on university enrollment growth CAGR 2014 – 2017
❑ Others
In determining the addressable market for the Qejani brand, market sizing was based on a combination of the
Qwetu SKP study, and market data on the universities that were not included in the SKP study.
The SKP study showed that there was a significant number of students at the target universities who were
unable to afford the Qwetu product. These students are the target market for Qejani. In addition, the Qejani
brand will target other private and public universities whose student rental price points are below the Qwetu
brand.
Acorn has targeted the additional universities because they have large campuses in and around the Nairobi
Metropolis, and they are close to urban centres hence the rents charged are likely to be similar to Nairobi
offerings. Other rural locations tend to charge much lower rents, which the Qwetu and Qejani products are not
designed to compete with.
Beyond 2020, the university population is assumed to grow at a slower pace, 50% of the long term historical
CAGR of 13%, i.e. 6.5% per annum.
The eventual goal is for Qejani to make up approximately 65 % of the total Acorn D-REIT’s PBSA portfolio and
to achieve a market share of 35% of this sector of the PBSA market.
5.2.3.1. Qejani specifics and amenities
i. Double room
Room types
ii. Quadruple
Safety CCTV, biometric, card access, fire safety
Washrooms Shared washrooms
Kitchenette Not provided
Retail services One large cafeteria and minimal retail (e.g. printers & convenience shop)
Utility bills Included in rent
Study rooms Large joint study room provided
Wi-fi Provided
Lounge Basic common room provided
Page | 69
• 24-hour electricity with backup power

• Limited shuttle services
Other services • Lifts
• Furniture
• Borehole water
5.2.3.2. Qejani build plan
Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
Build - 2 3 3 4 3 3 2 2 1 1
Plans
(Projects)
Number 3,072 6,744 7,404 12,912 16,584 18,360 18,360 14,688 12,852 9,180 7,344
of beds
under
developm
ent
Page | 70
5.2.4. Profile overview of the construction stage initial projects into the Acorn D-REIT
5.2.4.1. Qwetu USIU 3
Ongoing construction
Property Highlights Property Snapshot
▪ Proposed 10-storey PBSA building currently under Target Completion Q4 2020

Year
construction targeted for completion in Q4 2020.
Rooms (Target) 518
▪ Located at the junction of USIU & Mirema Roads
within Garden Estate within Nairobi City to the North Beds (Target) 697
East of Nairobi CBD. Proximity to Approximately 0.3
▪ Proposed fully furnished suites. University kilometres from the
▪ Close proximity to key services including shopping United States
malls with a proposed commercial section on the International
ground floor. University (USIU -
Africa).
▪ Proposed Amenities: Construction Status The structure is
complete with
- High speed Wi-Fi substantial
- Residents gym completion of fit out
- 24-hour security surveillance works done and
- Back-up generator delivery of FFE up to
- Constant water supply the 3rd floor level.
- Quiet study rooms
- Recreation areas
- Key card access
- Secured and controlled access
- Onsite maintenance and management teams
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5.2.4.2. Qwetu USIU 4
▪ Proposed 12-storey PBSA building currently under Target Completion Q2 2021

Year
construction targeted for completion in Q2 2021.
Rooms (Target) 450
▪ Located along USIU Road within Garden Estate within
Nairobi City to the North East of Nairobi CBD. Beds (Target) 601
▪ Proposed fully furnished suites. Proximity to Approximately 0.2
▪ Close proximity to key services including hospitals and University kilometres from the
shopping malls. United States
International
▪ Proposed Amenities: University (USIU -
Africa).
- High speed Wi-Fi Construction Status The structure is
- Residents gym currently 90%
- 24-hour security surveillance complete and the
- Back-up generator walling has been
- Constant water supply completed up to the
- Quiet study rooms 4th floor Level.
- Recreation areas
- Key card access
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5.2.4.3. Qwetu Hurlingham Phase 1
▪ Proposed 16-storey PBSA building currently under Target Completion Year Q4 2021
construction targeted for completion in Q4 2021. Rooms (Target) 583
▪ Located along Argwings Kodhek Road within Beds (Target) 832
Hurlingham Area within Nairobi City to the South
Proximity to University Approximately
West of Nairobi Central Business District.
0.3 kilometres
▪ Proposed fully furnished suites.
from Daystar
▪ Close proximity to key services including shopping University.
malls with a commercial section at the ground floor. Construction Status The reinforced
▪ Proposed Amenities: concrete
structure has
- High speed Wi-Fi been cast up to
- Residents gym 10th floor and
- 24-hour security surveillance the walling has
- Back-up generator been completed
- Constant water supply up to the 2nd
floor level.
- Quiet study rooms
- Recreation areas
- Key card access
o
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5.2.5. Profile overview of the pre-development stage initial projects into the Acorn D-REIT
5.2.5.1. Qwetu Bogani East Phase 1
Target Completion Q1 2022

▪ Proposed 5-storey PBSA building currently under the Year
pre-development phase targeted for completion in Rooms (Target) 364
Q1 2022.
Beds (Target) 528
▪ Located along Bogani East Road within Karen Area of
Nairobi City to the south of Nairobi Central Business Proximity to Approximately
District. University 0.5 kilometres
from Catholic
▪ Proposed fully furnished suites.
University.
▪ Close proximity to key services including shopping
malls with a commercial section at the ground floor.
▪ Proposed Amenities:
- High speed Wi-Fi

- Residents gym
- 24-hour security surveillance
- Back-up generator
- Constant water supply
- Quiet study rooms
- Recreation areas
- Key card access
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5.2.5.2. Qejani Bogani East Phase 1
Target Completion Q1 2022

▪ Proposed 5-storey PBSA building currently under the
Year
pre-development phase targeted for completion in
Rooms (Target) 288
Q1 2022.
▪ Located along Bogani East Road within Karen Area of Beds (Target) 960
Nairobi City to the south of Nairobi Central Business Proximity to Approximately
District. University 0.5 kilometres
▪ Proposed fully furnished suites. from Catholic
▪ Close proximity to key services including shopping University.
malls with a commercial section at the ground floor.
- High speed Wi-Fi

- Back-up generator
- One large study room
- Basic common room with durable furniture e.g.
Ramboo
- Key card access
- On-site maintenance and management teams
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5.2.5.3. Qwetu Chiromo
Target Q1 2022
▪ Proposed 16-storey PBSA building currently under Completion Year
the pre-development phase targeted for completion Rooms (Target) 574
in Q1 2022. Beds (Target) 837
▪ Located on the first and second row of Riverside Drive
Proximity to Approximately 0.5
within Chiromo Area of Nairobi to the North West of
University kilometres and 1
Nairobi Central Business District.
kilometre from
▪ Proposed fully furnished suites. University of Nairobi
▪ Close proximity to key services including shopping Chiromo and Main
malls with a commercial section at the ground floor. Campus
respectively.
- High speed Wi-Fi

- Residents gym
- Back-up generator
- Quiet study rooms
- Recreation areas
- Key card access
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5.2.5.4. Qejani Chiromo
▪ Proposed 18-storey PBSA building currently under Target Q1 2022

the pre-development phase targeted for completion Completion Year
in Q1 2022. Rooms (Target) 704
▪ Located on the first and second row of Riverside Drive Beds (Target) 2,112
within Chiromo Area of Nairobi to the North West of
Proximity to Approximately 0.5
Nairobi Central Business District.
University kilometres and 1
▪ Close proximity to key services including shopping kilometre from
malls with a commercial section at the ground floor. University of
▪ Proposed Amenities: Nairobi Chiromo
and Main Campus
- High speed Wi-Fi respectively.
- Back-up generator
- One large study room
- Basic common room with durable furniture e.g.
Ramboo
- Key card access
- On-site maintenance and management teams
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PART 6: INVESTING IN ACORN DEVELOPMENT REIT (‘ACORN D-REIT’)

6.1. Fees, Costs and Expenses
6.1.1. Estimated expenses of the Offer
Expense Total (KES'000)

Transaction advisory 16,940
Legal fees 11,400
Reporting accountant 1,653
Tax consultant fees 3,750
Trustee fees 9,612
Valuer fee 2,394
Structural engineer -
Project Manager Certifier 4,524
Placement 16,341
CMA approval fees 7,209
Registrar 2,332
Printing fees 100
Approval fee of OM (max 7.5m) 5,407
Transfer of Land 5,700
Other consultants 17,952
Marketing 1,581
MTN transfer legal expenses 3,272
Miscellaneous 2,000
112,167
Notes:
i) Costs shown are exclusive of VAT (where applicable) and may be subject to change
ii) There is a placement fee charged at 0.85% of the total amount raised
The expenses of the Offer amount to 3 % of the Offer amount or KES 0.5 per Unit.
The set-up costs of the Acorn D-REIT will be paid upfront from the initial capital raise. However, these costs
shall be recovered from investors as they buy into the scheme over time. The costs will be recovered as a
one-time charge at the time of issue, by charging the expense per Unit.
6.1.2. Expenses payable by the Trustee

The following are the estimated annual costs of running the Acorn D-REIT. These costs are subject to change
over the life of the scheme. These expenses are payable out of the REIT Assets:
Expense KES (‘000)
Trustee fees 0.30% - 0.70% Depending on the Total REIT Assets
REIT management fees:
i. Base fee 2% p.a. of the NAV based on the last audited financial
statements;
ii. Performance fees As fully described in Clause 7.1.2.1
Development management fees 4% p.a. of project costs*
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Property management fees 5% p.a. of gross revenue during the stabilization period**
Central marketing fees
i. KES 10m One-off charge per property payable over a
maximum period of fifteen (15) months
commencing six (6) months prior to the opening of
a D-REIT Property up to the third (3rd) month of
the stabilization period
ii. 1.5% of each Project Entity’s gross residential rental
revenue during the stabilization period*
Valuer fees 300 Per property
Auditor’s fees 1,500 – 9,762 During the 10-year horizon of the Acorn D-REIT
Project Management Certifier fees 600 Per month
*Project costs are calculated less cost of the land and project management fees
** The stabilization period runs for 12 months post development when it becomes eligible for exit
6.1.2.1. Performance Fees

Subject always to the fees clawback mechanism as included in the D-REIT Management Agreement, on any
Performance Fee Calculation Date, the Acorn D-REIT Manager shall be entitled to the Performance Fee based
on the Aggregate Net Proceeds received by the Acorn D-REIT in respect of the relevant Mini Portfolio.
No Performance Fee shall be payable in respect of a Mini Portfolio until the Acorn D-REIT has received the
Aggregate Relevant Investment Amount in relation to such Mini Portfolio.
Subject always to the fees clawback, any Aggregate Net Proceeds from a Mini Portfolio shall be distributed in
the following order of priority:
i. 100 per cent. to the Acorn D-REIT until the Acorn D-REIT has received an amount equal to the
Aggregate Relevant Investment Amount; then
ii. on such part of the Excess Amount as is referable to an aggregate IRR for the relevant Mini Portfolio of
at least twenty per cent. (20%) and less than 25 per cent. (25%), (a) 80 per cent. to the Acorn D-REIT,
and (b) 20 per cent. to the Acorn D-REIT Manager;
iii. on such part of the Excess Amount as is referable to an aggregate IRR for the relevant Mini Portfolio of
at least twenty-five per cent. (25%) but less than thirty per cent. (30%), (a) seventy per cent. (70%) to
the Acorn D-REIT, and (b) thirty per cent. (30%) to the Acorn D-REIT Manager; or
iv. on such part of the Excess Amount as is referable to an aggregate IRR for the relevant Mini Portfolio of
at least thirty per cent. (30%), (a) sixty-five per cent. (65%) to the Acorn D-REIT, and (b) thirty-five per
cent. (35%) to the Acorn D-REIT Manager.
Subject always to the fees escrow arrangement as included in the D-REIT Management Agreement, where a
Performance Fee becomes payable to the Acorn D-REIT Manager, it shall be paid within the 30 days following
the relevant Performance Fee Calculation Date.
Where the Acorn D-REIT Manager's appointment under the D-REIT Management Agreement has terminated
pursuant to clause 16 of that Agreement (except as set out therein) :
i. the Relevant Investments in the portfolio of the Acorn D-REIT shall be valued by the Valuer as at the
effective date of termination (the "Terminal Valuation");
ii. such Relevant Investments shall constitute, for the purposes of this Agreement, a Mini Portfolio (the
"Terminal Mini Portfolio") and shall be treated as if disposed for an amount equal to the Terminal
Valuation; and
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iii. paragraphs 4.1 to 4.5 of the Fee Schedule in the D-REIT Management Agreement shall apply to the
Terminal Mini Portfolio with the Aggregate Net Proceeds being calculated as the Terminal Valuation
less an amount of deemed disposal Expenses equal to 1% of the Aggregate Net Proceeds, or, in the
event of any dispute arising in the calculation of such amount, as determined by the Expert.
6.1.3. Statement of the Estimated MER of the REIT

This is not applicable to the Acorn D-REIT.
6.1.4. Limits on charging of fees or reimbursement of expenses

The Trustee and the Acorn D-REIT Manager have the power to deduct fees in accordance with the Regulations.
Provisions on the remuneration of the Trustee, Acorn D-REIT Manager and other service providers to the Acorn
D-REIT are set out in Part XV of the Regulations. In particular, you should note that:
a) The overheads and costs of services expected to be provided by the Acorn D-REIT Manager in its capacity
as REIT Manager shall not be charged to the Acorn D-REIT;
b) If the Trustee forms an opinion that the Fund is not in a position to pay any amount due to the D-REIT
Manager and the Trustee defers the payment of any fees payable to the D-REIT Manager, no interest shall
be payable in respect of any deferred payment.
6.2. Distribution Policy and Factors Determining Distribution
6.2.1. Distribution policy

The Trustee of the Acorn D-REIT shall, on the recommendation of the Acorn D-REIT Manager, distribute
earnings subject to the provisions of the Regulations.
6.2.2. Distribution of realized capital gains

The Regulations do not require Acorn D-REIT, being a D-REIT Scheme under the Regulations, to make annual
distributions to the Security Holders. However, the Acorn D-REIT Manager may recommend to the Trustee and
the Trustee may distribute any Realized Capital Gains to the Security Holders if and when the capital gains are
realized, provided that any such recommendation shall be made in accordance with the provisions of any
relevant Scheme Document.
The Acorn D-REIT intends to make use of the cash raised from exiting completed, stabilized projects in two
ways. For:
i) reinvestment into new schemes/projects; and
ii) majority of the income for distribution to Security Holders.
It is the Acorn D-REIT’s intention to distribute all Realized Capital Gains to Security Holders after taking into
consideration the required working capital and expenses for the Acorn D-REIT. This distribution will be subject
to the Distribution Policy as indicated in the investment policy and in Section 4.1.5.
6.2.3. Implications of failure to make distribution

Failure to make a distribution shall not result in a breach of the Act, the Regulations or the Scheme Documents,
but may result in:
i) the Acorn D-REIT ceasing to be classified as a real estate investment trust scheme for taxation purposes;
ii) subject to the Scheme Documents, the Security Holders having a cause of action against the Trustee or
the D-REIT Manager; and
iii) revocation of authorization issued to the Acorn D-REIT by the Authority under the Regulations.
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6.3. Transferability of Acorn Units, Pricing and Redemption
6.3.1. Transferability
The Units are freely transferable among Professional Investors, and the Trustee shall not impose any other
restriction on the transfer of Units. All transfers of the Units shall be subject to the Trust Deed.
Notwithstanding the foregoing, no transfer of Units shall be effective as against the Trustee or shall be in any
way binding upon the Trustee until the transfer has been recorded on the Register and no transfer of a Unit
shall be recognized unless such transfer is of a whole Unit.
6.3.2. Trading and Pricing of the Units

The Units of the Acorn D-REIT will initially be unlisted. However, the Units will be tradeable on an OTC. The
price of the Units at the time of trading will be based on the NAV of the scheme as calculated by the D-REIT
Manager.
6.3.3. Right to Redemption

The Acorn D-REIT shall have the right, but not the obligation, to offer to purchase for cancellation at any time
the whole or from time to time any part of the outstanding Units in issue, at a price per Unit and on a basis
determined by the Trustee, subject to compliance with all applicable Units laws, instruments, regulations,
rules.
The Acorn D-REIT shall have the right, but not the obligation, to offer to redeem or partially redeem without
cancellation at any time any part of the outstanding Units in issue, at a price per Unit and on a basis determined
by the Trustee, subject to compliance with all applicable Units laws, instruments, regulations and rules. In the
event of partial redemption all Units in issue must be partially redeemed to an equal extent. Any fully redeemed
Units not cancelled shall remain as unissued Units capable of being issued in future.
Security Holders shall not have the right to request the Trustee to redeem their holding of Units.
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PART 7: RISK FACTORS

7.1. Risks associated with the Acorn D-REIT
7.1.1. Land acquisition risk

Transactions involving land in Kenya are complex and sometimes risky undertakings. Although due diligence is
undertaken on each project development property at the Lands Registry, bearing in mind the poor state of the
records at land registries in Kenya and the well documented abuse of original documents (including forgeries
and multiple title allocations), we cannot guarantee that:
a) the vendors in respect of each property are the genuine proprietors of the respective properties;
b) each property is not the subject of multiple title allocations; and
c) the records obtained by our legal advisers from the Lands Registry in the course of our due diligence
are genuine and authentic or have not been forged.
Mitigating factor: Notwithstanding the above, as much due diligence as possible is conducted prior to the start
of any project and management have extensive experience of managing this risk. Part of the legal due diligence
report includes confirmations on the property title status on each project.
7.1.2. Execution risk

Property development has inherent risks such as delays from contractors and subcontractors, and delays in
procurement of construction materials.
Mitigating factors: The Group takes a number of measures to mitigate the potential for delays by, amongst
other things:
◼ Providing incentives to contractors to complete projects ahead of time;
◼ Completing 9 – 12 months of preparation at the pre-construction phase, ensuring the project is
planned to the highest degree of accuracy;
◼ Instituting processes such a lean procurement-to-pay that reduces procurement times; and
◼ Utilising a proprietary database, built over 20+ years, of over 1,000 local suppliers with comparable
pricing and delivery timelines. This ensures the Group partners with the best in the market for each
aspect of its process.
7.1.3. Construction input risk

A substantial portion of the inputs purchased by the Promoter in the construction of the properties are
imported from jurisdictions outside of Kenya. The cost of these inputs could rise in Kenya Shillings in the event
of a devaluation of the Kenya Shilling against foreign currencies. In addition, major locally sourced building
inputs are subject to price fluctuations based on prevailing local supply and demand characteristics. A rise in
the cost of imported or locally sourced construction inputs could increase the cost of development of the
properties and negatively affect the economic returns from these properties.
Mitigating factors: The Promoter has taken a number of actions to mitigate the impact of potential build cost
inflation including but not limited to:
i. Upfront agreement of a substantial proportion of the construction cost through the award of a fixed
price Kenya Shilling construction tender which represents approximately 50% of the total project
development costs.
ii. Project costs and revenues take into account inflation benchmarked escalations year on year to
mitigate any issues that may affect the project due to inflation Risk
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7.1.4. Operational risk

Financial loss can be due to lack of adequate human capital, systems, and internal controls, and is a significant
risk to the business.
◼ Human capital –staff who don’t have the requisite experience and expertise can present risks to the
operations of the business;
◼ Systems – All organisations rely heavily on information technology and failures can result in losses for
the business, both in terms of downtime and fraud; and
◼ Internal Controls – lack of proper procedures can create a conducive environment for fraud
Mitigating factors: The Group has put in place a number of measures to mitigate operational risks including
but not limited to:
i. Detailed operational procedures across all the functions;
ii. Instituting a strong culture of continuous improvement through the implementation of Lean Six Sigma
to improve, streamline and standardise operations across the business; and
iii. Utilizing advanced IT systems to provide optimal support for the business which are periodically
reviewed to ensure the needs of the business are continuously met.
7.1.5. Interest rate risk

An increase in the yields on Kenya Treasury bonds may affect the cost of the Promoter’s debt. An Increase in
the cost of the Promoter’s debt will in turn affect the overall cost of developing the Projects and could affect
the ability of the Promoter to service its obligations.
Mitigating factors: The Promoter Intends to schedule drawdowns to effectively manage Project cash flows and
reduce negative carry and has the ability to draw additional equity from its parent company to fund project
costs should debt costs become prohibitive
In addition, the project developments are based on a scheduled drawdown to better manage the cash flow of
each project and negative carry. Finally, borrowings shall not exceed, in aggregate, at the time the liability is
incurred, 60% of the total asset value.
7.1.6. Project exit risk

It is anticipated that the exit of the properties from the Acorn D-REIT will be through the sale to the Acorn I-
REIT. The forecast exit values are based on currently prevailing market conditions and precedent transactions
in the local real estate sector as well as the international markets which may differ to market conditions at the
time of exiting the projects. Should market conditions deteriorate, the Promoter may not be able to exit the
Projects at the anticipated valuations.
Mitigating factors: Acorn has more than a 10-year track record of successful property exits. However, the
Group also takes a number of steps to ensure that its forecast valuations are accurate in order to mitigate the
risks that targeted exit values will not be met, including but not limited to:
i. Conducting annual valuations of all the property assets. Valuations are done on a DCF and market rent
basis to ensure that despite the minimal availability of local market information on PBSA and real
estate products specifically targeted at the youth population, a relevant market value is arrived at; and
ii. Maintaining conservative internal valuations in relation to local and international benchmarks.
7.1.7. Concentration risk

The Promoter’s development activities are focused in Nairobi with no immediate plans to expand outside the
city. The Promoter’s financial performance is therefore affected in particular by changes in regulations and
legislation implemented by the County Government of Nairobi as well as by general microeconomic conditions
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within Nairobi. A deterioration in the regulatory, legislative or economic environment in Nairobi may therefore
affect the performance of the Promoter.
Mitigating factor: The Group is the first institution to actively invest in property assets specifically aimed at the
youth market. Despite this, there is a massive gap between demand and supply for this target market, and
more so in the PBSA segment. The total number of available beds across the country is approximately c.280,000
against a requirement of 600,000. In addition, the Group’s 4 existing properties achieved over 90% occupancy
within 15 months of operation, with the last of these taking less than 6 months, which highlights the strong
demand for the products.
Nairobi’s economy remains robust in a Kenyan context and Acorn maintains relationships with the relevant
regulatory agencies in Nairobi, built over a 20 year operating history, to ensure compliance with all relevant
regulations and a good understanding of the prevailing regulatory climate.
7.1.8. Investment risk

The Promoters’ ability to evaluate, purchase, construct, and operate properties has to fit within parameters
that satisfy market demand. PBSA is a fairly new asset class with no historical financial performance for
investors to benchmark against. In addition, performance is dependent on the quality of the investment
decision and ability for the organisation to execute on investment decisions.
Mitigating factors: The Promoter institutes a pre-construction phase consisting of due diligence, reviews, and
board reports that are reviewed, discussed, and approved prior to the acquisition of land, and construction. In
addition, all the Group’s future sites are located in close proximity to universities.
The Group has already established a track record of robust investment decisions throughout its history,
including its 3 operating PBSA properties, Jogoo Road, Ruaraka and Parklands, which have all achieved over
90% occupancy. These occupancy benchmarks are not seen in advanced markets such as South Africa. JLL’s
report on PBSA in Africa highlights that a typical PBSA property in South Africa achieves 90% occupancy after
36 months on average vs. within 6-15 months for the Group’s properties to date. However, past investment
returns are not necessarily indicative of future returns on projects currently under development.
The SKP report also details the huge market demand for PBSA in Kenya which is largely underserved in Kenya.
The Promoters’ ability to evaluate, purchase, construct, and operate properties has to fit within parameters
that satisfy market demand for student accommodation.
7.1.9. Foreign exchange risk

The Promoters’ development activities and proposed pipeline investments include the procurement of some
client-supplied items such as furniture and fittings (FFE) denominated in foreign currencies. Fluctuations in
foreign exchange rates notably as result of a devaluation of the Kenya Shilling could have an impact on the cost
of these inputs and increase the cost of development of the properties and negatively affect the economic
returns from these properties
Mitigating factors: The Group has put in place a number of measures to mitigate foreign exchange risks
including but not limited to:
i. Upfront agreement of a substantial proportion of the construction cost through the award of a fixed
price Kenya Shilling construction tender;
ii. Maintenance of USD deposit accounts through which such supplies are paid eliminating the need for
conversion on the due date.
7.1.10. Credit risk

In the event of default in the obligations to the Green Bond noteholders, there is a risk of an enforcement
notice being issued against Acorn Project (Two) LLP.
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Mitigating factors: The terms of the Green Bond do not change even with the transfer of the partnership
interests in Acorn Project (Two) LLP to the D-REIT and any default risk is mitigated by:
i. A 3-month interest DSRA in favour of the Green Bond Trustee;
ii. A guarantee from GuarantCo covering 50% of principal and interest; and
iii. A corporate guarantee from AHL
7.2. Country and industry risk factors
7.2.1. Country macroeconomic environment and political

The Promoter operates in Kenya. Kenya’s economy is one of the more stable, developed and diversified
economies in the region. It is nevertheless undergoing rapid economic development and political
transformation. These factors can result in political and policy changes which could affect such matters as
economic growth, currency stability and macroeconomic fundamentals.
A severe economic downturn in Kenya may lead to a reduction in demand for student housing and/or
defaulting or late payment of rent on the part of one or more tenants. In addition, a deterioration in the
political climate could lead to losses as a result of civil strife.
Mitigating factor: Given the history of the country, Kenya has managed to retain a relatively favourable
macroeconomic environment which remains one of the more stable, developed and diversified economies in
the region. Additionally, the Trustee and the Acorn D-REIT Manager will ensure that all properties have
adequate insurance policies against potential damages related to civil strife caused by a deterioration in the
political environment.
7.2.2. Changes in the regulatory and taxation environment

Kenya’s central and county governments impose regulatory and tax requirements on entities that are in the
real estate sector. Current taxes include but are not limited to:
i. Stamp duties payable to the central government;
ii. Capital gains taxation on the sale of properties payable to the central government;
iii. Land rates payable to county governments; and
iv. Corporate income tax
Regulatory requirements include but are not limited to:
i. Environmental regulations imposed by the National Environmental Management Agency (“NEMA) and
the Water Resources Management Authority (“WARMA”);
ii. Building regulations imposed by the county governments;
These legal and regulatory requirements continue to evolve as the Government develops and implements tax
raising policies. Such changes to laws, regulations or government policies or practices could cause the Acorn
D-REIT and the projects it holds to incur additional costs or liabilities or implement business practices that could
directly or indirectly reduce cashflows of the Promoter and the Investee LLPs products and in turn adversely
affect its business.
Mitigating factor: The Promoter recognises the important role it plays in the real estate sector, as a taxpayer
and an agent for collection of indirect taxes, and actively engages with the relevant government bodies directly.
The engagement is geared towards reducing the impact of drastic increases in taxes and to mitigate against
unfavourable fiscal policies which would make the real estate sector unattractive. Kenya’s REIT legislation and
the tax advantages it provides have been recently introduced and as such are not expected to be reversed or
removed.
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7.2.3. Health and safety

The Promoter’s operations are subject to various health and safety risks, particularly in relation to construction
operations and particularly carry the risk of injury. On-site injuries may lead to legal action being taken against
it and resulting in claims that could affect the ability of the Promoter to maintain its operations and service its
obligations.
Mitigating factors: In addition to taking a number of measures to mitigate the risk to staff and members of the
public as below, the Promoter ensures that they take adequate workplace injury policies that can alleviate any
potential risks from injuries at the workplace.
i. Maintaining compliance with all relevant Kenyan laws and regulations;
ii. Conducting regular safety inspections and audits;
iii. Providing high quality safety equipment to Group employees and external service providers;
iv. Maintaining high on-site safety standards through training of Group employees and external service
providers; and
v. Adhering to international Environmental, Health and Safety standards, including IFC EDGE5
accreditation.
7.2.4. Increased competition

Increased competition and oversupply in student accommodation may cause loss of market share or reduce
the Promoter’s profitability and cash flows through reducing occupancy or rents at its properties, which could
adversely affect its financial performance.
Mitigating factor: In addition to its natural first-mover advantage, the Promoter has taken a number of steps
to mitigate risks posed by competition, including but not limited to:
i. Acquiring prime sites closest to target universities to develop its projects;
ii. Cost optimisation through economies of scale and innovation;
iii. Constant monitoring of the market environment to identify potential competitors;
iv. Maintaining a target limit of only 35% of the total addressable market for the Group’s products to allow
space for competitors; and
v. Maintaining rental rates in-line with the market to ensure occupancy growth.
To the best knowledge of the Promoter, as of the date of this Offering Memorandum, the Group is the only
entity with operational PBSA properties in Kenya. While competitors have expressed interest in the space, it
still remains to be seen how soon they will break ground.
The Group already has 3 operational properties which achieved over 90% occupancy, highlighting the strong
demand and need for the Group’s products. Valuable information has been garnered over the last four years
of operation within the PBSA space and this knowledge is constantly being reviewed and applied to improve
all current and new operations.
In addition, there continues to be a large gap between demand and supply of PBSA in the market. The total
number of available beds across the country is approximately c.280,000 against the total number to university
students of approximately 600,000.
Mitigating factor: At the moment, the Promoter is the only entity focused on the construction of PBSA in Kenya.
The Promoter does not expect significant competition in this segment in the near term.
5 https://www.edgebuildings.com/
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7.3. Risks associated with investing in REITs
7.3.1. Liquidity risk

While the Units will be tradable on an OTC, there is no guarantee that a highly liquid market for the Units will
develop and remain strong. Likewise, the trading of the Units will be limited to Professional Investors, most of
whom will likely have a long-term investment horizon.
7.3.2. Risks associated with pricing

The price obtainable on sale of a Unit on the OTC can go up or down and may differ from the reported net
asset value per Unit. The price of the Units will generally reflect prospective investors’ confidence in Kenya’s
economy, the property market and its returns, the D-REIT management and interest rates.
7.4. Risks associated with pandemic
7.4.1. Enrolment risk

Student enrolments are not expected to decrease. However, certain universities might decide to offer online
courses. As a result, students can study from their homes without the need to relocate to university cities.
However, universities in Kenya are expected to open in January 2021 and offer physical courses. Hence, we
expect limited impact on the Kenyan student accommodation sector.
7.4.2. Demand Preferences risk

Student preferences might change due to Covid-19 prioritizing health and safety. They might prefer staying in
their family homes over student accommodation. Students prefer to study at their own accommodation
instead of staying at their parents' home since the family home is not an ideal learning environment due to
distractions. This is compounded by poor electricity supply across Kenya and broadband Internet being
inaccessible in many areas and weak in others. Students and young adults are social beings who want to
experience university life, which includes staying away from parent supervision.
7.4.3. Health & Safety risk

Parents and students will have concerns about health and safety standards in student accommodation
properties and this might therefore impact occupancy levels. Public Health Authorities have set stringent
guidelines for the reopening of universities and accommodation, which are likely to be in place for 12-18
months. So, it is expected that there will be a severe shortage of Student Accommodation in the short to
medium term. Acorn implemented all the guidelines and all its properties were approved by the Public
Health Authorities for reopening in June 2020.
7.4.4. Valuation risk

Real estate valuation might be affected due to lower NOI and higher cap rates. Valuations should be based on
normalized conditions assuming willing buyers & sellers. The current situation is temporary since we do not
expect structural changes in demand and supply of student housing due to Covid-19. Hence, we do not expect
valuers to markdown valuations based on outliers in terms of current NOI and liquidity.
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PART 8: SUMMARY OF THE TRUST DEED AND SCHEME DOCUMENTS
8.1. Summary of Key Aspects of the Trust Deed
Item Key Aspects

Roles, • Trustee’s roles, responsibilities and obligations are covered in Section 4.5
responsibilities and • REIT Manager’s roles, responsibilities and obligations are covered in Section 4.3
obligations of the
• Valuer’s roles, responsibilities and obligations are covered in Section 4.6
Trustee, REIT
Manager, Valuer, • Technical Engineer roles, responsibilities and obligations are covered in Section
Technical Engineer 4.7
and auditor • The Auditor’s role is to conclude an annual audit on the financial statements and
reporting practices of the Acorn D-REIT and to report back to the Trustee on the
accuracy of the financial reports and the adequacy of internal controls of the
Acorn D-REIT.
Liability of the REIT The Acorn D-REIT Manager shall not be liable for any loss, damage or depreciation
Manager in the value of the Fund or of any investment comprised therein or the income
therefrom which may arise by reason of depreciation of the market value of the Real
Estate and other assets in which the Fund is invested unless such loss, damage or
depreciation in the value of The Fund arises from negligence whether professional
or otherwise, wilful default or fraud by the Acorn D-REIT Manager or any of its
agents, employees or associates.
The limitation of the Acorn D-REIT Manager’s liability shall not extend to:
o any failure by the Acorn D-REIT Manager to exercise due care and
diligence in the discharge of its functions in respect of the Acorn D-REIT;
and
o any loss, damage or depreciation in the market value of the REIT Assets
where such loss, damage or depreciation arises from:
▪ a breach of fiduciary duties or obligations by the Acorn D-REIT
Manager;
▪ failure to exercise due care and diligence in the discharge of its
functions;
▪ negligence whether professional or otherwise; or
▪ willful default by the Acorn D-REIT Manager or its agents,
employees or associates.
Liability of the The Trustee shall be entitled to limit its liability for any borrowing to the REIT Assets
Trustee and subject to the provisions of the Act, Regulations and the Law relating to trusts
and Trustees shall be entitled to be indemnified out of the REIT Assets for all losses,
expenses, fee, and charges incurred in the performance of its duties and obligations.
The limitation of the Trustee’s liability shall not extend to any failure by the Trustee
to exercise due care and diligence in the discharge of its functions in respect of the
Acorn D-REIT.
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Item Key Aspects

Trustee’s powers • The Trustee has power to appoint Valuers, lawyers, accountants and other
professionals for the purpose of permitting it to carry out its duties and perform
its obligations and shall charge the fees, cost and expenses of such as a
Recoverable Expense to the Acorn D-REIT.
• All legal proceedings which may be instituted by or against the Acorn D-REIT shall
be instituted by or against the Trustee in its capacity as such.
• The Trustee shall have the power and be capable of instituting, prosecuting,
intervening in or defending any legal proceedings of whatsoever nature relating
to or concerning the Acorn D-REIT or its affairs and as a prerequisite to such
action, to require the Acorn D-REIT Manager to indemnify it against all costs and
expenses thereby incurred.
• The Trustee shall have all powers necessary to protect the interests of Security
Holders in terms of the Act, the Regulations and the Trust Deed shall have all
powers necessary to protect the interests of the Security Holders.
• The Trustee shall maintain custody, hold and protect all the assets of the real
estate investment trust.
• The Trustee shall protect the interests of the real estate investment trust in any
asset.
• The Trustee shall act as the D-REIT Manager on a temporary basis in any period
where there is no other D-REIT Manager until a new D-REIT Manager is
appointed.
• The Trustee shall supervise the activities of the Acorn D-REIT Manager to ensure
that they comply with the terms of the Scheme documents, the Act and the
Regulations.
• The Trustee shall not delegate to the Acorn D-REIT Manager except if appointed
by the Authority as a secondary disposition Trustee or to any other person not
being an officer or employee of the Trustee any function of or involving the
supervision of the Acorn D-REIT Manager or the custody or control of the REIT
Assets.
• The Trustee shall act in the best interests of the Security Holders and if there is a
conflict between the interests of the Trustee (or any member of the Trustee
group) and those of any Security Holder (other than any member of the Trustee
group), then the Trustee shall give priority and preference to the interest of the
Security Holders.
• The Trustee shall not make use of confidential information acquired when acting
as the Trustee to gain improper benefit for self or cause detriment to a Security
Holder.
• The Trustee shall act in accordance with the instructions of the Acorn D-REIT
Manager provided that the instructions are in accordance with the terms of the
Trust Deed and any Scheme Document, in accordance with the provisions of the
Act or the Regulations and the law relating to trusts and Trustees and in the
Trustee’s opinion is in the best interests of the Security Holders.
Appointment, • The Trustee may resign by giving three months’ notice in writing to that effect to
retirement, removal the Acorn D-REIT Manager and the Authority, provided that the resignation will
and replacement of not be effective until another eligible person is appointed as Trustee in its place.
the Trustee – Reg. • Upon the receipt of such notice from the Trustee, the Acorn D-REIT Manager
51, shall, in consultation with the Trustee, use its best endeavours to appoint within
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Item Key Aspects

two months after the date of such notice, some other qualified person as the new
trustee and such trustee shall be bound by the provisions of the Trust Deed, any
Scheme Documents, the Act and the Regulations.
• The Trustee shall be removed by the Acorn D-REIT Manager in writing
immediately if a court of competent jurisdiction orders its liquidation (except a
voluntary liquidation for the purpose of reconstruction or amalgamation under a
scheme approved by the Authority.), a manager or a receiver is appointed over
any of its assets or the Trustee ceases to qualify being a Trustee under the Act or
the Regulations
• The Trustee shall be removed by three months’ notice in writing given to the
Trustee by the Acorn D-REIT Manager with the approval of the Authority if the
Trustee fails or neglects after reasonable notice from the Acorn D-REIT Manager
to carry out or satisfy any duty imposed on the Trustee in accordance to the Trust
Deed, the Scheme Documents and/or the Act or the Security Holders, by Special
Resolution resolve that such notice be given.
• The rights, obligations and liabilities and any causes of action by or against an
outgoing Trustee which arose or accrued before the retirement or removal of the
outgoing Trustee will continue to subsist after the retirement and/or removal of
such Trustee.
• Notwithstanding its retirement or removal, a trustee may require an outgoing or
prior trustee to assist and join in any subsequent action by a trustee or the
Authority on behalf of Security Holders against any party.
Appointment, The Acorn D-REIT will at all times be managed and administered by a D-REIT
retirement, removal Manager licensed by the Authority as a REIT Manager and appointed by the Trustee
and replacement of as a contractor in a fiduciary capacity to fulfil the role of the D-REIT Manager as set
the REIT Manager – out in the Act, the Regulations and the Trust Deed and to fulfil the objectives of the
Regulation 54,61 Acorn D-REIT.
The D-REIT Manager will cease to manage the Acorn D-REIT under the following
circumstances;
• If a court of competent jurisdiction makes an order for the liquidation of the
D-REIT Manager except for voluntary liquidation for the purpose of
reconstruction or amalgamation upon terms previously approved in writing
by the Trustee and the Authority;
• If a receiver is appointed for the undertaking of the D-REIT Manager's
assets or any part thereof;
• the D-REIT Manager ceases to be eligible for appointment under
Regulation 55;
• if a court of competent jurisdiction makes an order for the liquidation of
the holding company of the D-REIT Manager or a receiver is appointed
over the undertaking and/or assets (or any part thereof) of any holding
company of the D-REIT Manager;
• the D-REIT Manager or the Promoter has been negligent in performing its
duties or otherwise breaches the terms of a Scheme Document;
• the D-REIT Manager has committed a fraudulent act or an act of willful
misconduct in the performance of its duties, or the Promoter has been
grossly negligent in connection with this Offering Memorandum relating to
the Initial Offer;
• If for any good reason the Trustee is of the opinion and so states in writing
to the Authority that a change of the D-REIT Manager is desirable in the
interest of the Security Holders;
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Item Key Aspects

• Security Holders request the Trustee to convene a meeting of Security
Holders for purposes of approving the removal of the Acorn D-REIT
Manager;
• if the D-REIT Manager or an Associated Person of the Acorn D-REIT Manager
is convicted of an offence or is found criminally liable for any breach of any
Anti-Bribery and Tax Evasion Laws, or becomes sanctioned by any
governmental, administrative or regulatory body regarding any offence
under any Anti-Bribery and Tax Evasion Laws;
• if the D-REIT Manager or an Associated Person of the Acorn D-REIT Manager
fails to comply with PIDG OPPs, the PIDG Investment Policy or the PIDG HSES
Standards and Policies where such failure, in the opinion of the Anchor
Investor, is material, repeated or cannot be remedied;
• if the I-REIT Manager is in breach of the above provisions on Anti-Bribery
and Tax Evasion Laws and PIDG provisions in relation to the Acorn I-REIT;
• If the Anchor Investor requires the Trustee to remove the D-REIT Manager
on the following grounds (such removal shall not require the prior approval
of the Authority or Security Holders unless required by the Regulations):
▪ the Acorn D-REIT Manager or the Promoter has been negligent in
performing its duties or otherwise breaches the terms of a Scheme
Document (including, for the avoidance of doubt, a HSES Breach);
▪ the Acorn D-REIT Manager commits a fraudulent act or an act of
willful misconduct in the performance of its duties, or the Promoter
has committed a fraudulent act or been grossly negligent in
connection with the Offering Memorandum relating to the Initial
Offer;
▪ a Serious HSES Incident occurs in connection with any REIT Asset
due to a failure to comply with the HSES Requirements, subject,
where applicable to a cure period of fifteen (15) days;
▪ if the Acorn D-REIT Manager or an Associated Person of the Acorn
D-REIT Manager is convicted of an offence or is found criminally
liable for any breach of any Anti-Bribery and Tax Evasion Laws, or
becomes sanctioned by any Governmental Authority regarding any
offence under any Anti-Bribery and Tax Evasion Laws;
▪ if the Acorn D-REIT Manager or an Associated Person of the Acorn
D-REIT Manager fails to comply with PIDG OPPs, the PIDG
Investment Policy or the PIDG HSES Standards and Policies where
such failure, in the opinion of the Anchor Investor, is material,
repeated or cannot be remedied;
• if any event happens that would be grounds for removal of the

Acorn I-REIT Manager breaches occurs.
Appointment of The Trustee in consultation with the D-REIT Manager, shall, if required, appoint a
structural Engineer – structural engineer and ensure that the Trustee has access at all times to the
Reg. 62 appointed structural engineer
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Item Key Aspects

Appointment of The Trustee in consultation with the Acorn D-REIT Manager shall appoint a Valuer
valuers – Reg. 111 to value the real estate assets which have been vested in the trust or acquired or
are proposed to be acquired by Trustee.
Appointment of an The Trustee shall appoint an auditor and ensure that audits are undertaken as
auditor – Reg. 97 required by the Act and the Regulations and as necessary to protect the interests of
Security Holders.
Valuation – Reg. 111 The Trustee shall observe a valuation of the real assets of the trust to be conducted
and ensure that assets of the trust are appropriately valued:
• prior to acquisition or disposal of any asset;
• prior to the initial issue or offer of any Units;
• on an annual basis or shorter period as is necessary to enable the Trustee and
or the Acorn D-REIT Manager to prepare the reports required to be prepared
under the Trust Deed, the act or the Regulations or to fulfill its obligations as
Trustee;
• If the Auditor or the Security Holders request; and
• at any other time, if the Trustee or the Acorn D-REIT Manager or the Auditor is
out of the opinion that is desirable in the interests of the Security Holders that a
valuation be conducted or that there has been a material change that may result
in the then current valuation being incorrect.
•
The Valuer shall be appointed for a term of not more than three years and, except
with the prior approval of the Authority, may not be reappointed as Valuer of the
Acorn D-REIT REIT at the conclusion of such term or until lapse of three years from
the date of expiry of any prior term.
Unless a specialist Valuer is appointed, the Acorn D-REIT Manager shall value cash,
bank deposits, bonds, other assets of a similar type and listed securities on a daily
basis and report to the Trustee at the conclusion of each working day and provide
the Trustee with details of such valuations so as to enable the Trustee to fulfil its
obligations under the Act and the Regulations.
Meetings, reports The obligation to call meetings and the rights of Security Holders to call meetings
and financial are covered in Clause 33 of the Trust Deed. In summary:
statements The Trustee shall convene an annual meeting of the Security Holders within three
months after the relevant accounting reference date of the Acorn D-REIT.
A written notice of not less than 21 days, inclusive of the date in which the notice is
deemed to be served, and the day of the meeting, shall be given to the Security
Holders of the general meeting. This provision shall not apply to the notice of an
adjourned meeting.
The Trustee, the Acorn D-REIT Manager or Security Holders, as the case may be, may
convene an extraordinary meeting of Security Holders at any time but not later than
six weeks after receipt of a requisition. A requisition shall-:
• State the objects of the meeting;
• be dated;
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Item Key Aspects

• be signed Security Holders who, at that date, are registered as the Security
Holders representing at least ten percent (10%) of the Units issued at the date of
the calling of the meeting; and
• be delivered to the Acorn D-REIT Manager.
The quorum of the meeting shall be the holders of at least ten percent (10%) of
the Units issued at the date of the calling of the meeting present in person or by
proxy except in the case of a meeting to pass a Special Resolution in such case
the quorum shall be a minimum of Security Holders present in person or by proxy
representing the holders of at least twenty five percent of the Units issued at the
date of the calling of the meeting.
Security Holders have the right to receive reports and financial statements of the
Acorn D-REIT.
The key items requiring a vote are listed below.
Items that require a • Issuing of a notice of removal to the Trustee under Regulation 52(9)
vote of Security (c)(i);
Holders • approving of the appointment of a replacement trustee under
Regulation 52(9) (c)(ii);
• approving the making of an application to the Court for the
appointment of a replacement trustee or temporary trustee;
• approving the appointment and terms of the appointment of a company
to self -manage the Acorn D-REIT under Regulation 54 (5);
• approving the appointment and the terms of the appointment of a REIT
Manager managing more than one Scheme;
• approving an increase in fees or in the method of calculating the fees
charged by the Acorn D-REIT Manager under Regulation 93 (5);
• approving the appointment or reappointment of the Acorn D-REIT
Manager;
• removing an Auditor under Regulation 98;
• approving of the Acorn D-REIT entering into any binding contract or any
agreement that can only be terminated on the payment of
consideration or of a penalty if the total consideration for the proposed
acquisition from or disposal to a person who is not the Promoter or
Connected Person represents more than fifteen percent of the latest
published Net Asset Value of the Acorn D-REIT;
• approving the Acorn D-REIT’s intention to dispose any real estate assets
that can only be terminated on the payment of consideration or of a
penalty if the total consideration for proposed acquisition from or
disposal transaction to the Promoter or a Connected Person represents
more than five percent of the latest published Net Asset Value of the
Acorn D-REIT;
• removing the Valuer;
• requesting for the valuation of the real estate assets of the Acorn D-REIT
and any other REIT Assets;
• approving the entry of a contract for goods or services, other than those
for which a fee is charged by the Trustee under Regulation 90 or by the
Acorn D-REIT Manager under Regulation 91 with a Connected Party,
unless the goods and services are to be provided pursuant to a
transparent open bidding process, if the proposed cost of the goods and
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Item Key Aspects

services when aggregated with all other transactions conducted with
Connected Persons relating to the provision of goods and services
immediately preceding twelve months exceeds or would exceed fifteen
percent of the amount spent on Connected Party provided goods and
services;
• approving the disbursement of funds as requested by the Acorn D-REIT
Manager and recommended by the Project Manager Certifier where
such payments are varied and the total cost of variation is more than
fifteen percent of the budgeted costs;
• approving the Trustee to invest up to a maximum of ten percent of the
Total Asset Value in a wholly owned and controlled company carrying
out real estate related activities including—
• property management;
• REIT management;
• property maintenance or design or the provision of services to tenants
or to the Acorn D-REIT;
• the provision of services to tenants or to the Acorn D-REIT;
• Approving the acquisition of real estate at a price which exceeds the
price in the valuation report by more than ten percent;
• Approving the disposal of real estate at a price lower than ninety
percent of the value assessed in the valuation report;
• Approving the entry into a contract for the disposal of an asset where
such disposal exceed fifty percent of the Total Asset Value unless the
disposal of an asset is for the purpose of terminating or winding up of
the Acorn D-REIT;
• Authorizing the Trustee to borrow or enter into a financing arrangement
up to a maximum of seventy five percent of the Total Asset Value for a
temporary purpose for a term not exceeding six months;
• approving a lower level of distribution than that recommended by the
Acorn D-REIT Manager where the Trustee is of the opinion that the level
of distribution recommended by the REIT Manager is not in the interests
of Securities Holders.
• Approving the Acorn D-REIT Manager’s recommendation to appoint a
new Trustee in the event of a Voluntary Resignation by the Trustee
under Regulation 51 (4);
• Approving the removal and replacement of the Trustee where the
removal and replacement of the Trustee is not pursuant to an order of
the Court or approval of the Authority;
• Approving the removal and replacement of the Trustee in any other
circumstances;
• Approving the alteration of the Scheme Documents;
• approving the conversion of the Acorn D-REIT into an I-REIT;
• approving the conversion of the Acorn D-REIT from a restricted REIT to
an unrestricted REIT.
• Where an investment in real estate has not been completed of the
period specified under Regulation 76:
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Item Key Aspects

• determining whether the period for registration should be extended
and the period of extension; or
• all monies paid into the fund together with any interest or earnings
should be refunded within fourteen days of the date of the meeting;
and
• what other action should be taken by the Trustee or REIT Manager
Security Holders’ Each Security Holder is entitled to vote at an annual and/or extraordinary general
rights, limitations meeting. Votes may be given either personally or by proxy and the voting rights
and decisions or attached to each shall be such proportion of the voting rights attached to all of the
actions requiring Units in Issue.
approval Actions requiring Security Holders’ approval include;
• Subdivision or consolidation of Units;
• Amendment to the Trust Deed and Scheme Documents not excluded under
Clause - of the Trust Deed
The Trust Deed specifies that only Independent Security Holders are entitled to
vote as follows:
• a Continuation Resolution may only be approved as an Ordinary
Resolution of the Independent Security Holders;
• Where a Continuation Resolution is not passed, a Proposal may only be
approved by Independent Security Holders by way of a Special Resolution;
• Removal of the Acorn D-REIT Manager for breaches of Anti-Bribery and Tax
Evasion Laws requires an ordinary Resolution of Independent Security
Holders.
Security Holders are not entitled to vote on the removal of the Acorn I-REIT
Manager where the Anchor Investor instructs the Trustee to remove the Acorn I-
REIT Manager as set out above.
Connected persons – The Acorn D-REIT Manager shall conduct all transactions, including future
Reg. 58, 118 acquisitions and transactions with Connected Persons, at an arm’s length and in an
open and transparent manner.
All Connected Party transactions shall be conducted on terms no less favourable
than standard commercial terms and shall be subject to the prior approval of the
Corporate Governance Committee, the Trustee and where required by the Act, the
Regulations or Scheme Documentation by the Security Holders.
Maximum fees and No fees to be payable by the prospective investors to purchase the Units. All fees on
charges payable by transfers shall be subject to the rules of the CDSC.
prospective
investors
Termination and The circumstances in which the Acorn D-REIT may be wound up are:
winding up of the • by order of the court;
REIT Scheme – Reg.
21,22,23 • if a Special Resolution is passed to that effect;
• if none of the Proposals made under Clause 4.4 of the Trust Deed are
approved as set out therein; or
• if an event occurs, on the occurrence of which a Scheme document provides
that the Acorn D-REIT is to be wound up.
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Item Key Aspects

REIT Manager’s The Acorn D-REIT Manager shall be remunerated in the amount and on the basis set
costs, fees and out in the D-REIT Management Agreement and shall be reimbursed for the
expenses -Reg. 91 Recoverable Expenses.
No special priority, as compared against payment of other service providers, will be
accorded to the payment of Acorn D-REIT Manager’s remuneration and Recoverable
Expenses.
neither the compensation of the Acorn D-REIT Manager nor any other material term
of its appointment shall be subject to a reassessment until at least the sixth (6 th)
anniversary of the date of the D-REIT Management Agreement;
In addition to the fees set out in the D-REIT Management Agreement, the Acorn D-
REIT shall pay to the Acorn D-REIT Manager all VAT that is due in respect thereof;
To the extent that the Acorn D-REIT costs are subject to any variation, the fees set
out in the D-REIT Management Agreement shall be adjusted to reflect such
variation;
Where the Trustee is of the opinion that any proposed material increase in fees or
change in the method of calculating the fees charged by the Acorn D-REIT Manager
is not fair and reasonable, the Trustee shall convene a meeting of the Security
Holders.
Duties of the REIT • carry out the administration of the REIT Assets including the management
Manager – Reg. 56 of the portfolio of investments in accordance with the direction and the
authority of the Trustee, as well as the provisions of this Trust Deed and the
Act;
• advise the Trustee on the asset classes which are available for investment;
• formulate a prudent Investment Policy;
• Invest the Fund in accordance with the Investment Policy;
• reinvest any income of the Acorn D-REIT which is not required for
immediate payments;
• ensure that the Units are priced in accordance with the provisions of this
Trust Deed, the Regulations and the Act;
• not issue any Units otherwise than on the terms and at a price calculated in
accordance with the provisions of this Trust Deed, the Regulations and the
Act;
• rectify any breach of matters relating to incorrect pricing of Units or to the
late payment in respect of the issue or redemption of Units. This may
involve the reimbursement or payment or arranging the reimbursement or
payment of money by the Acorn D-REIT Manager to the Security Holders or
former Security Holders, by the Acorn D-REIT Manager to the Acorn D-REIT,
or from the Acorn D-REIT to the Acorn D-REIT Manager;
• prepare and dispatch in a timely manner all cheques, warrants, notices,
accounts, summaries, declarations, offers and statements under the
provisions of this Trust Deed and the Act;
• make available for inspection to the Trustee or any Auditor appointed by
the Trustee, the records and the books of accounts of the Acorn D-REIT
Manager, giving either oral or written information as required with respect
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Item Key Aspects

to all matters relating to the Acorn D-REIT Manager, its properties and its
affairs;
• be fair and equitable in the event of any conflict of interest, and particularly
disclose to the Trustee and in the Annual Report instances of potential or
actual conflicts of interest;
• credit to the Acorn D-REIT all monetary benefits or commissions arising out
of managing the Fund, other than the Acorn D-REIT Manager's Fees;
• account to the Trustee within thirty days after receipt by the Acorn D-REIT
Manager any monies payable to the Trustee;
• keep and maintain records of the Acorn D-REIT at all times;
• not engage or contract any advisory or management services on behalf of
the Acorn D-REIT without prior written approval of the Trustee;
• provide instructions to the Trustee to implement the objectives of the Acorn
D-REIT and, in consultation with the Trustee, appoint a property manager
or other person as its agent to assist it in undertaking its functions as Acorn
D-REIT Manager;
• be liable for any acts or omissions of its agents;
• not make use of confidential information acquired when acting as the
Trustee to gain an improper advantage for itself or for another person or to
cause detriment to a beneficiary;
• ensure that the REIT Assets are held separately from any other assets of the
Trustee and of any secondary disposition Trustee and any other trust,
Scheme or person;
• Establish and maintain risk management systems and controls and ensure
that it has adequate resources and systems;
• Obtain tenants and manage tenancy agreements; and
• Carry out such other duties or functions as may be assigned to it from time to
time by the Trustee.
Duration of the The REIT Manager’s appointment to manage the REIT shall:
Appointment of the i. Take effect on the Commencement Date;
REIT Manager
ii. shall subsist for an initial period of three (3) years and shall be renewed
automatically subject to the passing of an Ordinary Resolution by Security
Holders, and each subsequent term shall be governed by the D-REIT Management
Agreement and shall be for a further term not exceeding three (3) years;
iii. be terminated immediately should the REIT Manager cease to be licensed as a
REIT Manager in terms of the Act or should the REIT Manager be de-registered in
terms of the Act or the Companies Act of the Laws of Kenya;
iv. be terminated if the Acorn D-REIT Manager or an Associated person of the Acorn
D-REIT Manager breaches any Anti-Bribery and Tax Evasion Laws as set out in the
Trust Deed.
If the REIT Manager is de-registered as a REIT Manager it shall within seven (7) days
of its de-registration give written notice to the Trustee of such de-registration.
Without prejudice to the foregoing, this REIT Manager’s Agreement may be
terminated forthwith by either party if the other party commits a fundamental
breach of the terms and conditions herein and fails to remedy such breach within
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Item Key Aspects

thirty (30) days after being issued with a written notice by the other party requiring
the party in breach to remedy the same.
REIT Manager’s The Trustee empowers the D-REIT Manager generally, subject to any limitations
Authority contained in any investment guidelines as may have been agreed to between the
Trustee and the D-REIT Manager and to the provisions of the Act, to act as necessary
to achieve the investment objectives of the Acorn D-REIT, save in the case of
transactions involving real property for which the Trustee's prior written permission
shall be required.
Undertakings by the The D-REIT Manager undertakes to:
REIT i. Provide the Trustee on a monthly basis, by the tenth (10) working day
Manager of each month, with:
ii. A portfolio statement reflecting the book and market value of each
Asset;
iii. A statement of the capital transactions;
iv. A statement of the revenue receipts including rents received;
v. A cash and call deposit account statement;
reflecting the status of the Trustee's portfolio as at the last day of the previous
month;
vi. Make records pertaining to the Assets available for inspection by the
Trustee's auditors or their duly authorized representatives, at (Insert
Place) or wherever the REIT Manager’s offices are located, whenever
reasonably necessary for audit and control purposes;
vii. Realize such Assets as the Trustee may request in writing from time to
time;
viii. In liaison with the Property Manager, monitor the collection of all
income and other benefits arising from the Assets which are paid into
the Trustee's account or invested on the Trustee's behalf;
ix. Act in the best interest of the Security Holders at all times; the REIT
Manager shall indemnify the Trustee for any loss or damage that the
Trustee may suffer as a direct or indirect result of dishonesty or
negligence on the part of the REIT Manager employees or any person
engaged in carrying out the REIT Manager’s duties in terms hereof. Save
for the foregoing, the REIT Manager shall not be liable for any loss or
damage, which the Trustee may suffer.
x. Ensure that all personnel involved in the provision of the services
contemplated by the REIT Manager’s Agreement are suitably skilled and
technically competent to perform the tasks assigned to them.
xi. Perform any other REIT Manager duty mutually agreed or that may be
agreed upon between the parties from time to time during the
substance of this Agreement.
xii. Ensure that any vacancies arising in the positions of regional director,
chief investment officer, property asset manager and head of property
investment in the employ of the REIT Manager are filled promptly, and
in any event not to permit three of these four positions to be vacant at
the same time.
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Item Key Aspects

xiii. submit to the Trustee within ten (10) Business Days of the last Business
Day of each calendar month a report in accordance with the HSES
Monitoring Checklist.
xiv. Ensure that in its management of the Acorn D-REIT, it:
xv. Shall maintain and comply with the Adequate Procedures as set out in
the Trust Deed;
xvi. ensure that it and its operations comply with the HSES Requirements as
set out in the D-REIT Management Agreement;
xvii. comply with, and implement an effective system to ensure that it and
its operations comply with, all environmental and social and health and
safety policies and procedures adopted by the Acorn D-REIT Manager
from time to time (which shall require compliance with minimum
standards under Applicable Law including but not limited to HSES Law)
and implement and maintain Anti-Corruption Procedures;
identify, assess, mitigate and manage health, safety, environmental and social risks
in respect of the Acorn D-REIT;
xviii. ensure that no Prohibited Payment is made or provided, directly or

indirectly, whether by it (or on its behalf), by any Associated Person of
the Acorn D-REIT Manager, its officers, directors or any other Person
acting on its behalf, including any contractor or sub-contractor or any
Person engaged by the REIT Manager in connection with the Acorn D-
REIT to, or for the benefit of, any authority (or any official, officer,
director, agent or key employee of, or other Person with management
responsibilities in, of any such authority) in connection with the Acorn
D-REIT;
xix. Ensure that no investments in any Unit and no payments made by the
Acorn D-REIT Manager in connection with the Acorn D-REIT are or will
be funded out of funds of Illicit Origin, and none of the sources of funds
to be used by the Acorn D-REIT Manager or its business are or will be of
Illicit Origin;
xx. To comply with the PIDG OPPs;
xxi. To comply with the PIDG Investment Policy;
xxii. To comply with the PIDG HSES Standards and Policies;
xxiii. May give such assurances of compliance in relation to the matters set
out in Clause 7 of the D-REIT Manager’s Agreement as may reasonably
be requested by any Security Holders provided that such assurances if
in writing will be disclosed to the Trustee and be available for inspection
by all Security Holders.
xxiv. Adopt such Environmental Management System Plan as, subject to any
applicable law, can be reasonably and economically be implemented
and agreed with the Trustee at all times taking into account the best
interests of the Security Holders.
xxv. Issue such reports as are required by the Regulations, any applicable law
and/or as may be agreed with the Trustee.
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Item Key Aspects

Such reports will include the D-REIT Manager’s compliance with the Scheme
Documents and the Regulations. The D-REIT Manager may, in addition, issue semi-
annual reports to the Trustee with such financial or operational information as may
be agreed with the Trustee.
8.2. Summary of Material Provisions in Other Scheme Documents
8.2.1. D-REIT Management Agreement
Item Key Aspects
Duties of the REIT The REIT Manager shall, subject to the terms of the scheme documents and any
Manager directions in writing received from the Trustee:
a) acquire, manage, maintain and dispose assets of the scheme and, where
authorized by the scheme documents, conduct development and construction
activities in accordance with the provisions of the scheme documents, the
Regulations and the law applicable to trusts and to give effect to the objectives
of the scheme
b) take all reasonable steps and exercise due diligence to ensure that the assets of
the scheme are invested in accordance with the Scheme Documents;
c) while acting in the capacity as a fiduciary on behalf of the Security Holders:
i. exercise the degree of care and diligence that a reasonable and skilled
person would exercise in the position of a management company;
ii. act in the best interests of the Security Holders and where there is a conflict
between the interests of the Security Holders and that of the Manager, give
priority to the interests of Security Holders;
iii. observe high standards of integrity and fair dealing in managing the fund to
the best and exclusive interests of the Security Holders;
iv. not use information acquired in his capacity as Manager to gain an unfair
advantage for itself or other persons, or to the detriment of the Security
Holders;
v. ensure that the property of the Acorn D-REIT is clearly identified and held
separately from the assets of the Manager or any other person; and
vi. establish and maintain risk management systems and controls and ensure
that it has adequate resources and systems, including suitably qualified and
equipped human resources to fulfil its functions and obligations.
In addition to the duties specified above, the Acorn D-REIT Manager shall:
a) account to the Trustee and the Security Holders for any loss suffered by the
scheme as a result of failure by the REIT Manager, any director of the Manager,
any officer, employee or agent appointed by the REIT Manager to exercise the
required standard of care and diligence necessary to operate and manage the
Fund;
b) maintain on behalf of the Trustee, proper accounting records and other record
to enable an accurate view of the Acorn D-REIT to be formed;
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Item Key Aspects

c) prepare accounts and provide all assistance necessary to enable an audit of the
accounts prepared in accordance with the Regulations;
d) take all reasonable steps and exercise due diligence to assist and ensure that the
assets of the Acorn D-REIT are valued as required by the Regulations;
e) obtain tenants and manage tenancy arrangements and carry out or cause to be
carried out all property management functions in compliance with Estate Agents
Act;
f) obtain quotations for insurance of the assets of the Acorn D-REIT and make
recommendations to the Trustee;
g) prepare budgets for capital works and maintenance of the assets of the Acorn
D-REIT;
h) recommend to the Trustee for approval, any budgets for capital works and
maintenance and upon such approval, implement the approved budgets, capital
works and maintenance programmes;
i) prepare budgets and work programmes, negotiate contracts for
recommendation to the Trustee for approval in relation to the development and
construction works including the appointment of contractors and professional
and expert advisors;
j) implement any budgets, work programmes and contracts approved by the
Trustee in relation to development and construction works, update budgets and
work programmes as required and recommend changes to the Acorn D-REIT;
k) prepare and submit to the Trustee recommendations on distributions;
l) undertake all calculations including calculations of net asset values and ratios
required to comply with the terms of the scheme documents and the
Regulations;
m) arrange and recommend to the Trustee for approval any borrowings or other
financing arrangements and the entering into of any risk management products
or strategies;
n) make recommendations to the Trustee and manage repayment and compliance
with the terms of any borrowing arrangement;
o) take all reasonable steps and exercise due diligence to ensure that the Units are
correctly priced and the provisions of the scheme documents on redemption are
complied with;
p) prepare and lodge with the Authority, and circulate to the Trustee and Security
Holders, periodic reports as required under the Regulations; and
q) ensure that the scheme documents are available to any Security Holder
The D-REIT Manager shall, in the performance of its duties, act in the best interests
of Security Holders as beneficiaries of the Acorn D-REIT and take reasonable care
to protect those interests.
The D-REIT Manager shall conduct all transactions at an arm’s length and in an
open and transparent manner. The D-REIT Manager shall avoid such acts or
conduct of transactions that would result in unnecessary cost or risk to the fund.
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Item Key Aspects

Where the D-REIT Manager that intends to conduct a transaction with a connected
person, the REIT Manager shall comply with Regulation 118.
The D-REIT Manager shall in the exercise of its powers and execution of its duties
under this Agreement, take all reasonable measures to avoid potential conflicts of
interest that may affect the REIT Manager’s ability to discharge its functions in
accordance with the Regulations.
REIT Manager’s staff The REIT Manager shall have key personnel with experience and skills to
a) manage the Acorn D-REIT scheme; and;
b) implement the objectives of the scheme and to enable it to undertake the role
of and duties as D-REIT Manager.
The D-REIT Manager shall at all times have access to and shall appoint from time
to time, when required, persons having the required skills to enable it to
implement the objectives of the scheme and to undertake the role of and duties as
REIT Manager.
The D-REIT Manager shall appoint a compliance officer in accordance with the
Regulations.
The board of directors of the REIT Manager shall be composed of at least two
independent directors one of whom shall be appointed as the chairperson.
The REIT Manager shall appoint an officer of the rank of a manager or above, as
the principal person(s) employed by the Manager who will undertake the direction
and control of the Manager’s duties and obligations under this Agreement (such
person, the “Manager Representative”).
The Manager Representative shall have full authority on behalf of the REIT
Manager.
The REIT Manager may from time to time replace the Manager Representative
upon prior written notice to the Trustee.
In the event that the Trustee is dissatisfied with the services provided by the
Manager Representative, or for whatever other reason, the Trustee shall notify the
REIT Manager who shall be required to appoint a replacement Manager
Representative within thirty (30) days of such notice.
Duration of The term of the D-REIT Management Agreement (the “Term”) shall commence
engagement from the date of the initial Offer and shall subsist for an initial period of three (3)
years. The Agreement shall be automatically renewed by the Parties for
subsequent terms each not exceeding three (3) years.
8.2.2. Development Management Agreement
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Item Key Aspects
Duties of the a) The Development Manager shall diligently provide the Services (as noted
Development in the Development Management Agreement) and take all steps within its
Manager reasonable control to ensure that each Project achieves Completion as set
forth in the Business Case.
b) The Development Manager shall promptly inform the Acorn D-REIT
Manager in writing of anything the likely effect of which the Development
Manager reasonably believes would cause a Material Variation. The
Development Manager shall not agree to issue any Change Control Form
to any Contractor or Supplier without the prior consent of the Acorn D-
REIT Manager, which consent shall be evidenced by the Acorn D-REIT
Manager's countersignature on the Change Control Form.
c) The Development Manager may issue change instructions in respect of any
Project without the Acorn D-REIT Manager's prior written consent but only
to the extent that such change instructions do not cause a Material
Variation or lead to breach of any requirements or covenants under any of
the Scheme Documents. The Development Manager shall report in the
Financial Appraisal any change instruction for which prior consent is not
required pursuant to the above.
d) The Development Manager shall not be responsible for:
▪ any forecasts of financial viability; or
▪ the advice or recommendations that may be provided by any
Consultant or adviser appointed by the Acorn D-REIT Manager.
e) The Development Manager shall follow the Development Management
Methodology. Before advancing to a new gate as described in the
Development Management Methodology, the Development Manager
shall obtain the Acorn D-REIT Manager's consent as provided in the
Development Management Agreement.
Obligations of REIT a. supervise and be responsible for the actions of the Development
Manager Manager and ensure that the Development Manager complies with the
terms of the Scheme Documents, the Act and the Regulations.
b. make available to the Development Manager at no charge all
information necessary or useful to the Development Manager for the
purposes of this Agreement and the Development Manager’s obligations
hereunder.
c. for each Project, engage and retain at the cost and expense of the Acorn
D-REIT, a qualified, reputable, and experienced Architect and other
consultants and advisers, including engineers, designers, landscape
architects, and other consultants to undertake specialist design and
other functions in connection with the Projects (the “Consultants”),
which the Development Manager shall manage as provided in this
Agreement.
d. instruct the Architect and the Consultants to:
i. take instruction directly from the Development Manager;
ii. communicate directly with the Development Manager; and
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Item Key Aspects

iii. provide such information to the Development Manager as the
Development Manager may from time to time request in
connection with the Projects.
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PART 9: KENYA ECONOMIC OVERVIEW

9.1. Country Overview
Source:IFC, World Bank, CIA Factbook
Area (sq km) 580,367

Population c.47.6m
Official Languages English, Kiswahili
Currency KES
Nominal GDP c.US$ 105bn (2020E)
GDP per Capita c.US$ 2,071(2020E)
Real GDP Growth 5.4% (2019A)
Agriculture
Key industries Manufacturing
Services
Fiscal Year 1 July-30 June
Exchange rate USD/KES
• East African Community
• Common Markets for Eastern and Southern Africa
Trade Associations
• Intergovernmental Authority on Development
• Tripartite Free Trade Area
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9.1.1. Population Demographics
Kenya is the 47th largest country in the world in terms of pure land mass. However, it is relatively sparsely
populated with an average of 205 people per square. Key highlights of the demographic make-up are as
follows;
• While population growth is fast enough to provide a growing workforce, a deceleration in population
growth will increase the expected positive impact of faster economic development on GDP per capita.
• The youthful population, comprising people younger than 35 and making up 75 percent of total
population will boost private consumption and promote growth in the economy;
• Historically, private consumption has compromised more than 70 percent of GDP and this trend is
expected continue in the future
• The working age population, comprising the ages between 15-64 years, is forecast to be 56.6 percent
by 2020, ensures a strong labour force
• The workforce is expected to be relatively well educated due to the government’s efforts to provide
free secondary education and improve technical skills
The graphs below show the population growth rate in Kenya over the years as well as forecast growth till 2022:
Kenya Poulation growth

60.0 2.9%
50.0 2.8%
40.0
2.8%
30.0
2.7%
20.0
10.0 2.7%
0.0 2.6%
2015 2016 2017 2018 2019 2020 2021 2022
Population % growth
Source: Kenya National Bureau of Statistics
9.2. Vision 2030 Programme
Kenya’s Vision 2030 programme is the country’s new development blueprint that covers the period 2008 to
2030.It aims to transform Kenya into a newly industrializing ‘’ middle income country that will provide a high-
quality life to all its citizens by the year 2030. The Vision has been developed through an all-inclusive and
participatory stakeholder consultative process.
It is to be implemented in successive 5- year Medium Term Plans. The key pillars of this programme are as
follows:
a. Economic Pillar: maintain a sustained economic GDP growth of 10% p.a. over the next 25 years
b. Social Pillar: A just and cohesive society enjoying equitable social development in a clean and secure
environment
c. Political Pillar: An issue-based, people- centred, result oriented and accountable democratic political
system
The economic, social and political pillars of Kenya’s Vision 2030 are anchored on the below key items:
i. Macroeconomic stability for long term development
ii. Continuity in governance reforms
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iii. Enhanced equity and wealth creation opportunities for the poor
iv. Infrastructure
v. Energy
vi. Science, technology and Innovation
vii. Land reforms
viii. Huma resource development
ix. Security
x. Public service
Publications Ranking
2016-2017 2017-2018
Ease of Doing Business 62nd out of 189 56th out of 190
WEF Global Competitive Index 58th out of 140 52nd out of 138
Index of Economic Freedom 71st out of 178 51st out of 180
Human Development Index 163rd out of 188 159th out of 188
Mo Ibrahim Index 11th out of 54 9th out of 54
Source: World Bank
9.3. Recent Economic performance
9.3.1. GDP
Real Gross Domestic Product (GDP) is estimated to have expanded by 5.4 per cent in 2019 compared to 6.3 per
cent in 2018. The growth was spread across all sectors of the economy but was more pronounced in service-
oriented sectors. The Agriculture, Forestry and Fishing sector accounted for a sizeable proportion of the
slowdown, from 6.0 per cent growth in 2018 to 3.6 per cent in 2019. The manufacturing sector grew by 3.2 per
cent in 2019 compared to 4.3 per cent growth in 2018. Despite most sectors recording decelerated growths,
the economy was supported by accelerated growths in Financial and Insurance (6.6 per cent) and Real Estate
activities (5.3 per cent).
The economic growth slowed down to 4.9% in the first quarter of 2020 compared to 5.5% over the same period
in 2019 with the decline mainly attributed to an underperforming economy coupled with the heightened
uncertainty following the COVID-19 outbreak during the end of the first quarter. This led to decelerated growth
from traditionally strong sectors such as the tourism sector. Growth projections ast end of 2020 are forecasted
at 1%.
Real GDP( % yoy)

7.00% 6.30%
5.70% 5.90%
6.00% 5.40%
4.80%
5.00%
4.00%
3.00%
2.00% 1.00%
1.00%
0.00%
2015 2016 2017 2018 2019 2020E
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9.3.2. Inflation
Inflation rose to 5.2% in 2019 up from 4.7% in 2018 mainly due to increased food prices Annual average
inflation rate rose to 5.20 per cent in 2019 compared to 4.69 per cent recorded in 2018 but remained within
the CBK medium-term target of 5.0 per cent, with a range of plus or minus 2.5 percent
Inflation
10.0%
7.8%
8.0% 6.6% 6.2% 6.5% 6.7%
6.0% 4.7%
4.0%
2.0%
0.0%
2015 2016 2017 2018 2019E 2020E
9.3.3. Monetary Policy

The Government through the Central Bank of Kenya (CBK) monetary policy committee reviewed the
Central Bank Rate (CBR) downwards from 9.00 per cent in July 2018 to 8.50 per cent in November 2019
signalling an easing of monetary policy with the aim of boosting economic growth. Similarly, the capping
of bank interest rates previously enshrined in section 33B of the 2016 Banking Act, was repealed in
November through enactment of the Finance Act, 2019. Generally, nominal and real interest rates reduced
in 2019 with the 91-Day Treasury bill decreasing to 7.17 per cent from 7.34 per cent as at December 2018.
Similarly, the interbank, savings and lending rates declined by 2.12, 1.11 and 0.27 points respectively, over
the same period. However, the interest rate spread increased to 5.14 per cent as at December 2019 from
5.09 per cent as at December 2018.
In light of the COVID- 19 pandemic, the Committee noted that the package of policy measures
implemented since March were having the intended effect on the economy, and will be augmented by the
implementation of the measures in the FY2020/21 Budget. Progress was noted on the implementation of
the fiscal policy measures announced in the FY2020/21 Budget, including the KES56.6 billion Economic
Stimulus Programme, to stimulate the economy and cushion vulnerable citizens and businesses from the
adverse effects of the pandemic. The MPC concluded that the current accommodative monetary policy
stance remains appropriate, and therefore decided to retain the Central Bank Rate (CBR) at 7.00 percent.
Year 2015 2016 2017 2018 2019 2020E
Central Bank Rate (CBR), % year end 11.5 10.0 10.0 9.0 8.5 7.0
3 Month interest (T-Bill, year-end %) 9.8 9.4 8.0 7.3 7.6 8.0
Credit to private sector(%yoy) 18.0 7.0 1.0 4.0 7.0 15.0

Source: Central Bank of Kenya, RenCap estimates
9.3.4. FX Trends
Foreign exchange is liberalised, and commercial banks can buy foreign currency following an administered
floating exchange rate. There are no legal restrictions on capital transfers in and out of Kenya. Investors can
obtain foreign exchange and make transfers at any authorized bank to repatriate profits and dividends and
make payments for imports and services. Depreciation of the shilling in recent years has served to act as a
salient external buffer against exogenous shocks but overall the currency has been relatively stable against
major currencies
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The Central Bank of Kenya licenses foreign exchange bureaus, which were introduced in 1995 to enhance
efficiency in the forex market.
KES performance against major currencies

150
100
50
USD GBP EUR
Source: Central Bank of Kenya
9.3.5. International Trade and Balance of Payment

In 2019, the balance of trade deteriorated by 5.2 percent to a deficit of KSh 1,209.7 billion. This was occasioned
by the decline of 2.9 per cent in value of exports and an increase by 2.4 per cent in the value of imports. Value
of total trade transactions increased from KSh 2,378.8 billion in 2018 to KSh 2,403.0 billion in 2019.
The overall Balance of Payments position improved from a surplus of KSh 103.4 billion in 2018 to a surplus of
KSh 106.4 billion in 2019, on account of a build-up in official reserves. The current account balance worsened
to a deficit of KSh 567.0 billion in 2019 from a deficit of KSh 511.3 billion in 2018. The financial account net
inflows declined by 3.9 percent from a surplus of KSh 662.0 billion in 2018 to a surplus of KSh 636.3 billion in
2019. This was mainly occasioned by declines in net inflows of direct investment and other investment
liabilities.
9.3.6. Construction Activity
In 2019, the construction sector registered a growth of 6.4 per cent compared to growth of 6.9 per cent in
2018. The total government expenditure on roads is expected to rise by 10.0 per cent to KSh 169.9 billion in
2019/20 from KSh 154.5 billion in 2018/19. Development expenditure is also expected to rise by 15.5 per
cent to KSh 111.7 billion in 2019/20. The construction of Phase 2A section 1 of the Standard Gauge Railway
(SGR) from Nairobi to Naivasha covering a rail distance of 120 kilometers was completed in September 2019
at a cost of KSh 150.0 billion.
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PART 10: REAL ESTATE SECTOR OVERVIEW

10.1. Industry Overview
The real estate sector in Kenya has seen a boom that began somewhere in the mid to late 2000s. The boom
was bolstered by a stable political outlook, strong activity in the services sector, high FDI flows and easing credit
conditions.
The steady growth and improved macro conditions in the Country led to the burgeoning real estate sector and
witnessed an unprecedented period of growth in the commercial, retail and residential market. However, in
recent years, we have seen an easing of demand within most sub-sectors of the real estate market in Kenya.
10.1.1. Office
According to Knight Frank H1 2020 report, prime commercial rents in Nairobi remained unchanged in the first
half of 2020 at US$ 1.3 (Ksh 139) per square foot per month. The stagnation of prime rental prices was mainly
attributed to the continued oversupply of commercial space in some locations and current economic slowdown
that has resulted in most organisations putting on hold office space requirements as they focus on operational
rather than capital expenditure. It was noted there were increasing requests from tenants considering
surrendering their commercial space. As at the end of the first half, the average occupancy rate was at circa
73%, with certain districts such as Westlands having higher occupancy rates.
Fewer commercial office buildings were completed in Nairobi over the Knight Frank review period (H1 2020)
compared to the second half of 2019. The serviced office sector continues to be an emerging trend in the office
market that has recorded rapid growth both globally and regionally. Nairobi currently has a formal supply of
circa 500,000 sq. ft of flexible office space. The current pandemic resulted in the majority of people working
from home towards the second quarter of the review period. The heightened safety regulations and increased
agile working is causing a shift in operations as occupiers will have to re-configure their office layout.
COVID-19 is expected to evolve the commercial office market and form a new working normal. According to
the Africa Market Pulse Survey Report released in June, 27% of office landlords indicated they had granted
their tenants rent deferrals while 33% have undertaken a renegotiation of lease terms to ensure that tenant
businesses stay afloat. 40% of office landlords indicated that they were likely to offer concessions to retain
existing and attract new tenants.
The report further mentions that the serviced office sector continues to be an emerging trend in the office
market that has recorded rapid growth both globally and regionally. Nairobi currently has a formal supply of
circa 500,000 sq. ft of flexible office space. The current pandemic resulted in the majority of people working
from home towards the second quarter of 2020.
10.1.2. Retail
The retail market in Kenya has also seen a slow down as prime rents have decreased by approximately 6% in
the first half of 20196. Over the last three years, the retail sector witnessed slow activity with the exit of
Nakumatt and Uchumi supermarkets from prime locations. The vacant spaces have been partly absorbed by
the entry of international supermarket brands. However, oversupply continues to affect the market leading to
falling property prices within this space. Prime rent for retail properties in Nairobi dropped in 2018 as the
supply glut impacted landlord’s competitiveness, despite high demand from foreign players for quality retail
6 Knight Frank Kenya Market Update – 1st Half 2019
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premises. Prime rent dropped by US$1.7/square metre year-on-year, while subprime witnessed a mild
decrease of US$0.5/square metre.7
10.1.3. Residential
Prime residential prices in Nairobi decreased by 2.9% over the first half of 2020 compared to a decline of 1.8%
in the first half of 2019, pushing the annual decline to 5.1% in the year to June. Prime residential rents also
declined over the review period by 6.55% compared to 1.67% over a similar period in 2019, taking the annual
decline to 7.62% in the year to June. The decline in both prime residential rents and prices is mainly attributed
to the continued oversupply of residential developments, unfavourable economic climate, low liquidity and
expatriates returning to their home countries. Additionally, due to Covid-19, fewer transactions were finalised
as a result of land registries being closed and potential buyers opting to postpone land purchases.
Prime residential prices are also expected to decline albeit at a slower rate. As the economy slowly reopens,
we expect land registries to fully resume, allowing pending land transactions to be finalised
The government made progress towards the Affordable Housing goal of constructing 500,000 homes by 2022.
The Kenyan government in January signed a deal with various British Investors at the inaugural UK Africa
Summit to develop 80,000 units across the country. The UK Climate Investment (UKCI), a joint venture between
the Green Investment Group and the UK’s Government Department for Business, Energy and Industrial
Strategy announced plans to invest Ksh 3.94 billion towards the construction of 10,000 affordable green
homes.
10.2. PBSA Market Overview

The demand for student accommodation across the world continues to grow, and whilst PBSA is a relatively
new sector of real estate investment it has established itself as a significant asset class in many developed
countries. Non-cyclical rental levels, stable yields, limited supply and growing demand driven by demographic
trends and positive economic prospects all make the asset class highly attractive to institutional investors.
10.2.1. History of PBSA

Traditionally in developed markets such as the UK and US, students stayed largely in university built and run
accommodation or shared houses owned by small private landlords. As participation in higher education grew,
universities had to focus their available capital on expanding their academic capacity. They could not keep pace
with the growing demand for accommodation, which resulted in more students living in shared houses. These
were often poor quality and demand for a high quality, clean and safe accommodation was identified, with
developers starting to build purpose-built blocks of accommodation for students that were operated
professionally on a large scale. This PBSA demonstrated a stable and growing income stream that attracted
investors as rental levels have grown consistently throughout the history of the asset class; unlike retail, offices
and other commercial real estate where rental levels have fallen during economic downturns. As the amount
of PBSA grew, combined with its attractiveness to investors, it became an established real estate asset class,
that now makes up a significant part of the real estate sector, especially in the UK and US. JLL, the global leader
in student accommodation valuation, highlighted that c10% of all commercial property deals in the UK were
PBSA in 2016.
Another feature of the history of PBSA in developed markets has been rental growth, which has tended to
exceed inflation. A recent report from the Mill Group highlights the following:
◼ OECD statistics for the US show housing rental growth of 3.3% p.a. over the period 1983-2013,
compared with general consumer price inflation of 2.9% p.a.
7 Kenya Real Estate Report 2018 – Fitch Solutions
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◼ Germany shows 3.8% p.a. housing rental growth against general consumer price inflation of 2.8% over
the 50 years 1963-2013 (source: OECD)
This consistent growth in rental levels is a key factor in the yield compression that has been seen in developed
markets. Initially when it was a new concept, PBSA yields were fairly high but as consistent real rental growth
was demonstrated, along with resilience in difficult economic circumstances, yields have fallen steadily with
the increase of PBSA property valuations, to a little above prime residential yield but below other classes of
commercial property.
10.2.2. Kenya
The PBSA market in Kenya has suffered from a lack of institutional investors. Majority of the sector
developments have been done by either public universities for their students, or small-scale investors
converting homes and small-scale hotels into student accommodation. Granted there are organisations such
as the YMCA that have been in operation for over 30 years, but investment in any form of scale has been
lacking. A number of factors have influenced and enhanced the need for a structured PBSA market locally.
Government Policy
The chart below highlights the growth of student enrolment in university education over the past 28 years.
Figure 1: Student enrolment in university in Kenya
Total Student Numbers

600,000 564,507
500,000
400,000
300,000 CAGR
13%
200,000
100,000
27,572
0
1989 1990 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 -2002 -2003 -2004 - 2005 2006 2007 2008 2009 - 2010 2011 2012 2013 -2014 -2015 -2016 -
- 90 - 91 - 93 - 94 - 95 - 96 - 97 - 98 - 99 - 2000 - 01 02 03 04 05 - 06 - 07 - 08 - 09 10 - 11 - 12 - 13 14 15 16 17
As mentioned earlier, growth has been spurred by the government’s focus on upskilling the workforce by
implementing policy to improve access to tertiary care. The challenge is the policy hasn’t considered student
accommodation, leaving most students to seek their own accommodation once on-campus residences are full.
The government is now working with the private sector to fund construction of student accommodation
through PPPs. Globally, student accommodation through PPPs has been successful in South Africa, Belgium,
Egypt, and India. In Kenya, it is hoped the PPPs will deliver the progressive clearance of student admission
backlogs that have grown since 1992 so that students no longer have to wait for long periods before joining
universities. Several colleges and universities are exploring the PPP model as a means to solve the student
accommodation crisis.
Supply and Demand
According to real estate service provider, JLL international, 40% of Kenya’s housing shortage is due to the lack
of student accommodation. For instance, the University of Embu currently has 5,444 students with only 752 of
these students residing on campus. This is expected to increase in future. Student accommodation is usually
provided through a combination of on-campus provision and private hostels that are within the vicinity of the
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university. This has placed a lot of strain on-campus accommodation facilities, forcing students to seek private
accommodation. According to a construction review online, there are plans to construct 3,800 hostels worth
US$68 million in Kenya this year. Official statistics show that of the 31 universities in Kenya only 25% of these
students can be accommodated thus forcing thousands to seek alternative accommodation. This implies that
the majority of students are living in private hostels and many will experience various challenges such as: poor
sanitary services, lack of access to on campus services e.g. library and computer labs, insecurity, congestion
and long commutes.
10.3. PBSA sector growth drivers
10.3.1. Changing Demographics

i. Youth Bulge
Similar to many developing countries in Africa, Kenya is experiencing a “youth bulge” with a large and growing
youthful population and low median age: Kenya’s youth, 15 – 24 years old, account for 20% of the total
population. This is one of the highest in the world and is close to Ethiopia which has the highest youth
population percentage at 22% of the total population8. This is to be expected given Kenya’s historically high
population growth rate of 2.5% – 3.5% over the last 30 years, which is significantly higher than the global
average of 1.1 – 1.8%9. In addition, Kenya’s median age has oscillated between 18 and 19 over the last 10 years.
The distribution chart below highlights the “youth bulge” Kenya is currently experiencing and demonstrates
the growth that will occur in individuals eligible to attend tertiary education over the next two decades.
Figure 2: Population growth
Kenya 1990 Kenya 2016

Male Female Male Female
70+ 70+
65 - 69 65 - 69
60 - 64 60 - 64
55 - 59 55 - 59
50 - 54 50 - 54
45 - 49 45 - 49
40 - 44 40 - 44
35 - 39 35 - 39
30 - 34 30 - 34
Acorn
25 - 29 25 - 29 Focus Area
20 - 24 20 - 24
15 - 19 15 - 19
10 - 14 10 - 14
5 -9 5 -9
0-4 0-4
4,000 3,000 2,000 1,000 0 1,000 2,000 3,000 4,000 4,000 3,000 2,000 1,000 0 1,000 2,000 3,000 4,000
Thousands
Source: Kenya Bureau of Statistics, 2018
The youth bulge is also a result of improved life expectancy over the last two decades. Kenya’s life expectancy
has increased from 51 to 69 years from 2000 to 2016 (African continent average is 53 years), as a result of
government policy changes focused on better health care. The WHO identifies the key drivers of increased life
expectancy as better child survival and better management of HIV and malaria treatment 10. These
improvements suggest that the high numbers of children under 15 will result in growing numbers reaching
tertiary education age, driving demand for tertiary education and the related accommodation for students.
Population growth in Kenya continues to be high, with the youth anticipated to grow to 20 million by 2050
from 10 million in 2017. This continued growth in the youth population is likely to continue driving demand for
secondary and tertiary education over coming decades, and with it, accommodation for students attending
tertiary education institutions.
8 Population Reference Bureau

9 https://data.worldbank.org/
10 World Health Organisation, 2016
Page | 112
ii. Growing Middle Class

A 2016 report from the Institute of Economic Affairs (IEA Kenya) notes that there has been an increase in
employment in formal and informal employment. In 2009, there were 10.9 million jobs which increased to 15.2
million in 2015, representing a 42% increase over the period.
The report further shows that only 23% of all waged employees earn monthly incomes between KES 50,000
and KES 100,000 per month. Additionally, a majority of Kenyans are self-employed and therefore unable to
obtain mortgages. Mortgages in Kenya traditionally target white collar workers as they seemingly had
stable/predictable salaries and job security. With the downturn in the global economy, traditional employment
doesn’t offer the same job security as it did in the past. This meant the mortgage companies also became more
prudent in their lending practices and made home ownership harder. The chart below from the Institute of
Economic Affairs further showcases the income breakdown of salaried individuals in Kenya.
Figure 3: Distribution of wage employees across income groups, 2015
Kenya Institute of Public Policy Research and Analysis (KIPPRA) recognises the impact of population growth
and the growing middle class. For example, the employed to population ratio increased from 28% in 2009 to
32% in 2014, signifying a growing work force and an overall increase in disposable incomes. The latter also
signifies employment is growing faster than the population growth11.
Despite the growing middle class, home ownership is still out of reach for a majority of the population,
especially in urban areas. Taking Nairobi as an example, the split between home ownership and renting is 9%
vs 85% (with the other 6% having alternative arrangements), according to the recently released 2015/16 Kenya
Household Survey. The challenge to home ownership is further highlighted by the relatively low number of
mortgages in the market. With a working population of more than 20 million, Kenya had 26,187 active
mortgages at the end of 201712. A major reason is the difficulty in obtaining home loans. Mortgages are hard
to obtain because institutions only lend to salaried workers, who only account for 10% – 15% of the total
working population, and the rest (self-employed) are forced to either build/purchase their own homes without
bank loans or rent. The result is that the vast majority of the population, especially in urban areas, only seek
properties for rent because it is affordable and available. This results in increased demand and hence prices
for rental housing.
10.3.2. Urbanisation
Emerging economies have always experienced rapid growth in urban areas with the rural population moving
to cities and towns in search of better economic prospects. Urban areas receive the most investment from the
government and offer the best opportunity for economic growth. Infrastructure development and investment,
for example, has historically been focused on capital cities and port cities. Kenya’s three major cities of Nairobi,
Mombasa and Kisumu have historically attracted the majority of rural-urban migration, as the rural population
11 Kenya Economic Report 2017 - KIPRRA

12 2017 Central Bank of Kenya Banking Sector Report
Page | 113
seek opportunities for economic prosperity. Consequently, Governments will invest in infrastructure in these
cities because they form the centre of economic activity and neglect other smaller urban towns. The latter
increases the effect of urbanisation in the larger cities as people disregard the smaller towns and move to the
big cities.
Per the World Bank report on urbanisation 13, Nairobi will continue to grow considerably as a metropolitan hub.
The population of the City currently stands at 4.5 million and is projected to exceed 6 million by 2030 14. Despite
the advent of devolution, urbanisation is still a driver of growth in Nairobi. The World Bank report also states
that urbanisation is still driven by rural push as opposed to industry pull in the urban areas. The table below
highlights the significance of Nairobi, as an urban hub, on the country’s economic activity.
Table 1: County Share of GDP (Average 2013-2017)15
Table 2: Kenya population growth16
No. of urban % of urban to total Intercensal growth

Year Total population centres Urban population* population rate (percent)
1948 5,407,599 17 285,000 5.3
1962 8,636,263 34 747,651 8.7 6.3
1969 10,956,501 47 1,076,908 9.8 7.1
1979 15,327,061 91 2,315,696 15.1 7.7
1989 21,448,774 139 3,878,697 18.1 5.2
1999 28,159,922 180 5,429,790 19.3 3.4
2009 38,412,088 230 12,023,570 31.3 8.3
As per the above table, the percentage of the urban population has grown by a factor of 6 over the last 60
years. Urbanisation is expected to grow with approximately 50% of the population forecast to live in cities by
2050.
Figure 4: Urban vs. rural population growth
13 Kenya Urbanization Review, World Bank 2016

14 Kenya Urbanization Review World Bank 2016
15 Kenya National Bureau of Statistics, Gross County Product 2019
16 Kenya Bureau of Statistics 2009 Kenya Population and Housing Census Analytical Report on Urbanization
Page | 114
Percentage of Urban Population Urban - Rural % Share of Population

70% 100%
90%
60%
80%
50% 70%
40% 60%
50%
30% 40%
20% 30%
20%
10%
10%
0% 0%
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
AFRICA Eastern Africa Kenya Urban Rural
All the people moving to the cities have to find somewhere to live and this demand for housing has outstripped
the growth in supply driving up housing costs, a trend that has been highly visible in Nairobi. The Kenyan
National Housing Survey 2013 highlighted that Kenyan households spend 30% of their total income on
accommodation.
Urbanisation also drives demand for education in the cities as people from rural backgrounds seek increased
levels of education to equip them to maximise their economic opportunities in the cities. The result is that
there will be an increased proportion of the youth population seeking further education.
The other challenge of urbanisation is income disparity. Individuals migrating from rural areas tend to have
incomes much lower than their established peers in the urban areas, and this does not change in the short-
term. The result is they end up competing with low income urban residents for a limited supply of affordable
housing. This tends to drive up the price of cheap housing that students are also competing for, making it even
less affordable for students. The effect of urbanisation on supply of affordable housing is exacerbated by the
young median age of the Kenyan population as it is the young that are most likely to migrate to the cities,
seeking better opportunities in education and employment.
Urbanisation is putting pressure on the real estate market to provide affordable and good quality housing for
specific demographics: rural-urban migrants, low income urban residents and students. SKP’s extensive
research (discussed in more detail below) and analysis on the viability, availability and affordability of student
accommodation was based on factors such as urbanisation, and made it clear an opportunity exists in the
provision of affordable and good quality accommodation for students.
Acorn’s products, Qwetu and Qejani, cater specifically to students and focus primarily on the provision of
affordable, safe, secure, and good quality accommodation. With this understanding of the student
accommodation market, current and upcoming projects in high-demand areas, and operational expertise, the
Group intends to be the largest PBSA provider in the region with a 35% market share by 2025.
10.3.3. Education Trends

The importance of education to the Kenyan household is another factor that increased the number of students
in the system. The 2015/16 Kenya Integrated Household Budget Survey draws attention to the importance of
education in the section on income. The survey analysed the reasons households access credit and how they
spend their funds. The table below highlights the reasons households access credit. The emphasis on education
is apparent with 20.9% of credit accessed being utilized to pay for education/school fees.
Table 3: Use of credit
Purchase/ Purchase of
Purchase of Purchase of
Subsistence Business Construction Medical Land Purchase of Ceremony/ Motor
Education Agricultural Agro Other Not Stated
Needs Investment of Expenses Purchase Livestock Weddings vehicles/
Inputs Machinery
Dwelling cycles
% distribution of
main purpose of
credit 39.4% 20.9% 16.2% 5.4% 4.6% 3.8% 2.8% 1.3% 1.2% 1.0% 0.2% 3.2% 0.1%
Page | 115
A 2017 report on Education in Kenya17 highlighted the following key trends:

◼ The number of universities (public and private) increased from 67 in 2014/15 to 70 in 2015/2016 and
to 71 in 2016/17
◼ There has been increased enrolment of students pursuing university education in both public and
private universities with student numbers standing at 421,000 in 2014/2015; 540,000 in 2015/2016;
and 628,000 in 2016/17, an increase of 20+% year on year
The expansion of post-secondary education created a supply challenge for the government. One quick and
innovative move was the elevation in status of some institutions from colleges to universities. The effects are
seen from 2016 when the number of public universities increased by 30%, 23 to 30. The trend has continued
with certain public and private institutions getting promoted to full university status to accommodate more
university students.
Based on information from the Economic survey, university admission increased from 27,000 students in 1990,
to 564,507 in 2016, a CAGR of 13%. However, the strong growth seen in the tertiary education sector slowed
down as a result of the policy changes initiated and implemented by the former Cabinet Secretary for
Education.
The purpose of the reforms was to streamline the education sector by eliminating fraud in the system, shutting
down universities offering sub-standard programs, admit all students who attain a passing grade to
universities, refresh the curriculum and exam management in primary and secondary education, and an overall
streamline of the education system. The result for tertiary education was a number of schools were shut down,
and the number of students attaining passing grades to university also dropped. The latter was a result of
weeding out fraudulent teachers and students and refreshing the format and delivery of examination material.
The overall result of the “Matiangí reforms” is the number of admissions to public universities dropped from
120,000 in 2016 to 90,000 in 2017.
Table 4: Tertiary student numbers
600,000 Matiang’i Effect

506,352
486,107 520,900
500,000 564,507
401,405
400,000
300,000
202,556 275,100
200,000 148,142 153,314

148,009
100,000
-
2013 2014 2015 2016 2017
University Enrolment Other post secondary enrolment - TIVET and TTC
Source: 2018 Economic Survey
The table above shows the impact of the reforms. The enrolment numbers clearly highlight a drop in University
attendance from 2016 to 2017, and the increase of 32% and 36% of TIVET and TTC enrolment in 2016 and 2017
respectively. The reason for the drop in university enrolment was the number of students attaining a C+, the
minimum grade of entry to a public university, dropped significantly after the reforms. Consequently, there
were more students with grades below C+ that were absorbed by TIVET and TTC institutions, hence the
increase in enrolment over the last few years. The government also realised there was a skill gap after some
vocational schools were turned into universities e.g. Kenya Polytechnic University College. The reforms
17 Education Sector Report for the Medium-Term Expenditure Framework 2018/19 – 2020/21
Page | 116
encouraged more students to attend vocational schools and obtain valuable skills as an alternative to
University.
Despite the growing number of students, student accommodation has not grown significantly over the past 20
years. The alternatives being offered to students who don’t get campus accommodation is to either look for
hostels, stay with their parents, or share a flat. Hostels are generally small operations often some distance from
universities with poor sanitation, security and safety. Where available, campus accommodation is often of a
similarly poor standard. Staying at home is also a challenge with many students living far away from campuses
and having a long commute to school or coming from other parts of the country and overseas. The flat or house
sharing option becomes increasingly expensive as urbanisation drives up rents. Acorn’s experience shows that
a significant number of students currently stay at home not out of choice but because of the lack of decent and
affordable alternatives. SKP’s research has shown the most important factors in a student’s choice of
accommodation are security, location, quality and affordability.
Universities do not have the capital to build significant amounts of student accommodation and will need to
continue investing in their academic facilities to accommodate the increasing growth in student numbers. The
national government has recognised the situation and has begun establishing Public Private Partnerships
(PPPs) to develop student hostels for public universities. So far, this initiative has been slow to take off as it
faces challenges of finding investors/ financiers willing to invest within public university properties due to the
inherent risks of student opposition, damage, unrest and other related issues, since tertiary education is still a
sensitive quasi political subject in Kenya. Furthermore, managing student accommodation and maintaining it
to a high standard in the long run is a highly specialised business, which universities often have limited capacity
to provide.
At the beginning of 2018, the National Treasury held a conference to court potential investors with a KES20
billion PPP program. The program aims to leverage private sector expertise to build accommodation for public
universities. The government has already commissioned the construction of 30,000 beds for 3 public
universities18. However, the scale of the shortfall of well located, good quality, secure and clean
accommodation is such that there will still be a significant mismatch between demand and supply creating a
market opportunity in the student accommodation sector.
10.3.4. Property ownership (rent vs own)

Property prices have increased, but the uptake has only increased in the rental market with most individuals
unable to own homes and choosing to rent instead. This is a very different trend from regions such as Europe
and America, which have a high percentage of home ownership, both rural and urban. European home
ownership rates average 60 – 70%19, which is much higher than Africa with home ownership rates lower than
40%. Also, it is important to note home ownership is more prevalent in the rural areas in Kenya. Kenya is no
exception to the trend of rental vs home ownership in rural vs urban areas as the table shows 20:
Table 5: Rural vs urban areas
Owners % Renters %
National 5,900,720 3,279,997

Rural 4,810,531 81.5 680,836 20.8
Urban 1,090,189 18.5 2,599,161 79.2
Source: Kenya National Housing Survey 2012/2013
Using Kenya as the base, a multitude of factors drive the rental discussion:
18 https://www.constructionkenya.com/5263/kenya-student-hostels-project/
…WALLET SHARE
19 European Union – Eurostat Analysis 2014
20 2015/2016 Kenya Integrated Household Budget Survey
Page | 117
◼ Household incomes: A survey by Ipsos showed households in Kenya earning more than KES50,000 per
month accounted for 2% of the total population. This is a very small percentage when you consider
Kenya has over 10 million households. Ordinarily, these would be the individuals who could afford to
take mortgages/own homes in urban areas, but even with an income of KES50,000 a month, there
aren’t many homes in urban areas they can afford.
KES
…WALLET SHARE…
The 2015/2016 Kenya National Household survey

identified rent and utilities as the biggest budget item
for urban dwellers with a 35.4% spend on rent nationally
Urban income pyramid – 2010 annual household income (updated to 2014) 21
◼ Cost of credit: Mortgages are still out of reach for a majority of the population, pricing is still high at
13%, and there is a high level of self-employment with most individuals choosing to purchase their
homes with cash or Sacco loans.
◼ Interest rate cap: The Government had hoped the rate cap would increase demand in the mortgage
sector with the pricing capped at Central Bank Reference Rate plus 4%, but this hasn’t been the case.
Banks became even more conservative in their lending practices as they instead put funds in treasury
bonds.
◼ Property prices: Residential property prices have grown 2x over the last 15 years driven by even more
expensive land prices. Land prices grew exponentially due to speculation. Consequently, this drove up
the all-in construction cost of the homes, pushing affordability even further out of reach.
◼ Mobility: Urban households are more mobile due to the price and quality volatility in the residential
market. The result is that households are constantly looking for affordable options for housing as they
try and maintain a standard of living.
The result is that a majority of urban families, nearly 70% in Kenya, have no choice but to rent their homes.
The issues above push households to be even more prudent in the use of their income. Young adults are forced
to stretch their earnings further as they seek affordable housing arrangements, and parents seek practical and
affordable options of accommodation for their children.
Despite the increased demand for affordable student housing, the sector still suffers from a number of issues.
A recent report from JLL stated the main concerns when searching for accommodation were security,
availability of amenities and infrastructure e.g. gym, WiFi and affordability. With the industry being relatively
new, there is still a very limited supply of serviced student accommodation. An additional challenge is that a
large number of accommodations currently available doesn’t meet the criteria of security, availability of
amenities, and affordability. The result is that good accommodation is overpriced and doesn’t meet the
student’s minimum criteria.
The alternatives students are faced with is to either live at home or with relatives or share accommodation in
a rented space. The challenge with the latter is that students end up paying more transport because most
affordable locations are not near schools, and they also incur additional costs because they have to purchase
their own furniture and appliances.
21 Kenya Bureau of Statistics
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10.4. PBSA in Africa

South Africa has the largest PBSA market in Africa and provides an overview of the potential growth of the
sector.
Demand and Supply in the South African PBSA Market
The Centre for Higher Education Trust (2009-2015) and JLL Research estimated that in 2015, 985,212 students
were enrolled in public higher education institutions across South Africa. Forecasting the total number of
students enrolled in 2018, JLL took the CAGR between 2009 and 2015 (i.e. 2.34%) and applied that rate going
forward. By doing so they estimated that advisory, a total of 1,056,092 students will be enrolled in public higher
education institutions in South Africa.
JLL, based on analysis and research, estimate that by 2018 of the estimated 1,056,000 students that will be
enrolled in public SA Universities, only c.107,000 will be housed on campus in PBSA beds provided by public
universities. This is only about 10.13% of the total demand for accommodation at public universities in South
Africa. Below is a list of the top 10 PBSA providers in South Africa.
Table 6: Top 10 PBSA providers in South Africa
Rank Top 10 PBSA Providers in SA Estimated No. of Beds

1 South Point 10,000
2 Respublica 7,250
3 Campus Key 4,000
4 Pulse Living 4,290
5 Feenstra Group 3,500
6 Citiq 3,000
7 Stag African 3,000
8 Varsity Lodge 2,500
9 HIS 2,000
10 Lapalaka 2,000
Total 41,540
Based on additional research on the segmentation of PBSA in South Africa, JLL estimate that relatively small to
medium sized student accommodation providers (or non-PBSA providers) are providing c. 384,000 beds to
public higher education students in South Africa. This means that there is ample room for the top 10 largest
PBSA providers to take away market share from the non-professional or unsophisticated student
accommodation providers that are currently operating in this ever-growing market segment. Major PBSA
developers and providers can also target a large and growing private sector higher education market.
Market Information
Major transactions in Sub-Saharan Africa concerning PBSA have generally comprised REIT buy-outs or
acquisitions on majority shareholdings in ring-fenced portfolio SPVs with complicated corporate ownership
structures. This is evidenced by the Redefine/Respublica and the PIC/South Point transactions in South Africa
over the medium term, both anecdotally concluded at prices reflecting yields on the portfolios’ current income
of c. 10%. The ongoing attempts by Inkunzi to list on the JSE provides some evidence of pricing activity in the
market. However, most students in PBSA have their rent government funded, hence there is significant political
risk associated with future PBSA income streams in South Africa, which is reflected in the high yields.
10.5. Summary of Market Opportunity

The changing demographics, urbanisation, and recent trends in the education sector make a strong business
case for investment in the student accommodation sector. The youth bulge will provide a large and predictable
increase in the tertiary education age population over the next two decades and the youth population is
Page | 119
predicted to continue growing thereafter, with forecasts of 20 million by 2050 compared with 10 million in
2017.
The middle class will also increase in size as the country continues to experience economic growth of 5% – 7%
year on year, and more jobs are created in the formal sector, leading to increasing numbers who can afford
tertiary education and student accommodation, which is a high priority for household expenditure.
Urbanisation in Kenya will likely push the rural-urban population split to 50:50 by 2050 driving demand for
affordable housing. Despite the efforts of the Government, it is almost certain that supply of affordable housing
will be unable to keep pace with the demand created by population growth and urbanisation leading to long
term rental increases, increasing the price of shared flats and houses, one of the main alternatives to PBSA.
Demographic changes and reforms in the education sector have already increased the number of students by
an average of 13% per year from 1990 to 2016.
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PART 11: STATUTORY & GENERAL INFORMATION

11.1. Meetings of Security Holders
12.1.1. The Trustee shall convene an annual meeting of the Security Holders within three months after the
relevant accounting reference date of the REIT.
12.1.2. A written notice of not less than 21 days, inclusive of the date in which the notice is deemed to be
served, and the day of the meeting, shall be given to the Security Holders of the general meeting.
This provision shall not apply to the notice of an adjourned meeting.
12.1.3. The failure by a Security Holder to receive a notice shall not invalidate the proceedings at any
meeting.
12.1.4. The Trustee, the Acorn D-REIT Manager or Security Holders, as the case may be, may convene an
extraordinary meeting of Security Holders at any time but not later than six weeks after receipt of a
requisition. A requisition shall-
12.1.4.1. State the objects of the meeting;
12.1.4.2. Be dated;
12.1.4.3. Be be signed Security Holders who, at that date, are registered as the Security Holders
representing at least ten percent (10%) of the Units issued at the date of the calling of
the meeting; and
12.1.4.4. Be delivered to the Acorn D-REIT Manager.
12.1.5. No business shall be transacted at any meeting of Security Holders unless the requisite quorum is
present at the commencement of the meeting. The quorum of the meeting shall be the holders of
at least ten percent (10%) of the Units issued at the date of the calling of the meeting present in
person or by proxy except in the case of a meeting to pass a Special Resolution in such case the
quorum shall be a minimum of Security Holders present in person or by proxy representing the
holders of at least twenty five percent of the Units issued at the date of the calling of the meeting.
12.1.6. If within half an hour from the time appointed for the meeting a quorum is not present, the meeting
shall be dissolved and shall stand adjourned to such a day and time not being less than seven days
thereafter and to such a place as may be appointed by the chairman if any has been appointed or
otherwise by the Trustee or the Acorn D-REIT Manager.
12.1.7. If at such adjourned meetings a quorum is not present within fifteen minutes from the time
appointed for the meeting, the Security Holders present shall comprise the quorum.
12.1.8. Notice of any adjourned meeting of holders shall be given and such notice shall state that the holders
present at the adjourned meeting whatever their number and the number of Units held by such
holder or holders shall form a quorum.
12.1.9. The Trustee shall keep or cause to be kept minutes of every meeting in a minute book.
11.2. Voting Rights of the Security Holders
12.2.1. At any meeting a resolution put to the vote shall be decided on a show of hands unless a poll is,
before or on the declaration of the results of the show of hands, demanded by the Trustee or by
Security Holders not less than one tenth of the Units in Issue present in person or by proxy.
12.2.2. On a show of hands, every Security Holder who, being an individual is present in person or being a
corporation, is present by its representative duly authorized in that regard, shall have one vote. If
the number of votes recorded in favour or against a resolution on a show of hands is not conclusive
evidence of a unanimous vote or by a particular majority or lost, a poll may be demanded.
12.2.3. Votes may be given either personally or by proxy and the voting rights attached to each shall be such
proportion of the voting rights attached to all of the Units in Issue.
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12.2.4. In the case of joint Security Holders of a Unit, the vote of the senior who tenders a vote, whether in
person or by proxy, shall be accepted to the exclusion of the votes of the other joint Security Holders
and for this purpose, seniority shall be determined by the order in which the names stand in the
register of Security Holders.
12.2.5. A Security Holders entitled to attend and vote at a meeting of the Acorn D-REIT is entitled to appoint
another person to attend and vote in his place whether such a person is a Security Holder or not.
Every notice calling a meeting of the Security Holders in Acorn D-REIT shall contain a prominent
statement citing this fact.
12.2.6. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney
duly authorized in writing or if the appointer is a cooperation, under the hand of an officer or
attorney duly authorized. A proxy need not be a Security Holder.
12.2.7. An instrument appointing a proxy shall be in the usual common form or such form as may be
submitted with the notice convening the meeting.
12.2.8. The instrument appointing a proxy shall be deemed to confer authority to demand or join in
demanding a poll.
12.2.9. An instrument appointing a proxy or any other document necessary to show the validity of or
otherwise relating to, the appointment of a proxy shall be required to be received by the Acorn D-
REIT Manager or the Trustee, as the case may be, at least 48 hours before the meeting or adjourned
in order that the appointment may be effective. In default the instrument of proxy shall not be
treated as valid.
12.2.10. Resolutions shall be passed by a simple majority of the votes validly cast at a general meeting of
Security Holders except for Special Resolutions as provided under the Act.
12.2.11. Connected parties are not permitted to exercise voting rights in respect of Units held by them
11.3. Taxation
From a fiscal perspective, the Acorn D-REIT is an efficient and optimal vehicle for its intended objectives. As a
REIT, it will enjoy many tax advantages that make it attractive for investors who are seeking long term,
sustainable and optimised returns. We have analysed the various tax implications that would be triggered by
the operation of the Acorn D-REIT below: -
I. Value Added Tax (VAT) - The transfer of partnership interests to the Acorn D-REIT would be exempt
from tax.
II. Stamp Duty - The transfer of real estate to the Acorn D-REIT would be exempt from stamp duty subject
to the transferor being allocated Units in the Acorn D-REIT as consideration.
In addition, the transfer of real estate from one trustee to another trustee would be exempt from
stamp duty. This will be applicable, where Acorn D-REIT transfers completed PBSA properties to Acorn
I-REIT.
III. Income Tax - The income of a D-REIT and that of its investee companies is exempt from income tax.
This is subject to Section 20 of the Income Tax Act (ITA), which provides that the income of a real estate
investment trust and that of its investee company which are registered by the Commissioner will be
exempt from income tax except for the payment of withholding tax on interest income and dividends
to its Security Holders or shareholders who are not exempt persons.
Further, Section 20(2) provides that all distributions of income, and all payments for redemption of
Units or sale of shares received by Security Holders or shareholders shall be deemed to have been
already tax paid. Consequently, the Security Holders and shareholders will not be liable to pay any tax
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on the income received from the Acorn D-REIT, on payment from redemption of Units and on the sale
of shares.
In order for the Commissioner to register a D-REIT and its investee company as per Section 20, the D-
REIT and its investee company require to meet certain qualifications as outlined below: -
a. Undertake its portfolio investment in accordance with the policies and guidelines under the
Capital Markets Act;
b. Carry on investments on behalf of its Security Holders and shareholders;
c. After six months of commencement, no Security Holder shall own or be capable of holding
more than twelve and one-half percent of the Units or shares in the Acorn D-REIT or in its
investee company, and
d. It will, within six months of commencement and thereafter, maintain at least twenty-five
Security Holders.
The CMA drafted the Income Tax (Real Estate Investment Trust) Rules, 2020 which outline the Rules
that the REIT needs to comply with in-order for its income to be exempt from tax. Once the Rules
become law, the qualifications reflected under c. and d. above will no longer apply to REITs when
seeking income tax exemption under Section 20 of the ITA.
11.4. Material contracts

The Trustee and the REIT Manager have entered into an Agreement dated 16th December 2020 for the
provision of REIT Management services by the REIT Manager to the Acorn D-REIT.
The REIT Manager has entered into a contract with AMSL, a property manager, dated 16th December 2020 for
the provision of Property Management services to the REIT.
The Promoter and the Project Manager Certifier entered into an Agreement dated 10th September 2020 for
the provision of project management certification to the Trustee and the REIT Manager.
In addition to the above, refer to section 6.2 of the legal opinion.
11.5. Consents
The following advisors to the Transaction have given their consent to being named and/or the inclusion of their
respective expert opinions in the Offering Memorandum in the form and context in which their names appear:
Name Role
Acorn Holdings Limited Promoter
Renaissance Capital Kenya Limited Lead Transaction Advisor, Sponsoring Broker & Placing Agent
Viva Africa Consulting LLP Tax Advisors
Triple OK Advocates LLP Legal Advisors
Gowling WLG International Legal Advisors
The Co-operative Bank of Kenya Limited Trustee
PricewaterhouseCoopers LLP Reporting Accountants
Acorn Investment Management Limited REIT Manager
Acorn Management Services Limited Property Manager
Page | 123
Tysons Limited Valuer

Aegis Development Solutions Limited Project Manager Certifier
11.6. Documents available for inspection

On giving fourteen days’ written notice to the Trustee, copies of the following documents will be available for
inspection on any business day for a period of not less than three years from the date of the approval of the
Offering Memorandum by the Authority, at the registered office of the Trustee or such other address as the
Authority may approve and subsequently shall be made available [in a digital format] by the Trustee for
inspection for a period of not less than eight years from the date of approval.
a) the Trust Deed;
b) the Investment Policy;
c) each contract disclosed in the Prospectus, including:
• agreement with the REIT Manager
• agreement with the Property Manager
• and in the case of a contract not reduced to writing, a memorandum setting out the parties, date
and full particulars;
d) all valuation reports obtained in respect of the real estate assets;
e) legal opinions;
f) reporting accountant report;
g) certification from the project manager certifier;
h)
i) audited financial statements for the Trustee and REIT Manager for whichever is the later of the three
years prior to the date of approval of the Offering Memorandum or from the date of formation of the
entity;
j) all reports, letters, opinions or other documents and statements by any expert, any part of which is
extracted in or summarized in or referred to in the Prospectus and where an extract or summary is
included the corresponding full report shall be made available for inspection;
k) signed and dated consents given by any experts and copies of any withdrawals of consents (if any);
l) copies of any court orders or other documents relating to court actions commenced against the Trustee
or the REIT Manager in the previous three years relating respectively, to the conduct of their duties as a
Trustee or REIT Manager;
m) approvals (and all exemptions therein) from the Authority;
n) copy of the approved Offering Memorandum for the Acorn D REIT;
o) Offering Memorandum for the Green Bond programme together with all the pricing supplements for
the different tranches;
p) The two sale agreements for LLP named Ashvale Properties LLP (Ashvale LLP); and
q) All the title documents where the properties have been transferred to the relevant LLPs
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PART 12: LEGAL OPINION
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PART 13: PRO-FORMA FINANCIAL INFORMATION
“FOR ILLUSTRATIVE PURPOSES ONLY BASED ON A NUMBER OF ASSUMPTIONS THAT MAY

OR MAY NOT EVENTUATE.”
Page | 157
ACORN D-REIT
PROFORMA FINANCIAL INFORMATION
FOR THE PERIOD ENDING 31 DECEMBER 2020 AND YEAR ENDING 31 DECEMBER
2021
Acorn D-REIT
Proforma financial information
For the period ending 31 December 2020 and year ending 31 December 2021
Table of contents Page No
Independent assurance report 2-3
Proforma financial information:
Proforma statement of profit or loss and other comprehensive income 4
Proforma statement of financial position 5
Proforma statement of changes in unit-holder balances 6
Proforma statement of cash flows 7
Notes 8 - 23
1
The Directors
Acorn Holdings Limited
2nd Floor, Acorn House
James Gichuru Road
Nairobi, Kenya
Independent auditor’s reasonable assurance report on the proforma financial information of

Acorn Student Accommodation Development Real Estate Investment Trust
Opinion
We have undertaken a reasonable assurance engagement on the compilation of the accompanying

proforma financial information of Acorn Student Accommodation Development Real Estate Investment
Trust (the “REIT” / “Acorn D-REIT”) set out on pages 4 to 23 comprising the proforma statement of financial
position at 31 December 2020 and 31 December 2021, the proforma statements of profit or loss and other
comprehensive income, cash flows and changes in unit-holder balances for the periods then ended, and
a summary of the underlying assumptions, in accordance with International Standards on Assurance
Engagements.
In our opinion, the proforma financial information has been properly compiled on the basis of the
assumptions set out in the Notes and the basis of accounting used is consistent with the accounting
policies set out in the Notes.
Basis for opinion
We conducted our reasonable assurance engagement in accordance with International Standard on

Assurance Engagements 3000, Assurance Engagements Other Than Audits Or Reviews Of Historical
Financial Information ('ISAE 3000'), issued by the International Auditing and Assurance Standards Board.
We have complied with the independence and other ethical requirements of the International Code of
Ethics for Professional Accountants (including International Independence Standards) issued by the
International Ethics Standard Board for Accountants (IESBA Code), which is founded on fundamental
principles of integrity, objectivity, professional competence and due care, confidentiality and professional
behavior.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Management’s responsibility for the proforma financial information
Management is responsible for the preparation and presentation of the proforma financial information,
including the assumptions and accounting policies set out in the Notes on which they are based. This
responsibility includes the design, implementation and maintenance of internal control relevant to the
preparation of the proforma financial information that is based on the accompanying assumptions.
Auditor’s responsibility for the audit of the proforma financial information
Our responsibility is to provide the opinion required by Capital Markets (Real Estate Investment Trusts)
(Collective investment Schemes) Regulations, 2013. We conducted our reasonable assurance
engagement in accordance with International Standard on Assurance Engagements 3000, Assurance
Engagements Other Than Audits Or Reviews Of Historical Financial Information ('ISAE 3000'), issued by
the International Auditing and Assurance Standards Board.
PricewaterhouseCoopers LLP. PwC Tower, Waiyaki Way/Chiromo Road, Westlands

P O Box 43963 – 00100 Nairobi, Kenya
T: +254 (20)285 5000 F: +254 (20)285 5001 www.pwc.com/ke
Partners: E Kerich B Kimacia M Mugasa A Murage F Muriu P Ngahu R Njoroge S O Norbert’s B Okundi K Saiti
Independent auditor’s reasonable assurance report on the proforma financial information of
Acorn Student Accommodation Development Real Estate Investment Trust (continued)
Auditor’s responsibility for the audit of the proforma financial information (continued)
Acorn D-REIT
Proforma statement of profit or loss and other comprehensive income
Note Period Year

ended 31 ended 31
December December
2020 2021
Shs’000 Shs’000
Revenue
Gain on disposal of property 4.3 - 184,231
Rental income 4.1 - 142,953
Rental expenses
Property management fees 4.2 - (8,148)
Marketing fees 4.2 - (2,395)
Other operating costs 4.2 - (45,902)
Net rental income - 86,508
Other expenses
Set up costs 4.4 (112,167) -
Management fees 4.4 - (106,061)
Administrative expenses 4.4 - (64,456)
Finance costs 4.9 - (102,629)
(112,167) (273,146)
Loss before income tax (112,167) (2,407)
Income tax expense 4.5 - -
Loss for the period/ year (112,167) (2,407)
Other comprehensive income, net of tax - -
Total comprehensive loss for the period/ year (112,167) (2,407)
4
Acorn D-REIT
At 31 December 2020 and 31 December 2021
Proforma statement of financial position
5
Acorn D-REIT
At 31 December 2020 and 31 December 2021
Proforma statement of changes in unit-holder balances
Note Unit-holders’ Accumulated Total

contributions losses
Shs’000 Shs’000 Shs’000
Period ended 31 December 2020
At start of period - - -
Transactions with unit-holders

Proceeds from offer 4.11 4,215,826 - 4,215,826
Total comprehensive loss for the period - (112,167) (112,167)
At end of period 4,215,826 (112,167) 4,103,659
Year ended 31 December 2021
At start of year 4,215,826 (112,167) 4,103,659
Transactions with unit-holders

Proceeds from offer 4.11 198,618 - 198,618
Total comprehensive loss for the year - (2,407) (2,407)
At end of year 4,414,444 (114,574) 4,299,870
6
Acorn D-REIT
Proforma statement of cash flows
Note 2020 2021

Shs’000 Shs’000
Cash flow from operating activities
Loss before income tax (112,167) (2,407)

Gain on disposal of investment property 4.3 - (184,231)
Interest expense on borrowed funds - 102,629
Changes in working capital

Trade and other receivables - (6,798)
Trade and other payables 171,355 23,203
Net cash flows from operating activities 59,188 (67,604)
Cash flows from investing activities
Purchase and development of properties 4.6 (5,355,940) (3,045,919)

Proceeds from sale of property 4.3 - 1,746,879
Net cash flows from investing activities (5,355,940) (1,299,040)
Cash flows from financing activities
Proceeds from borrowed funds 4.9 1,252,281 2,120,050

Repayment of borrowed funds 4.9 - (776,105)
Interest paid on borrowed funds - (102,629)
Unit-holders’ contributions 4.11 4,215,826 198,618
Net cash flows from financing activities 5,468,107 1,439,934
Net increase in cash and cash equivalents 171,355 73,290
Cash and cash equivalents at start of period/ year - 171,355
Cash and cash equivalents at end of period/ year 171,355 244,645
7
Acorn D-REIT
Notes
1 General information
The Acorn D-REIT shall be domiciled in Kenya and the address of its registered office shall be:
Acorn Student Accommodation Development REIT
Acorn House, 2nd floor
97 James Gichuru Rd, Lavington
P.O Box 13759 – 00100
Nairobi
Acorn D-REIT build plan
The Acorn D-REIT build plan comprises 11 properties which will be at various stages of construction over
the foreseeable future. The properties are for student accommodation under the Qwetu and Qejani brands.
The Qwetu student accommodation is the middle-income brand. Qejani student accommodation will be
offered at a lower price point but still provide the essential standards of quality, security and cleanliness as
the Qwetu product. The following table shows the year in which the projects were started or expected to be
started.
Year 2017 2019 2021 Total
Qwetu Qwetu USIU Rd 3 Qwetu Bogani East 1 Qwetu Hurlingam 2 7

projects Qwetu USIU Rd 4 Qwetu Chiromo 1 Qwetu 2021
Qwetu Hurlingham 1
Qejani Qejani Bogani East 2 Qejani 2021 4

projects Qejani Chiromo 1 Qejani 2021
Total 3 4 4 11
There were no projects commenced in 2018 and 2020.
Of the 11 properties, the projects estimated to be complete by the end of 2021 are:
● Qwetu USIU Rd 3 – Completion date of November 2020

● Qwetu USIU Rd 4 – Completion date of April 2021
● Qwetu Hurlingham 1 – Completion date of August 2021
Project funding
The projects shall be funded from four sources: funds raised from the offer (unit-holders’ contributions),
Medium Term Note (MTN), bank loans and net proceeds from sale to the Acorn Student Accommodation
Income REIT (I-REIT).
8
Acorn D-REIT
Notes (continued)
1 General information (continued)
Project funding (continued)
i) Funds raised from the offer/unit-holders’ contributions
The total proceeds expected from the Acorn D-REIT issue by 2021 is Shs 4,417,678,000 as per the table
below. The proceeds shall be used to fund the development of real estate properties and initial set up costs.
Total raise 2020 2021

Shs’000 Shs’000 Shs’000
D-REIT issue 4,414,444 4,215,826 198,618
Following the initial capital raise of Shs 4,215,826,000 in 2020, the next capital raise is planned for
Quarter 2 of 2021. The Promoter does not expect the unit holders from the Initial Offer to consider
subscribing to additional units soon after the Initial Offer. However, this option can be availed if of interest
to unit-holders.
ii) Medium Term Note (MTN)
In October 2019, Acorn Holdings Limited issued a Green Bond for Shs 5 billion. The total subscription
achieved was Shs 4.3 billion, out of which Shs 3.5 billion was to provide financing for 5 of the projects that
form the initial properties that are being taken over by the Acorn D-REIT. The remaining balance of Shs 0.8
billion funded Qwetu Wilson View which was launched in February 2020. Following the establishment of
the Acorn D-REIT, the Green Bond proceeds will form part of the debt financing in the Acorn D-REIT.
iii) Bank loans
There are no current agreements in place with respect to the bank loans and interest on the bank loans is
expected to be at the average market rate at the point of borrowing.
iv) Net sales proceeds from the I-REIT
Proceeds from the sale of completed properties to the I-REIT will be reinvested into the D-REIT.
The Acorn D-REIT’s funding is structured as follows:
Project Estimated Debt Debt Unit- Net sales % of Estimated

total project (MTN) (Bank) holders’ proceeds completion point of
cost to contribution as at Dec transfer to
completion 2021* I-REIT
Shs’000 Shs’000 Shs’000 Shs’000 Shs’000
Qwetu USIU Rd 3 1,562,648 776,105 - 786,543 - 100% Jun 2021
Qwetu USIU Rd 4 1,312,469 560,896 - 728,273 23,300 90% Mar 2022
Qwetu Hurlingham 1 1,819,150 824,521 - 900,179 94,450 88% June 2022
Qwetu Bogani East 1 1,082,743 - 533,979 438,027 110,737 65% Mar 2023
Qejani Chiromo 1,580,699 857,645 - 475,962 247,092 54% June 2023
Qwetu Chiromo 1,659,287 805,758 - 651,507 202,022 61% Mar 2023
Qejani Bogani East 1 697,724 - 380,459 247,147 70,118 62% Mar 2023
Qwetu Hurlingham 2 1,295,940 - 745,388 74,639 475,913 21% Mar 2024
Qwetu 2021 1,295,940 - 745,388 - 550,552 16% June 2024
Qejani 2021** 2,630,390 - 1,519,518 - 1,110,872 15% Sep 2024
Total 14,936,990 3,824,925 3,924,732 4,302,277 2,885,056
*See utilisation of funds under note 4.6

**Qejani 2021 will comprise of two projects
9
Acorn D-REIT
Notes (continued)
1 General information (continued)
Project funding (continued)
The funding to be utilised for developing projects and initial set up costs in the period ending 31 December
2021 comprises unit-holder contributions of Shs 4,414,444,000 less set up costs of Shs 112,167,000 (refer
to Note 4.11), MTN debt of Shs 2,840,635,000 less the amount repaid in 2021 of Shs 776,105,000 and
bank debt of Shs 531,696,000 (Refer to Note 4.9).
Period covered by the proforma financial information
The financial information presented is up to 31 December 2021 in line with the CMA requirement for
inclusion of proforma financial information, based on forecasts for the next full year of operation.
The information is an extract of the Acorn D-REIT’s 10-year investment model which has been availed and
shared with investors. As per the investment model, it is projected that 2 of the projects will be completed
in 2022, and 4 projects to be completed in each of 2023 and 2024. The first distribution/dividend payment
to unit-holders is projected to made in 2023.
Impact of COVID-19
The COVID-19 pandemic has disrupted learning for students worldwide. To curb the spread of the virus in
learning institutions, the Government of Kenya closed all learning institutions starting the week of 16 March
2020. Since the outbreak of the pandemic, Kenya’s economic growth has been negatively impacted by
COVID-19, directly and indirectly affecting the ability of parents and students to afford education-related
expenditure both now and in the near future. The Government has urged universities to roll out online
classes. As a result, online learning through Zoom meetings, Google Classroom and Cisco Webex is
successfully picking up, mostly in leading private universities such as the United States International
University-Africa and Strathmore University, as well as in some departments at higher-ranking public
universities, such as the University of Nairobi, Kenyatta University, Jomo Kenyatta University of Agriculture
and Technology, and Egerton University.
COVID-19 disrupted the construction plan due to social distancing measures, with only a few contractors
being available on site and more costs being incurred due to the deployment of nurses on site, to monitor
the health status of the contractors. As at the date of the report, some universities had opened for physical
classes hence an increase in the occupation rates.
In preparing the proforma financial information, the Directors have assumed that occupation of Qwetu USIU
Rd 3 will start in January 2021. The Directors do not, therefore, expect a significant adverse impact on
projected revenue.
10
Acorn D-REIT
Notes (continued)
2 Significant accounting policies
a) Basis of preparation
The proforma financial information has been prepared by management on the basis of the assumptions set out
below and in accordance with International Financial Reporting Standards (IFRSs) and The Capital Markets Act
Cap 485A (The Capital Markets Real Estate Investment Trust) (Collective Investment Schemes) Regulations,
2013.
The preparation of financial information in conformity with IFRS requires the use of certain critical accounting
estimates. It also requires management to exercise judgement in the process of applying the REIT’s accounting
policies. The areas involving a higher degree of judgement or complexity, or where assumptions and estimates
are significant to the financial information, are disclosed in Note 3.
Measurement basis
The measurement basis used is the historical cost basis except where otherwise stated in the accounting policies
summarised below.
Under the historical cost basis, assets are recorded at the amount of cash or cash equivalents paid or the fair
value of the consideration given to acquire them at the time of their acquisition. Liabilities are recorded at the
amount of proceeds received in exchange for the obligation or, in some cases, at the amounts of cash or cash
equivalents expected to be paid to satisfy the liability in the normal course of business.
For those assets and liabilities measured at fair value, fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. When measuring the fair value of an asset or a liability, the Acorn D-REIT uses market observable data as
far as possible. If the fair value of an asset or a liability is not directly observable, it is estimated by the Acorn D-
REIT using valuation techniques that maximise the use of relevant observable inputs and minimise the use of
unobservable inputs (e.g. by use of the market comparable approach that reflects recent transaction prices for
similar items or discounted cash flow analysis). Inputs used are consistent with the characteristics of the asset /
liability that market participants would take into account.
Fair values are categorised into three levels in a fair value hierarchy based on the degree to which the inputs to
the measurement are observable and the significance of the inputs to the fair value measurement in its entirety:
• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for
identical assets or liabilities.
• Level 2 fair value measurements are those derived from inputs other than quoted prices included within
Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived
from prices).
• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the
asset or liability that are not based on observable market data (unobservable inputs).
The REIT recognises transfers between levels of the fair value hierarchy at the end of the reporting period during
which the change occurred.
b) Foreign currency translation
i) Functional and presentation currency
The financial information of the Acorn D-REIT is measured using the currency of the primary economic
environment in which the entity operates (the “functional currency”). The financial information is presented in
Kenya Shillings, which is the Acorn D-REIT’s functional and presentation currency.
11
Acorn D-REIT
Notes (continued)
2 Significant accounting policies (continued)
b) Foreign currency translation (continued)
ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates
of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and
from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange
rates, are generally recognised in profit or loss.
All foreign exchange gains and losses are presented in profit or loss on a net basis within other gains/(losses).
Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or
loss.
c) Revenue recognition
Revenue is measured at the fair value of the consideration receivable, and represents amounts receivable under
the agreed contract, stated net of value-added tax (VAT) and discounts.
The Acorn D-REIT recognises revenue when the amount of revenue can be reliably measured, it is probable
that future economic benefits will flow to the Acorn D-REIT and when specific performance obligations have
been met for each of the Acorn D-REIT’s activities as described below. The Acorn D-REIT bases its estimates
on historical results, taking into consideration the type of customer, the type of transaction and the specifics of
each arrangement.
Revenue is recognised as follows:
(i) Gains from the sale of properties to the I-REIT are recognised as revenue in the period in which the
transaction is completed.
(ii) Rental, service charge and related fees are recognised when earned. These are recognised on a straight-
line basis over the lease term.
(iii) Interest income is recognised on a time proportion basis using the effective interest method, in line with IFRS
9.
d) Investment property
Investment property is property held to earn rentals or for capital appreciation or both. Investment property,
which can include right-of-use assets, is initially recognised at cost including the transaction and borrowing costs
where applicable. Subsequently, investment property is carried at fair value representing the open market value
at the statement of financial position date determined by annual valuations carried out by external registered
valuers/directors.
Properties under construction and development sites with projected use as investment property are valued at
projected fair values taking into account current market conditions. Investment properties under construction for
which the fair value cannot be determined reliably, but for which the REIT expects that the fair value of the
property will be reliably determinable when construction is completed, are measured at cost less impairment
until the fair value becomes reliably determinable or construction is completed - whichever is earlier.
12
Acorn D-REIT
Notes (continued)
d) Investment property (continued)
Gains or losses arising from changes in the fair value are included in determining the profit or loss for the period
to which they relate. Subsequent expenditure on investment property where such expenditure increases the
future economic value in excess of the original assessed standard of performance is added to the carrying
amount of the investment property. All other subsequent expenditure is recognised as an expense in the year in
which it is incurred.
Valuations are performed as of the financial position date by professional valuers who hold recognised and
relevant professional qualifications and have recent experience in the location and category of the investment
property being valued. These valuations form the basis for the carrying amounts in the proforma financial
information.
Gain and losses on disposal of investment property are determined by comparing the proceeds from the
disposal with the carrying amount of the investment property and are recognised net in profit or loss.
e) Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits held at call with banks. For purposes of the
statement of cash flows, cash and cash equivalents comprise of cash and cash equivalents as defined above,
net of outstanding bank overdrafts.
f) Taxation
The Acorn D-REIT’s income is not subject to tax as it has been granted exemption by statute. Therefore no
provision for current income tax or deferred income tax is made in the proforma financial information.
g) Provisions
Provisions are recognised when the Acorn D-REIT has a present legal or constructive obligation as a result of
past events, it is probable that an outflow of resources will be required to settle the obligation and the amount
has been reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the
obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks
specific to the obligation. The increase in the provision due to passage of time is recognised
as interest expense.
h) Payables
Payables are obligations to pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or
in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Payables are recognised initially at fair value and subsequently measured at amortised cost.
i) Tenant deposits
Tenant deposits consist of rent and service charge refundable deposits received from tenants. Tenant
deposits are classified as current liabilities and are recognised initially at fair value and subsequently at amortised
cost using the effective interest method.
13
Acorn D-REIT
Notes (continued)
j) Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently
stated at amortised cost; any differences between proceeds (net of transaction costs) and the redemption value
is recognised in profit or loss over the period of the borrowings, using the effective interest method.
Borrowings are classified as current liabilities unless the REIT has an unconditional right to defer settlement of
the liability for at least 12 months after the end of the reporting period.
k) Borrowings costs
Borrowing costs, net of any temporary investment income on those borrowings, that are attributable to acquisition,
construction or production of a qualifying asset are capitalised as part of the asset. The net borrowing cost
capitalised is either the actual borrowing cost incurred on the amount borrowed specifically to finance the asset; or
in the case of general borrowings, the borrowing cost is determined using the overall weighted average cost of the
borrowings on all outstanding borrowings during the year less any specific borrowings directly attributable to the
asset and applying this rate to the borrowing attributable to the asset. Capitalisation of borrowing costs ceases
when all activities necessary to prepare the qualifying asset for its intended use or sale are complete. All other
borrowing costs are recognised in profit or loss in the period in which they are incurred.
l) Unit-holder contributions
Unit-holder contributions are recognised as the proceeds received, net of direct issue costs. Incremental costs
directly attributable to the issue of units, net of any tax effects, are recognised as a reduction from the
contributions.
m) Distributions
The Acorn D-REIT shall distribute earnings subject to the provisions of the Capital Markets (Real Estate
Investment Trusts) (Collective Investment Schemes) Regulations 2013.
Under the Regulations of CMA, the Acorn D-REIT is not required to make annual distributions to the unit-holders.
However, the REIT Manager may recommend to the Trustee and the Trustee may distribute any realized capital
gains to the Acorn D-REIT unit-holders if and when the capital gains are realized. The Acorn D-REIT intends to
make use of the cash raised from exiting completed, stabilized projects in two ways. For:
i) reinvestment into new schemes/projects; and

ii) majority of the income for distribution to unit-holders.
14
Acorn D-REIT
Notes (continued)
m) Distributions (continued)
It is the Acorn D-REIT’s intention to distribute all realized capital gains to unit-holders after taking into
consideration the required working capital and expenses for the Acorn D-REIT.
n) Financial instruments
Initial recognition
Financial instruments are recognised when, and only when, the Acorn D-REIT becomes party to the contractual
provisions of the instrument. All financial assets are recognised initially using the trade date accounting which is
the date the Acorn D-REIT commits itself to the purchase or sale.
Classification
The Acorn D-REIT classifies its financial instruments at amortised cost. Financial assets that are classified and
measured at amortised cost are held within a business model whose objective is to hold assets in order to collect
contractual cash flows, and for which the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial instruments for the Acorn D-REIT comprise of cash with banking institutions, trade and other receivables,
trade and other payables and borrowings.
Initial measurement
On initial recognition;
i) Financial assets or financial liabilities are measured at fair value.

ii) Trade receivables are measured at their transaction price.
iii) All other categories of financial assets and financial liabilities are measured at the fair value plus or minus
transaction costs that are directly attributable to the acquisition or issue of the instrument.
Subsequent measurement
Financial assets and financial liabilities after initial recognition are measured at amortised cost. Amortised cost
is the amount at which the financial asset or liability is measured on initial recognition minus principal
repayments, plus or minus the cumulative amortisation using the effective interest method of any difference
between the initial amount and the maturity amount and, for financial assets, adjusted for any loss allowance.
Impairment
The Acorn D-REIT recognises a loss allowance for expected credit losses on financial assets that are measured
at amortised cost. The loss allowance is measured at an amount equal to the lifetime expected credit losses for
trade receivables and for financial instruments for which: (a) the credit risk has increased significantly since initial
recognition; or (b) there is observable evidence of impairment (a credit-impaired financial asset). If, at the
reporting date, the credit risk on a financial asset other than a trade receivable has not increased significantly
since initial recognition, the loss allowance is measured for that financial instrument at an amount equal to 12-
month expected credit losses. All changes in the loss allowance are recognised in profit or loss as impairment
gains or losses.
Lifetime expected credit losses represent the expected credit losses that result from all possible default events
over the expected life of a financial instrument. 12-month expected credit losses represent the portion of lifetime
expected credit losses that result from default events on a financial asset that are possible within 12 months
after the reporting date.
15
Acorn D-REIT
Notes (continued)
n) Financial instruments (continued)
Impairment (continued)
Expected credit losses are measured in a way that reflects an unbiased and probability-weighted amount
determined by evaluating a range of possible outcomes, the time value of money, and reasonable and
supportable information that is available without undue cost or effort at the reporting date about past events,
current conditions and forecasts of future economic conditions.
Presentation
All financial assets are classified as non-current except those with maturities of less than 12 months from the
balance sheet date, those which management has the express intention of holding for less than 12 months from
the balance sheet date or those that are required to be sold to raise operating capital, in which case they are
classified as current assets.
All financial liabilities are classified as non-current except, those expected to be settled in the Acorn D-REIT's
normal operating cycle, those payable or expected to be paid within 12 months of the balance sheet date and
those which the Acorn D-REIT does not have an unconditional right to defer settlement for at least 12 months
after the financial reporting date.
Derecognition/write off
Financial assets are derecognised when the rights to receive cash flows from the financial asset have expired,
when the Acorn D-REIT has transferred substantially all risks and rewards of ownership, or when the Acorn D-
REIT has no reasonable expectations of recovering the asset.
Financial liabilities are derecognised only when the obligation specified in the contract is discharged or cancelled
or expires.
Offsetting
Financial assets and liabilities are offset, and the net amount reported in the statement of financial position only
when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on
a net basis, or realise the asset and settle the liability simultaneously. The legally enforceable right must not be
contingent on future events and must be enforceable in the normal course of business and in the event of default,
insolvency or bankruptcy of the Acorn D-REIT or the counterparty.
16
Acorn D-REIT
Notes (continued)
3 Critical accounting estimates and assumptions
In the process of applying the accounting policies adopted by the Acorn D-REIT, the Directors make certain
judgements and estimates that may affect the amounts recognised in the Acorn D-REIT’s financial information.
Such judgements and estimates are based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the current circumstances. However, actual results may
differ from those estimates. The judgements and estimates are reviewed at each financial reporting date to
ensure that they are still reasonable under the prevailing circumstances based on the information available, and
any revisions to such judgements and estimates are recognised in the year in which the revision is made.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities are addressed below.
Valuation of investment property
Critical assumptions are made in determining the value of investment property. The fair value of the properties
of the Acorn D-REIT are determined by an independent professionally qualified valuer or the REIT Manager who
is qualified to perform such a valuation.
The best evidence of fair value is current prices in an active market for similar properties. Where such information
is not available, information is considered from a variety of sources including discounted cash flow projections
or capitalised income projections based on a property’s estimated net market income and a capitalisation rate
derived from an analysis of market evidence.
The properties have been valued on the basis of market value. The valuation model for Qwetu USIU Rd 3, Qwetu
USIU Rd 4 and Qwetu Hurlingham 1 considers the annual net rental incomes to be generated from the properties
taking into account expected rental growth, occupancy rates and other costs not paid by tenants. The fair value
is then derived using a reasonable capitalization rate.
The following assumptions have been made with respect to the valuations:
• an industry capitalisation rate (yield) of 8% was adopted in capitalising incomes to arrive at the market
value, and
• the occupancy rates and rental rates used were obtained by benchmarking with other similar developments.
The assumptions to which the valuations are most sensitive are:
• Capitalisation rate - The application of the capitalisation rate and sensitivity analysis is disclosed in more
detail in Note 4.3, and
• Occupancy rate - The average occupancy and the room rates used in the computation of revenue are
based on a curve developed through experiences of existing properties managed by Acorn Management
Services Limited. The impact of COVID-19 has also been taken into consideration in the assumptions
used by management in the expected occupancy for completed projects. The occupancy rate assumption
and sensitivity analysis are disclosed in more detail in Note 4.1.
17
Acorn D-REIT
Notes (continued)
4 Assumptions used in deriving Proforma financial information
4.1 Rental income
Rental income is estimated based on the average occupancy rate, blended room rate and number of operating
months. The assumptions applied in arriving at rental income are tabulated below.
Qwetu USIU Qwetu USIU Qwetu Total

Rd 3 Rd 4 Hurlingham 1
Expected completion month Nov 2020 April 2021 Aug 2021
Residential
Number of beds 697 601 832
Number of rooms 518 450 583
Blended room rate (Shs) 30,370 29,361 30,799
2021 average occupancy 63% 66% 37%
2021 operating months 6 7 3
Residential revenue (Shs) 59,071,783 60,843,563 20,146,632 140,061,978
Retail
Average rent per month (Shs) 579,800 115,200 163,800
2021 average occupancy 63% 66% 37%
2021 operating months 6 7 3
Retail revenue (Shs) 2,177,149 530,496 183,784 2,891,429
Total revenue (Shs) 61,248,932 61,374,059 20,330,416 142,953,407
Sensitivity analysis - change to projected residential rental income for the year ending 31 December
2021
Changes in the following assumptions could affect the reported rental income for the year ending 31 December
2021. We have summarized in the table below the increases/decreases in rental income for each of the below
factors while holding all other factors constant.
• A 5% change in the projected room rates

• A 10% change in the projected average residential occupancy
• Change in the expected completion time of the projects by 2 months, thus a change in expected operating
months
Base assumption Increase Decrease

Shs’000 Shs’000 Shs’000
Change in projected room rates: +/-5% 142,953 7,003 (7,003)
Change in the projected average occupancy rate:
+/-10% 142,953 14,006 (14,006)
Change in completion time; +/-2 months 142,953 (30,815)
22,123
18
Acorn D-REIT
Notes (continued)
4 Assumptions used in deriving Proforma financial information
4.2 Project related expenses
These are expenses related to the projects that will be completed in 2020 and 2021.
Type of expense Rate applied Comments

Property 5% Property management fee is the fee to be paid to the property
management fees manager for management services. The fee is estimated at five
percent (5%) of gross income attributable to the housing units at the
project.
Marketing fees 1.5% Marketing fees are meant to cover marketing expenses in letting of
the property and ensuring that the occupancy is maintained. Since
the properties do not have any marketing staff, the cost is borne by
the management company and recharged to the property at an
estimated rate of 1.5% of the revenue plus VAT.
Other operating costs include staff costs, utility expenses, consumer experience costs, central costs, cleaning
and consumable expenses. These are estimated based on the existing properties that are in operation. The
estimates are made according to the size of the property.
4.3 Gain on disposal of property
Qwetu USIU Rd 3 will be opened for rentals in January 2021, operated by the D-REIT for 6 months during the
stabilisation period and then sold to the I-REIT in June 2021. The REIT Manager has performed a desk-top
valuation of the property at the time of sale to the I-REIT, using the income capitalisation approach. Under this
approach, an overall capitalisation rate is applied to representative single period income. The capitalization rate
is derived from analysis of market transactions in relation to rental incomes for similar properties. The gain on
disposal is calculated as below;
Description Shs’000 Comments

Net operating income (NOI) 139,750 This is estimated net rental income (revenue less
operating expenses) for the immediate year following
transfer to the I-REIT.
Capitalisation rate 8% This capitalisation rate estimates the potential rate of
return on the Qwetu USIU Rd 3 property. This is based
on the average market rate.
Valuation/ expected 1,746,879 This is Net Operating Income (NOI) divided by the
proceeds from disposal capitalisation rate
Less total capitalised costs (1,562,648) This is the total capitalised project cost as at 31 Dec
by 2021 2020 of Shs 1,312,836,000 plus costs incurred during
stabilisation, and the defects and liability period in 2021.
Gain on disposal 184,231
Sensitivity analysis - change to projected gain on disposal or the year ending 31 December 2021
Changes in the above assumptions could affect the forecasted gain on disposal for the year ending 31 December
2021. We have summarized in the table below the increases/decreases in gain on disposal for each of the below
factors while holding all other factors constant.
• A 0.5% change in the projected capitalisation rate

• A 5% change in the projected capitalised costs
19
Acorn D-REIT
Notes (continued)
4 Assumptions used in deriving Proforma financial information (continued)
4.3 Gain on disposal of property (continued)
Sensitivity analysis - change to projected gain on disposal or the year ending 31 December 2021
(continued)
Base assumption Increase Decrease
Shs’ 000 Shs’ 000 Shs’ 000
Change in projected capitalisation rate: +/-0.5% 184,231 (102,758) 116,459
Change in the projected capitalised costs: +/-5% 184,231 (78,132) 78,132
4.4 Acorn D-REIT expenses
These comprise of the initial costs of the Acorn D-REIT offer and subsequent recurring administrative
expenses.
a) Set-up costs
These relate to the initial costs for the Acorn D-REIT offer and are based on contracted rates with service
providers. The set-up costs of the Acorn D-REIT will be paid upfront from the initial capital raise. However, these
costs shall be recovered from investors as they buy into the Acorn D-REIT over time. The costs will be recovered
as a one-time charge at the time of issue, by charging the expense per unit.
2020
Set up costs Shs’000
Other consultants 17,952
Transaction advisory fees 16,940
Placement costs 16,341
Legal fees 11,400
Trustee fee 9,612
CMA authorisation fee of REIT scheme 7,209
Approval fee of Offering Memorandum 5,407
Land transfer fees 5,700
Project manager certifier 4,524
Tax consultant fees 3,750
Medium Term Note (MTN) transfer legal expenses 3,272
Valuer fees 2,394
Registrar fee 2,332
Miscellaneous 2,000
Reporting accountant fees 1,653
Marketing 1,581
Printing fees 100
Total set up costs 112,167
b) Administrative expenses
The REIT Manager estimated administrative expenses for the Acorn D-REIT. These are based on contracted
rates with service providers.
2021
Shs’000
Trustee fees 39,325
REIT fees to CMA 8,773
Project Management certifier fees 8,208
Valuer fees 3,420
Auditor annual fee 2,565
Placement fee 1,925
Register of unit holders per dividend payment 240
64,456
20
Acorn D-REIT
Notes (continued)
b) Administrative expenses (continued)
i. A placement fee of 0.85% of the gross proceeds is payable on for placing carried out by the Advisor.
ii. Annual Trustee fees of 0.5% of the total assets of Acorn D-REIT as defined in the Trust Deed.
iii. Annual REIT fee of 0.15% of the Net Asset Value of Acorn D-REIT.
iv. Valuer fee shall be charged at Shs 300,000 per property.
v. Project management certifier fee shall be charged at Shs 600,000 per month.
vi. Auditor’s fees shall be paid per annual audit, increasing with inflation and number of properties operated
by the Acorn D-REIT.
c) Management fees
Annual management fees are payable to Acorn Investment Management Limited (AIML) as the REIT Manager,
estimated at 2% of the net asset value of the Acorn D-REIT.
4.5 Income tax
The Acorn D-REIT will be registered with the Capital Markets Authority (CMA) and the Kenya Revenue Authority
(KRA) and consequently, exempted from income tax as per the amendment of Section 20 of the Income Tax Act
as per Finance Bill 2019, effective 7 November 2019.
4.6 Investment property
a) Complete and incomplete portfolio

The complete portfolio comprises projects where construction is expected to be completed by 31 December
2021 while the incomplete portfolio comprises projects where construction will be ongoing or not yet started as
of 31 December 2021. The fair value of the properties is based on an independent valuation carried out by
Tysons Limited, on the basis of open market value. The valuer is a registered valuer and has recent experience
in Kenya and the category of the investment property being valued.
Tysons Limited performed valuations for six properties as at November 2020 namely; Qwetu USIU Rd 3, Qwetu
USIU Rd 4, Qwetu Hurlingham 1, Qejani Chiromo, Qwetu Chiromo and Qwetu Bogani East. The property values
for the six properties are therefore based on the valuation reports plus incurred and estimated costs while the
property values for the remaining 5 properties are based on incurred and estimated costs. The table below
shows the breakdown of project values for complete and incomplete portfolio.
2020 2021
Shs’000 Shs’000
Completed portfolio by 2020
Qwetu USIU Rd 3 1,453,694 -
Completed portfolio by 2021
Qwetu USIU Rd 4 940,009 1,254,524
Qwetu Hurlingham 1 1,149,595 1,698,996
Sub total 3,543,298 2,953,520
Incomplete portfolio
Qwetu Bogani East 1 438,027 702,548
Qejani Chiromo 475,962 857,217
Qwetu Chiromo 651,507 1,014,013
Qejani Bogani East 1 247,146 435,517
Qwetu Hurlingham 2 - 268,903
Qwetu 2021 - 202,097
Qejani 2021 - 405,395
Sub total 1,812,642 3,885,690
Total 5,355,940 6,839,210
21
Acorn D-REIT
Notes (continued)
4.7 Cash at bank
Cash at bank is driven by the operations of the Acorn D-REIT through changes in working capital, funds received
and investments in properties.
4.8 Trade and other receivables
Assumes that debtors and other receivables at the end of the period will amount to 30 days of retail rental
collections at the end of the reporting period.
4.9 Borrowings
The Acorn D-REIT debt will be through the medium-term note (MTN) and bank loans. The debt financing of the
projects is projected as below:
2020 2021
Project MTN Bank MTN Bank
Qwetu USIU Rd 3 589,277 - - -
Qwetu USIU Rd 4 298,530 - 533,225 -
Qwetu Hurlingham 1 364,474 - 757,593 -
Qwetu Bogani East 1 - - - 286,852
Qejani Chiromo - - 387,382 -
Qwetu Chiromo - - 386,330 -
Qejani Bogani East 1 - - - 210,026
Qwetu Hurlingham 2 - - - 34,818
Sub - total 1,252,281 - 2,064,530 531,696
Total 1,252,281 2,596,226
Interest expense on the MTN is calculated based on a coupon rate of 12.25% p.a.
4.10 Trade and other payables
The Acorn D-REIT creditors are based on the assumptions that the Acorn D-REIT cost as at the end of the
period are yet to be paid for. The creditors in Qwetu USIU Rd 3 are based on the assumption that the payment
of the expenses incurred by Qwetu USIU Rd 3 will be on the basis of a 30-day credit period being extended to
the Acorn D-REIT.
4.11 Unit-holders’ contributions
Unit-holders’ contributions are the proceeds received from the offer. Initial set up costs and placement costs for
the Acorn D-REIT shall be recognised as a reduction from contributions.
The unit holders shall contribute a percentage of the total property development cost. The property development
costs are based on the valuation reports as at November 2020 plus incurred and projected costs until 31
December 2020 and 31 December 2021.
The proceeds raised from the offer shall cover the elements below;
Total raise Property development Set-up costs

Amount in Shs’000 4,414,444 4,302,277 112,167
Refer to note 4.4 for the breakdown of the set-up costs.
22
Acorn D-REIT
Notes (continued)
4.11 Unit-holders’ contributions (continued)
The contributions of Shs 4,302,277,000 required for property development will be utilised as follows:
Project 2020 2021

Shs’000 Shs’000
Qwetu USIU Rd 3 864,416 786,543
Qwetu USIU Rd 4 641,479 728,273
Qwetu Hurlingham 1 785,112 900,179
Qwetu Bogani East 1 438,027 438,027
Qejani Chiromo 475,962 475,962
Qwetu Chiromo 651,507 651,507
Qejani Bogani East 1 247,147 247,147
Qwetu Hurlingham 2 - 74,639
Total 4,103,659 4,302,277
Refer to note 4.6 on investment property for more details.
--------- 000 ---------
23
PART 14: PROMOTER FINANCIAL STATEMENTS
Below is an extract of the financial statements of Acorn Holdings Limited, the Promoter and Issuer, for the
years ended 31 December 2018 and 2019. The full form financial statements are available for inspection-see
section 11.6
Page | 158
Page | 159
Page | 160
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Page | 166
Page | 167
PART 15: REIT MANAGER FINANCIAL STATEMENTS

Below is an extract of the financial statements of Acorn Investment Management Limited, the REIT Manager,
for the years ended 31 December 2019. The full form financial statements are available for inspection -see
section 11.6
Note: The Security Holders in the Acorn D-REIT only have recourse to the assets of the real estate investment
trust and not to the assets of the REIT Manager.
Page | 168
Page | 169
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Page | 171
Page | 172
PART 16: TRUSTEE FINANCIAL STATEMENTS

Below is an extract of the financial statements of the Co-operative Bank of Kenya Limited, the Trustee, for the
years ended 31 December 2018 and 2019. The full form financial statements are available for inspection – see
Section 11.6.
Note: The Security Holders in the Acorn D-REIT only have recourse to the assets of the real estate
investment trust and not to the assets of the Trustee.
Page | 173
Page | 174
Page | 175
PART 17: DEVELOPMENT MANAGER FINANCIAL STATEMENTS

Below is an extract of the financial statements of Acorn Management Services Limited, the Development
Manager, for the years ended 31 December 2018 and 2019. The full form financial statements are available for
inspection – see Section 11.6.
Note: The Security Holders in the Acorn D-REIT only have recourse to the assets of the real estate investment
trust and not to the assets of the Development Manager.
Page | 176
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PART 18: SAMPLE APPLICATION FORM FOR UNITS
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2020

ACORN STUDENT ACCOMMODATION

Phase II properties are currently held as a land bank, to be developed after

The Promoter is committed to high standards of corporate governance and to

The Acorn D-REIT’s portfolio at establishment will comprise of student

b. Country and industry risk factors

d. Risks associated with a pandemic

7.4. Risks associated with pandemic ................................................................................................... 86

PART 1: CORPORATE INFORMATION

Acorn Student Accommodation D-REIT

Promoter Acorn Holdings Limited

1.3. Advisors and Experts to the Transaction

Transaction Advisor& Renaissance Capital Kenya Limited

Tax Advisor Viva Africa Consulting LLP

International Legal Advisor Gowling WLG

Trustee The Co-operative Bank of Kenya Limited

REIT Manager Acorn Investment Management Limited

Development & Property Acorn Management Services Limited

Project Manager Certifier Aegis Development Solutions Ltd

Property Valuer Tysons Limited

Green Buildings International Finance Corporation

Placement Agents Stanbic Centre,

16th Floor, JKUAT Towers,

Orbit Place, 2nd Floor,

Crawford Business Park

PART 2: DEFINED TERMS AND ABBREVIATIONS

Term or Abbreviation Meaning

“AMSL” or Acorn Management Services Limited;

“AUM” assets under management;

“Director” a director of the D-REIT Manager;

“Distribution” distributions of income or Realized Capital Gains of the Acorn D-REIT;

“Hurdle” an IRR of 17.5%;

“HSES” health, safety, environment and social;

“KES” Kenya Shillings, the lawful currency of Kenya;

“KYC” Know your customer;

"Launch Date" the date of formal launch of the Acorn D-REIT;

“Offering this document;

“PBSA” purpose-built student accommodation;

“Restricted Offer” an issue or an offer made to Professional Investors;

“RTGS” Real time gross settlement;

a) this Offering Memorandum, including any conversion or supplementary

including any amending, supplemental or replacement Memorandum and

“Structural Engineer” FBW Kenya;

“Transaction Adviser” Renaissance Capital;

“Valuation report” report made by a valuer in respect of the Acorn D-REIT;

“Valuer” Tysons Limited;

PART 3: KEY FEATURES OF THE OFFER

3.2. Offer Timetable

Opening date of the Offer Wednesday 9th December, 2020

3.3. Key Investment Highlights

2 Compound annual growth rate

3.3.2. Investment decisions made on thematic fundamentals;

3.3.3. Active and healthy pipeline of high-quality assets;

3.3.5. Stable, non-cyclical investment returns

Source: Mentoria Report, Zamara Annual Report & Acorn model

3.3.9. Strong corporate governance and shareholder support

3.3.10. Social impact

3.3.11. Green status

3.4. Application Procedure