Acorn Holdings, a property developer, has announced a significant increase in the dividends allocated to unitholders of its real estate investment trusts (Reits), specifically the Acorn Student Accommodation Development Reit (ASA D-Reit) and Acorn Investment Reit (I-Reit). In 2023, the company's financial report disclosed that dividends payable to unitholders surged from Sh192.48 million to Sh482.8 million, driven by the declaration of the first distribution from its development Reits.
The financial statement for 2023 highlighted that the ASA D-Reit distributed Sh240 million, equivalent to Sh0.91 per unit, in December, despite a decline in its net profit from Sh384.2 million to Sh71.6 million. This decrease was primarily due to lower fair value gains on its investment properties, leading the company to make distributions from its retained earnings, which dropped to Sh1.09 billion. The net profit for 2023 was subsequently added back into retained earnings.
Additionally, the I-Reit boosted its total distribution for the year to Sh242.8 million, equaling Sh0.77 per unit, a rise from Sh192.5 million in 2022. However, the profit for the I-Reit decreased to Sh396.1 million, down from Sh504.9 million in the previous year. Acorn attributed the combined profit decline to factors such as increased interest rates, rising construction costs due to inflation, and the decision by the REIT Manager to establish a maintenance reserve for the I-Reit in order to uphold the long-term quality and value of its assets. The company is also focused on replacing high-cost debt in the I-Reit with more affordable debt.