Property Flash


This week the API Summit takes place at the Marriott Hotel in Melrose Arch, Johannesburg, and visitors and exhibitors are preparing themselves for two days of valuable insight into African real estate.

One of the top-end speakers who will attend the event is Raghav Gandhi, managing director at Acorn Investment Management, who is a champion of real estate investment trusts (Reits). He will present at the event held on September 21 and 22.

In an interview with Property Flash, he explains that in the next three years, we should see the formation of at least three new Reits in Kenya. They could possibly list on formal stock exchanges such as the Nairobi Securities Exchange and Johannesburg Stock Exchange.

Reit dispensation was introduced to South Africa in late 2013, in line with global markets best practice. Reits are property owners which serve as reliable income payers as, by definition, they are required to pay a minimum of their distributable income as a dividend each financial year. This minimum varies in each market but in South Africa, it sits at 75%. The structure grants property funds tax benefits as the income earned is taxed at a shareholder level and not at a company level. Reits are able to raise large amounts of capital from eager investors.

While in South Africa, Reits tend to own a mix of assets, in east Africa, Kenya specifically, where the dispensation was next adopted, Reits have been focused on residential properties.

Gandhi says that investors and other groups who work in African real estate have begun to appreciate the exceptional investment value that residential property offers on a large scale.

Acorn currently has two Reits under management. They were the second and third Reits established in Kenya, amid a challenging global environment as the pandemic continued to disrupt the world and resource prices also slumped. Many countries rich in commodities, especially in Africa, saw their economies lose momentum.

But now as countries emerge from the pandemic, the opportunities to invest in real estate are growing. Teams of people and institutions can buy properties and create Reits, Gandhi explains.

“Real estate is highly fragmented in Kenya. Much of it is owned by families and established wealthy private groups. But things are shifting. Acorn created an income Reit and a development Reit. Income Reits hold onto revenue-generating properties while development Reits have their own regulations and focus on developing properties. There is space for both of these corporate structures in east Africa and I’m excited and confident about how Reits can grow across the region,” he says.

Acorn’s Reits are focused on rental housing investments as the demographics suit this variation of property. If you look at the Kenyan population, as much as 90% of it earns $850 a month or less. As much as 75% of population of Kenyans are under 35 years of age. These metrics suggest that Kenyans cannot easily afford to own homes. But Gandhi explains that the demand for affordable, high-quality housing is high.

“The only way to provide affordable housing in Kenya is through rental housing. The development side of our business is creating housing across the country of different types. We have also started with purpose-built student housing. We now have 550 000 students in Kenya but student beds provided by universities sit at 50 000. Any expert will say that students need to live within 2.5 km of their universities. This has prompted us to look at how we can alleviate the need for student homes,” he said.

Advertorial for API Summit

The API Summit 2022 will take place on September 21 and 22 at The Marriott Hotel at Melrose Arch, Johannesburg. The API Summit is the premier real estate investment conference on the continent and is expected to attract hundreds of guests as they look to network and collaborate in an effort to take African real estate forward.  Register to attend this year’s event at

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