Real estate firm Acorn Group and London-based private equity fund Helios are jointly set to build 3,800 university hostel units in Nairobi in a mega project estimated to cost about Sh7.4 billion.
The pair, through an investment vehicle they own equally, plans to set up the first cluster of units near Strathmore University, United States International University Africa (USIU-Africa) and Daystar University.
Details of this development are contained in disclosures made by the International Finance Corporation (IFC), which plans to lend the two firms $40 million to undertake the initiative.
The rapid expansion of both public and private universities has created a huge demand for student accommodation, prompting private developers to step in either independently or through partnerships with tertiary institutions.
“The student and young professionals housing will be a big step towards reducing the deficit in affordable accommodation for those in tertiary institutions and those newly out of college but cannot afford to buy properties of their own,” IFC, the World Bank’s private lending arm, says in its filings.
Insurance firm Britam previously owned a 25 per cent stake in Acorn before the two firms agreed to partner on big-ticket real estate projects.
The two parties fell out after Acorn partnered with property developer Cytonn Investments, with Britam claiming billions of shillings from them in a legal battle.
An out-of-court settlement saw Britam sell its stake, paving the way for Acorn to enter into a 50:50 joint venture with Helios last year.