Growthpoint Properties and Investec Asset Management recently announced that they have entered into a joint venture agreement, which in partnership with IFC, will seek to establish and grow a significant diversified pan-African real estate investment business.
Growthpoint Properties, Africa’s largest REIT (real estate investment trust) will invest an initial $50 million into the vehicle, with IFC also supporting it with a $40 million anchor investment. The $90 million capital commitment serves as part of a targeted $500 million which will be raised over an unspecified period. The investors have explained that the aim is to grow it to an optimal size for a possible major stock exchange listing in the next five to seven years.
The new vehicle will initially focus on investment in the retail, office, industrial and hospitality sectors in select African economies such as Namibia, Botswana, Mozambique, Zambia, Uganda, Tanzania, Kenya, Nigeria, Ghana and even Morocco among others. Interestingly, the vehicle’s real estate portfolio will comprise approximately 80% income-producing real estate assets while 20% of its investment will be earmarked for development to create new assets for its portfolio.
Speaking on the new joint venture, Norbert Sasse, CEO of Growthpoint Properties, explained that their African strategy had been in the making for quite some time. Africa’s largest REIT had been seeking the right partners and expertise to create a powerful platform for pan-African property investment.
John Green, Head, Global Client Group at Investec Asset Management also commented saying: “We believe the African real estate markets are well positioned for a long-term growth phase given the significant supply deficit across the continent. We are excited about this unique partnership as it brings together our pan-African investment experience with Growthpoint’s industry-leading property investment expertise and IFC’s deep knowledge of the continent.”
Other investors including Stanlib and Momentum have also expressed strong interest in real estate investment opportunities across Africa. Both investors have set up funds, however the latter, who are being advised by Eris Property Group, recently raised $150 million in August 2015, and intend on capping aggregate commitments at $250 million in July 2016 when the fund finally closes.