May 11, 2018

Growthpoint and Investec Launch Operations in Pan-African Real Estate Business with over $212m Committed

Dolapo Omidire

Almost 3 years after the joint venture agreement was initially announced, Growthpoint Properties and Investec Asset Management, in partnership with the International Finance Corporation (IFC), have the commenced operations of Growthpoint Investec African Properties (GIAP).

The pan-African real estate investment business, which will be managed by Growthpoint Investec African Property Management has already secured capital commitments in excess of US$212 million from several large institutional and international investors, with Growthpoint committing US$50 million. When it was announced in 2015, the fund was targeting $500 million and the IFC had planned to support with a $40 million investment. GIAP will seek to invest in income-producing commercial real estate assets in select cities across the African continent. Targeted investments will be further diversified by sector, with GIAP’s mandate spanning office, retail and industrial properties.

Norbert Sasse, Group CEO of Growthpoint Properties said:

“For Growthpoint, the commencement of GIAP furthers our stated strategy to introduce new revenue streams with our fund management business. The African fund was first announced in 2015 and has taken some time to get to this point on account of economic and property cycles, so we are excited to get started.”

Investments will be selected on their ability to support long-term rental growth from top-tier tenants, and thereby generate sustainable investor returns.

Thomas Reilly, MD of Growthpoint Investec African Property Management explained that a key issue for real estate developers across the continent has been their ability to efficiently exit completed assets so they can recycle and re-deploy capital. According to Reilly, the objective is to work closely with a number of players in the space who consider GIAP’s entry as an asset aggregator a welcome development in this regard.

GIAP is expected to aid the development of local African real estate markets and to contribute to the wide-ranging developmental impact which real estate can have in such markets.

“Africa has had few sophisticated players with the ability to meaningfully impact the capital markets in the real estate sector. We believe that GIAP is well positioned and has the necessary backing to add to the growth of this market over time, attract the necessary skills, and extract value on a sustainable basis,” Thabo Khojane, MD of Investec Asset Management Africa concluded.

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