CATEGORIES: Private Equity, REITs & Funds

Momentum bags $30m from CDC for African Real Estate Fund

The UK’s development finance institution, CDC, has committed $30m to the Momentum Africa Real Estate Fund (MAREF) in a deal that reignites fundraising activity within the African real estate space. The investment will support the development of greenfield industrial, residential and commercial real estate opportunities across sub-Saharan Africa.

 

Last year, it was announced that MAREF held its final close at the end of February 2017, raising a total of $170m, up $20m from the $150m the fund had raised by August 2016. However, this commitment brings MAREF’s total fundraising to over $200m; $206m to be precise.

 

The Momentum Africa Real Estate Fund is a joint venture between sister companies Momentum Global Investment Management in London and Eris Property Group in South Africa, both subsidiaries of Johannesburg-listed MMI Holdings Limited, Africa’s third-largest life insurer. Momentum is responsible for the fund-raising, investor relations, fund management and operational oversight whilst Eris is responsible for the origination, development, management and exit of MAREF’s assets. The fund has a strong focus on countries where CDC has limited real estate exposure including, but not limited to, Mozambique, Zambia, Uganda and Tanzania.

 

The MAREF team recently launched two office blocks in Accra – Ghana, SU Tower, and 335 Place. They are finalising the leasing of both buildings and will arrange for an independent valuation afterwards which they expect to provide an uplift for their investors.

 

CDC’s Managing Director, Intermediated Equity, Murray Grant said:

 

“Despite significant demand, real estate development in most of sub-Saharan Africa is limited by the availability of construction finance, and the lack of experienced, institutional development platforms. Our investment in MAREF will help them to increase the stock of high-quality real estate in Africa, bringing economic opportunity and job creation to the continent. We will work closely with the fund to help them raise standards across Africa’s real estate development sector and bring much-needed skills to new markets, thereby supporting the growth of local developers and contractors.”

 

David Lashbrook, Head of Africa Real Estate at Momentum Global Investment Management, said:

 

“CDC’s considerable African investment expertise and its added focus on business integrity and environmental and social issues has helped us to improve our investment process for the benefit of our investors and the projects that we’re backing.”