Delta International has embarked on a programme that would see the recently reverse-listed property fund potentially acquire $250-million of assets across Africa.
The Africa-focused group raised more than $87-million through a private placement to kick-start its growth ambitions and people were already on the ground in Morocco and Mozambique as Delta moved to “bulk up” its portfolio.
A potential pipeline of mostly office and dominant retail assets had been identified across North and sub-Saharan Africa, excluding South Africa, and negotiations and due diligence were under way with regard to some of the targeted buy-outs.
The group would also potentially branch out into strategically placed hotels, distribution centres and some residential acquisitions.
Delta International CEO designate Louis Schnetler, who was set to take the reins on August 1, explained that there was a demand/supply gap, with a burgeoning middle-class with nowhere to spend their earnings and retailers seeking good quality space to service this growing market.
Further, Africa-focused multinationals, particularly those involved in the oil and gas sectors, were increasingly seeking A-grade office and industrial space.
The first phase of the fund’s expansion included Morocco, Mozambique, Ghana and Nigeria.
Once critical mass had been established within these markets, the medium- to long-term second phase would involve expansion into Angola, Gabon, Tanzania, Tunisia, Zambia and Zimbabwe.
Delta Property Fund owns a 25% interest in Delta International, which was formerly Osiris Properties International and has a primary listing on the Bermuda Stock Exchange and a secondary listing on the AltX.
The JSE listing offered South African investors access to a dollar-hedged investment.
Delta International’s portfolio currently comprised properties in Casablanca, Morocco, and Maputo, Mozambique, with blue-chip tenants such as Marks & Spencer, Virgin Megastores, H&M, British Petroleum, KPMG and Hollard Insurance, under long leases.
The assets included a modern, dominant shopping mall and new office complexes, which were 92.68% tenanted, with 66.1% of the leases extending beyond 2021.
The weighted-average rental per square metre across the portfolio was $28.50 at a weighted-average escalation rate of 5.47% a year.