Norbert Sasse
In a move that will create a diversified Pan-African third-party institutional real estate investment vehicle, real estate investment trust Growthpoint Properties has entered into a 50:50 joint venture with Investec Asset Management to form a new management business focused on property investment elsewhere on the continent.
Growthpoint would invest an initial $50-million into the vehicle, with anchor investor, the International Finance Corporation (IFC) providing a further $40-million in addition to on-the-ground advisory services as a local partner.
This $90-million commitment was part of a targeted $500-million that would be raised from local and international “qualifying and sophisticated” third-party institutional investors.
The vehicle would not initially be open to public investors; however, the aim was to grow it to an optimal size for a possible major stock exchange listing in the next five to seven years.
The fund would initially target investments in Namibia, Botswana, Mozambique, Zambia, Uganda, Tanzania, Kenya, Nigeria, Ghana and Morocco, with opportunity-driven investment in other African States.
The vehicle’s real estate portfolio would comprise around 80% income-producing real estate assets in strategic territories across Africa, excluding South Africa, with about 20% of its investment earmarked for development to create new assets for its portfolio.
It would also invest across diverse commercial property subsectors, such as retail, offices, industrial and hospitality.
“Our African strategy has been in the making for some time. We needed the right partners and expertise to create a powerful platform for Pan-African property investment.
“Growthpoint is thrilled to embark on this venture with Investec Asset Management and the IFC to build this into a significant business accessing investment in income-producing Pan-African real estate, to benefit shareholders and investors,” commented Growthpoint CEO Norbert Sasse.
He added that the business model represented a suitable, compelling investment strategy for Growthpoint to access opportunities in African real estate markets, allowing the group to further diversify its assets and harness opportunities across the African continent.
Growthpoint currently owned and managed a diversified portfolio of 471 properties in South Africa, 53 properties in Australia through its investment in Growthpoint Properties Australia and a 50% interest in the properties at V&A Waterfront, Cape Town.
The company boasted consolidated property assets valued at over R100-billion.
Investec Asset Management global client group head John Green added that the African real estate markets were 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 the IFC’s deep knowledge of the continent,” he said.
The new venture would be headed by former Sanlam Africa property fund CEO Thomas Reilly, who believed it provided a significant opportunity to facilitate the growth and liquidity of real estate as an asset class across the continent.