Delta enters Zambia retail market with $21.5m acquisition
JSE-listed Delta International Property has, through subsidiary company Delta International Mauritius, entered into an agreement with Rockcastle Global Real Estate to acquire Ndola Kafubu Investments (NKI) and Kitwe Mukuba Investments (KMI) for $21.5-million.
NKI held 50% of the Kafubu Mall, in Ndola, while KMI held 50% of the Mukuba Mall, in Kitwe, Zambia.
Delta believed the acquisition presented an opportunity to enter a new market in Africa.
“Not only does the investment meet the rigid investment criteria of strong counterparty leases, underpinned by long-term dollar-based leases, it also provides Delta with a strong in-country partner, who will provide invaluable knowledge and insight into the Zambian market,” it said in a statement.
It added that the recent depreciation in the kwacha, as well as the announcements by operators in the Zambian mining sector intending to re-engineer their operations to reduce production costs over the next 18 months, allowed it to acquire stakes in the properties on favourable terms.
Further, it expected that its net kwacha exposure would only reach 8.7% of rentals by the end of the 2016 financial year, with all exposure to the kwacha having been hedged by Rockcastle for 12 months.
Kafubu Mall was anchored by Shoprite, with other major tenants including OK Furnishers, Innscor Africa, Spur, Jet and Edgars Active. The Mukuba Mall was anchored by Game, Shoprite, Pick n Pay and Mr Price, with Woolworths, Carnival Furnishers, Innscor Africa, Spur and Barclays listed as its other major tenants.
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