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Nedbank CIB funds first Reit in Ghana

15th February 2024

By: Tasneem Bulbulia

Senior Contributing Editor Online

     

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Nedbank Corporate and Investment Banking’s (CIB’s) Property Finance division has funded the first real estate investment trust (Reit) in Ghana.

The CIB Property Finance team on February 15 announced that it had funded the acquisition of One Airport Square by Sentinel Commercial Reit.

One Airport Square is a Grade A building in a prime area of Accra’s Airport City.

Sentinel Reit is the first Reit to be licensed under the current Reit guidelines from the Securities and Exchange Commission (SEC) of Ghana.

This deal marks a milestone for both CIB Property Finance and the Ghanaian real estate market, as it introduces a new and innovative way of investing in commercial property, the company highlights.

One Airport Square, a nine-storey mixed-use building with a commercial space of 2 000 m² and office space of 15 000 m², was acquired through a combination of equity and debt financing.

Several local and international investors provided equity capital, while CIB Property Finance provided the debt components of the acquisition, comprising a term loan facility and a short-term bridge facility.

CIB Property Finance also provided bridging finance to the seller in respect of deferred payment to facilitate the transaction.

Sentinel Reit was a close-ended scheme that aimed to provide investors with regular and stable income with sustainable growth, liquidity and capital growth per share from investments in commercial real estate, Nedbank CIB averred.

It noted that the strategy for the Reit was to invest in a portfolio of commercial real estate assets that had attractive investment fundamentals in terms of prime location, architectural design, stable tenant base and properly structured leases.

It aims to achieve long-term appreciation of its assets and maximise returns on capital employed.

The Reit presented an opportunity for discerning investors to balance their investment portfolio by investing in assets that generated cash flow that was hedged against any depreciation of the Ghanaian cedi and to participate in a stable and consistent stream, Nedbank CIB posited.

“We are pleased to have supported Sentinel in closing the first Ghanaian Reit under the new SEC guidelines. Nedbank CIB leveraged its intellectual capital to enable the structuring and delivery of a multifaceted funding solution in support of this landmark transaction.

“The Reit sector offers potential for growth as institutional investors diversify their investment portfolio with real estate income-generating assets underpinned by strong investment fundamentals. As a leading Reit and property lender on the continent, we are pleased to have had a key role in making this happen,” says Nedbank CIB West Africa regional executive Edem Dzakpasu.

CIB Property Finance assisted with the acquisition of Sentinel’s first seed asset. The One Airport Square property was originally owned by one of Nedbank’s clients, Actis.

As Nedbank already knew the property, it said this contributed to an efficient transaction between the two parties, with a key part of this providing short-term bridging facilities to both clients. 

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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