Property players leave bigger footprints in the rest of Africa

SOUTH African institutions, developers and listed-property players continue to expand their real estate footprints into the rest of Africa, creating more opportunities for investors to share in dollar-based returns offered by the continent’s burgeoning retail, office, industrial and residential property markets.
Life assurer Momentum, in conjunction with developer Eris Property, last week announced details of its African Real Estate Fund, an unlisted $250m venture aimed at institutional and high-net-worth private investors. Initial projects earmarked for development include an office complex in Accra, Ghana, a retail centre in Maputo, Mozambique and an office and hotel project in Kigali, Rwanda.
The fund, which has already raised $50m since its inception in January, requires a minimum investment of $1m. The head of Africa investment strategies at Momentum Global Investment Management, David Lashbrook, said the closed-ended fund was a capital growth play targeting a minimum internal rate of return of 18% in dollars net of all fees, over an eight-year lifespan. "We believe that investing in the development of commercial real estate is an exciting way for investors to support and participate in the rise of the African consumer.’’
Momentum follows the likes of Sanlam and Liberty, who have launched similar African property funds in recent years. The tally of JSE-listed companies that are investing in Africa’s brick and mortar markets also continues to grow.
Smaller, retail investors can access sub-Saharan real estate markets through the Stanlib Africa Property Fund, the only unit trust fund in the world to focus on African listed property. The fund is still relatively small at R331m.
Stanlib head of listed property funds Keillen Ndlovu said the listed property vehicles that invest in sub-Saharan Africa had a total market capitalisation of about R10bn only (excluding Mauritius-based Rockcastle Global Real Estate). However, he hoped to see new property listings in Kenya when it adopted new real estate investment trust legislation.