A’s largest property group, Growthpoint Properties, has announced it will be entering real estate investment in several African markets outside of SA.
Growthpoint, SA’s largest real estate investment trust and a JSE Top 40 company, has entered a 50/50 joint venture with Investec Asset Management, partnered by the International Finance Corporation (IFC) to launch its pan-African investment strategy.
Growthpoint’s joint venture is intended to form a new management business that will establish and grow a significant diversified pan-African (excluding SA) third-party institutional real estate investment vehicle.
In addition to its 50% direct stake in the manager, Growthpoint will invest an initial 50m into the vehicle, with the finance corporation supporting it with a 40m investment as an anchor investor. The corporation, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector in developing countries.
With local teams and offices in 22 African countries, the International Finance Corporation will provide on-the-ground advisory services as a domestic partner for the vehicle in line with its mandate.
The 90m commitment from Growthpoint and the corporation as anchor investors is part of a targeted 500m that will be raised for this third-party institutional investment vehicle. It is intended that the additional capital will be raised from qualifying, sophisticated third-party institutional investors, local and international. The vehicle will not be open to public investors. However, the aim is to grow it to an optimal size for a possible major stock exchange listing in the next five to seven years.
Norbert Sasse, Growthpoint CEO, said: “Our African strategy has been in the making for some time. We needed the right partners and expertise to create a powerful platform for panAfrican property investment. Growthpoint is thrilled to embark on this venture with Investec Asset Management and IFC to build this into a significant business accessing investment in income-producing pan-African real estate, to benefit shareholders and investors.”
The venture leverages the industry, geographic and investment expertise of its partners.
Growthpoint owns and manages a diversified portfolio of 471 properties in SA, 53 properties in Australia through its investment in Growthpoint Properties Australia, and a 50% interest in the properties at V&A Waterfront in Cape Town.
Growthpoint has consolidated property assets valued at more than R100bn.
John Green, Global Client Group head at Investec Asset Management, said, “We believe the African real estate markets are well-positioned for a longterm 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,” Mr Green said.
Investec Asset Management is one of the largest specialist third-party investors in private equity, credit, public equity and sovereign debt across the African continent.
The new venture’s senior management team has a collective 30 years’ experience in real estate and investment in Africa and will be led by Thomas Reilly, the previous CEO of Sanlam’s Africa property fund business.
With a long history in investment banking, he is respected for his commercial real estate knowledge, his African property investment experience, and work in many African markets.
The new pan-African real estate vehicle will initially target investment in economies including Namibia, Botswana, Mozambique, Zambia, Uganda, Tanzania, Kenya, Nigeria, Ghana and Morocco, with opportunitydriven investment that will give Growthpoint’s shareholders as well as investors in the vehicle access to real estate in other African countries.