South African based fund, Growthpoint Investec African Properties (GIAP) fund plans to invest over $500 million this year in shopping malls and office buildings in Nigeria, Kenya, Zambia and Ghana.
Riding on the cooling commodity crisis and positive macroeconomic indicators, the fund will be seeking opportunities to improve market liquidity and become an aggregator of assets that may form their own class of investments. Initially cautious about potential deals, the fund now says investment opportunities have increased, according to the fund’s MD Thomas Reilly.
“We’re actively engaging in certain transactions. There is some excitement on the rise in terms of getting something done,” he said.
Still on opportunities, Reilly said the fund will be looking in places like Lagos in Nigera, Accra in Ghana, Lusaka in Zambia, Nairobi in Kenya, which are perceived as gateway cities with potential to achieve significant scale.
While the fund focuses on relevant retail and office space, Nairobi is likely to miss out on the funds upcoming exploits due to the retail situation down here (oversupply), that may not constitute a ‘decent place to do business’ according to a recent statement by the fund’s MD.
“Buying in Nairobi will be difficult because the market is somewhat saturated with retail and office space that is a little overpriced vis-à-vis the risks and gross returns of 15% to 18% the fund is targeting,” Reilly told Moneyweb.
Meanwhile, Mauritius based GRIT real estate group is estimating plans to sell bonds next year in order to finance further acquisitions on the continent.
The groups CEO Bronwyn Corbet told Bloomberg, “We anticipate that the first raise will be a minimum size of about $250 million. Depending on market conditions, the group would likely consider medium-term bonds.”
The company which completed a listing in London Stock Exchange last year, also completed deals worth US$123.2 last year, mainly in Ghana and Mozambique. Now the company is looking for opportunities to add to its existing portfolio in Botswana, Ghana, Kenya and the Indian Ocean islands of Mauritius, Reunion and Seychelles.
Last year, the company exited its investment in Kenya’s Buffalo mall, making modest gains. GRIT only signs leases with international companies with the ability to pay rent in Euros and Dollars.
Founded in 2012, the CEO Ms Corbet has been credited for growing the fund’s assets under management from US$200m to US$800m.