African Property Investors Commit Over $500mn To 10 Deals In Six Months

A number of institutional investors in the African property market have committed at least $500 million to financing real estate development projects across the continent during the first half of 2019.

This is according to market data sourced by THE WHISTLER from APIEvents, organizers of the Africa Property Investment ((API) Summit, which is Africa’s largest and most premier real estate event.

Further analysis of the 10 deals within the period under review indicates that seven of the deals have already attracted $381 million of investment commitment, while the amount committed for the remaining three deals has not been made public.

However, APIEvents sources claim the undisclosed sum could extend the combined investment value of the ten property deals in question from $381 million to over $500 million.

The various companies involved in these deals and the specific amounts committed by them are Growthpoint Investec African Property Fund, which is to acquire malls in Ghana and Zambia with an undisclosed deal size; Centum RE and Nedbank, which have structured a debt deal for their Two Rivers development project, with a deal size of $75 million; and IFC, with an investment of $9 million in Hilton and in Lusaka Protea Hotel.

Also, African Logistics Properties (ALP) has signed debt restructuring deal with Standard Bank worth a $26.5 million; just as Shelter Afrique has entered into an affordable housing deal of $100 million with Habitat International; while Grit has committed $12.5 million to buying Senegal Club Med, with further development plans of $28.8 million.

Then, CDC has committed $30.7 million to mezzanine debt investment in Teyliom Hospitality; even as WeWork has opened its first of many African office locations in Johannesburg for an undisclosed deal size; while Actis & Shapoorji have launched an affordable housing joint venture of $120 million in Kenya.

Finally, Westpark and Siemens are to build a sustainable industrial park for a deal sum yet to be disclosed.

“In the first two quarters of 2019, we’ve tracked ten significant transactions in excess of more than half a billion dollars across multiple jurisdictions and sectors by API Summit stakeholders,” said Kfir Rusin, host of the annual API summit.

The 10th edition of the event will take place from 2nd to 3rd October, 2019 in Johannesburg, South Africa to discuss prospects for further boosting a sustainable property market for the continents.

“For investors and developers looking for data and partners experienced in African development or looking to sell prime assets, these are the men and women responsible for structuring and executing these mega deals who will be at this year’s conference. These include GIAPF’s Managing Director Thomas Reilly; Grit’s CEO Bronwyn Corbett; multiple senior investment officers from the IFC; Standard Bank’s Head of Africa real estate, Niyi Adeleye, the CDC’s Illaria Benucci, Centum’s RE MD Samuel Kariuki and many more in attendance,´´ said Rusin.

He also believes that the growth and opportunity displayed by a diverse spread of international funds, DFIs, banks, PE firms, institutional investors and others is evidence that despite apparent indifference to African opportunities in SA boardrooms, the continent’s real estate sector has evolved, and become increasingly more liquid and provides value in key nodes and sectors.

“The market has moved forward in the past six months, and we’re thrilled that so many major dealmakers will be at the API Summit to transact and share their experiences with our delegates,” he said.

According to Craig Smith of Anchor Stockbrokers, who is a renowned real estate analyst, “Africa’s top markets are definitely a more attractive entry point than they were 18 to 24 months ago, but investors still need to exercise a higher level of diligence when investing.´´

Recently, African investors, especially South African funds, have continued to look at Central and Eastern Europe for scale or sizeable transactions and positive funding spreads, but Smith said the transaction spread by API Summit investors points to a market that is expanding, meaning that, in his view, “the opportunity set over the long term is immense.”