Real estate: IFC, others to invest N110bn in Nigeria, others

International Finance Corporation (IFC), Growthpoint and Investec Asset Management (AM) are joining forces to raise N110 billion ($500 million) to expand their new investments in Nigeria, Zambia, Botswana, Kenya and Ghana real estate sectors.

Growthpoint Properties, South Africa’s biggest real-estate investment trust, agreed to a joint venture with Investec Asset Management to expand on the continent outside of its home market. It was learnt that Growthpoint will have a 50 per cent stake in the new vehicle and make an initial investment of $50 million, while the International Finance Corpora-tion, an arm of the World Bank, will contribute $40 million.

The partners will seek to raise a further $410 million from institutional investors and will look at listing the business on a stock exchange in the next five to seven years.

According to Chief Executive of Growthpoint Properties Limited, Mr. Norbert Sasse, plan is in top gear to join other South African firms in the initiative into the rest of Africa. He explained that Growthpoint had taken a while to get its strategy together for Africa expansion.

Sasse added that key to analysing the opportunity was the finding of right partners, which took the company about two years. He explained that the partnership was a 50-50 joint venture with Investec Asset Management, which made the new initiative a compelling proposition. Sasse said: “We have also the International Finance Corporation (IFC), which has come as a partner.

The critical part of the ingredient is finding the team, so, we were fortunate to find Thomas Reilly and his team to join us.”

Reilly was the previous CEO of Sanlam’s Africa property fund business. Sasse explained that the company’s African expansion model was built along the fund management model, contrary to the South African model where the company put 100 per cent of the capital. According to him, different model was adopted to get third party institutional funding with Investec.

Reilly, who is the managing director of the new investment vehicle noted that the company would start by focusing on the obvious suspects in the group’s expansion drive.

“We had an initial target of 17 countries, but we will start with the obvious ones like Zambia and Botswana in Southern Africa, Kenya in East Africa, Nigeria and Ghana in West Africa,” said Reilly. He added that engaging local partners would also be part of Growthpoint’s strategy.