South Africa’s black-controlled Delta Property Fund plans to establish a new sub-Saharan Africa Real Estate Fund on the JSE in June, as it expects high dividend-paying strategies to become more appealing to investors.
The fund will allow local and international investors to invest in retail, offices, warehouses and hotels across select sub-Saharan African countries excluding South Africa.
Once a continent that foreign investment shied away from, Africa has become an investment hotspot as more and more investors are attracted by the sub-Saharan region’s Gross Domestic Product (GDP) growth of more than 5% over that last three years.
Delta Property Fund is on a road show to raise R2.2 billion (US220 million) to fund its new African venture.
The plan is to reverse list a mixed portfolio of properties into AltX-listed Osiris Properties International, which has its primary listing on the Bermuda Stock Exchange.
Osiris changed its name to Delta International Property earlier this week. Nomvete says the company under its new guise will move to the JSE’s main board once the capital raising and agreements to acquire the first tranche of properties are concluded. Nomvete expects that to happen in the first week of June.
The fund will offer an initial income yield of 8% (in dollars). “We are primarily an income play. So we are looking to acquire only completed property assets.”
Delta International’s flagship property will be the 30000m² Anfa Place shopping centre in Casablanca, the second-largest mall in Morocco.
“We like the centre because it has a European flavour. It’s anchored by French supermarket giant Carrefour. Other tenants include UK-based Marks & Spencer,” he says.
The initial portfolio will also include two large office buildings in Maputo that house the Mozambique head office of Vodacom and insurer Hollard.
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