Investors will soon have the opportunity to participate in the growth of modern shopping malls and office blocks in sub-Saharan Africa. Launched yesterday, African Land Investments (ALI) will invest in existing retail and commercial real estate assets across the continent. ALI claims to be the first real estate investment trust (REIT) focused solely on the sub-Saharan African market to be listed on the Johannesburg Stock Exchange.
Six of the 10 fastest-growing countries in the world over the past decade were African, according to Johannesburg-based Rand Merchant Bank.
A number of private equity funds and other developers, especially from South Africa and Europe, are currently building modern shopping malls and office complexes across sub-Saharan Africa. ALI says it will offer a sales route to the developers of these assets in a market where exit options are rare.
“It was high time for somebody to set up a venture or a company that is going to be looking at acquiring completed properties. So you’ve got a lot of money going into development, but not so much into buying completed properties. African Land will come in as one of those few [companies] currently in Africa that will be able to buy completed properties from the private equity funds [and] also from developers.” Kevin Teeroovengadum, CEO
The company is targeting investments in Nigeria, Ghana, Kenya, Mozambique, Uganda and Zambia. According to Teeroovengadum these countries are experiencing high growth with good economic fundamentals. These are also the countries on which many of the property developers are currently focusing. ALI’s first investment will be the Manda Hill Mall in Zambia’s capital Lusaka. According to Teeroovengadum this mall is the biggest in sub-Saharan Africa, outside of South Africa.
ALI’s JSE listing is planned for mid-November and the firm is also anticipating a secondary listing on the Lusaka Stock Exchange. The company will have an initial distribution yield of 8.5 percent annually