Friday, January 21

African real estate private equity funds (2015 Vs 2021) – What has changed?

In early 2015, we completed a spotlight on 5 private equity funds that were targeting sub-Saharan Africa as an investment destination. The perceived undersupply of prime commercial real estate and the opportunity to create high-yielding assets drummed up a significant amount of interest. Data provided by Preqin in October 2014 showed that there were about 8 unlisted real estate funds targeting $1.25 billion compared to 91 Africa-focused private equity funds, demonstrating that this interest was still in its relative infancy. To help reset the tone and context, the market at this time was very different from what it is now, and the all-around sentiment was much stronger. The Africa rising narrative was still very prominent, and Nigeria alongside her African counterparts had average growth rates between 5 – 7%.

Now that the market has significantly changed, how have these 5 investors adjusted? Two investors have sold or are in the process of selling their operations to other investors, two remain active while another is inactive. Here’s a more detailed recap on the 2015 spotlight (unedited), and an update on their 2021 current strategy/status.

2015 vs 2021 Investment Strategy


2015 Spotlight: The Resilient Property Income Fund is a well-established REIT in South Africa, developing and owning malls throughout South Africa since 2002. Recently, the company decided to leverage its expertise in developing malls by setting up Resilient Africa, a property development and investment company with the sole purpose of developing quality shopping malls in dominant metro and rapidly urbanizing areas in Nigeria. Resilient has a 50.98% interest in the development company, with Standard Bank and Shoprite Holdings Limited as minority partners. Below is an overview of its current projects in second-tier cities in Nigeria, perhaps in a bid to avoid an oversupply of office and retail in the major cities and cash in on first-mover advantage in these smaller cities.

Keeping consistency with its strategy in South Africa, Resilient Africa plans to retain its malls with a view to exiting the portfolio through a REIT in the long run.

2021 Update: Of the 4 assets outlined above, only 3 were completed and other plans, including the development of Rivers Mall, a shopping centre in Port Harcourt City were also suspended. The sizes of the completed malls also varied from original plans as Asaba and Owerri Mall are 8,000sqm and 8,680sqm respectively.

At the end of 2020, Resilient reported an 11% dip in income in their Nigeria portfolio, citing a challenging macro-economic environment in Nigeria and capacity restrictions due to COVID among key challenges. Though 6-month rolling vacancies improved from 9.3% to 5.9% and finally 4.6% in the period ending June 2021,  the Group disclosed its intention to dispose of its entire Nigeria portfolio/operations to Shoprite Holdings Limited. In their financial statement for the 12 month period ending June 2021, Resilient explained that an in-principle agreement has been reached to dispose of the portfolio/operations and consequently, their Nigeria subsidiaries are now being carried as discontinued operations (Non-Current Assets Held for Sale and Discontinued Operations). As of June 2021, the purchase consideration had not yet been agreed upon.

Overview of Resilient’s current projects in second-tier cities in Nigeria.


2015 Spotlight: This fund was established by an affiliate of FirstRand Limited and Westport Property (each holding a 50% interest) to raise capital for RMB Westport with a focus on the development of retail and mixed-use development in major cities in Africa. The company began operations in 2008 and had already met its $250m target for its first fund by October 2012. Among their completions are the Ikeja City Mall, the first world-class mall on the Lagos mainland, and two other projects in Ghana. Their current pipeline includes the Osapa and Royal Gardens Mall in Lekki, and two other malls in the Angolan capital, Luanda.

2021 Update: RMB Westport has completed notable developments in Lagos including The Wings Towers as well as  Circle (Osapa) Mall and Business Centre, and The Junction Mall in Angola. However, the entity did not survive. In 2020, the $300m sale/transfer of RMB Westport’s portfolio to Growthpoint Investec African Properties (GIAP) was completed.

Growthpoint Investec African Properties is a joint venture between Growthpoint Properties and Investec Asset Management that was announced in 2015. The joint venture seeks to invest in income-producing commercial real estate assets in select cities across the African continent. In April 2021, GIAP rebranded to Lango meaning ‘entry point’ or ‘gateway’ in Swahili to reflect their strategy to become an entry point for sophisticated investor capital to flow into Africa’s real estate sector. RMB Westport’s most ambitious project, which would have become Nigeria’s largest shopping mall, is still currently being held as land in the Lango portfolio. The original plan was for a 28,000sqm shopping center called Royal Gardens Mall at the edge of Royal Gardens Estate in Ajah.


2015 Spotlight: This $250 million fund was established as a collaboration between Eris Property Group and Momentum Global Investment Managers (a subsidiary in the MMI Group). Although the fund is yet to close, its focus will be on A-grade retail, office, and industrial properties in Nigeria, Ghana, Kenya, Mozambique, and Zambia.

2021 Update: In its fund brochure dated October 2020, MAREF described itself as a  $205m institutional real estate fund that finances and develops Grade A office blocks, warehouses, and shopping malls in sub-Saharan Africa. So far, MAREF has put together a small and relatively successful portfolio of property assets. These include:

  • The 4.968m2 (Block A only) Mon Tressor  Business Gateway in Mauritius, which was completed in August 2018.
  • The 9,814m2 335 Place Office Tower in Accra,  Ghana, was also completed in August 2018.
  • The 12,837sqm SU Office Tower in Accra Ghana that was completed in November 2018.

The fund originally tried to sponsor at least 3 deals in Nigeria including the Sogenal Office Tower in Ikoyi – Lagos, Maitama Mixed-Use Centre in Maitama – Abuja FCT, and Agbara Industrial Estate in Agbara – Lagos, however, all three of these deals fell through.

STANLIB Africa Direct Property Development Fund

2015 Spotlight: This fund was launched by STANLIB Limited, an asset manager based in Johannesburg through its STANLIB Direct Property Investments Franchise. The fund has a primary focus on retail-led developments and the sector is expected to make up between 60% – 80% of its portfolio. Investments will be made in Sub-Saharan African growth markets with a primary focus on Nigeria, Ghana, Kenya, and Uganda.

2021 Update: Not much information is currently available about the entity. In 2017, STANLIB Africa Direct Property Development Fund and Chestnut Uganda entered into an agreement to develop a $50m shopping mall in Kampala called Arena Mall. Activity from Stanlib which is not directly related to this fund was the STANLIB Fahari I-REIT. In 2019, however, STANLIB Kenya Limited disposed of its investment management mandates, rights, and obligations for STANLIB Fahari I-REIT to ICEA Lion Asset Management Limited. As a result, the REIT is now called the ILAM Fahari I-REIT.

NOVARE Africa Property Fund II

2015 Spotlight: This $250m fund based in Mauritius and funded mainly by South African Pension Funds is no newcomer to the Nigerian retail sector having already completed the Grand Towers Abuja Mall in the FCT. This fund follows the successful closing of its predecessor the $81 million Novare Africa Property Fund I, which closed in September 2011. True to its mission of developing retail malls and mixed-use developments, it commenced the construction of the $83 million Lekki Mall last November. Situated close to the Lagos Business School, Lakowe Lakes Golf and Country Estate, and the Lekki Free Trade Zone mall which will have a Gross Lettable Area of 20,000 Sqm with anchor tenants including Shoprite, Game, Wrangler, Genesis Deluxe Cinemas, etc.

2021 Update: Novare Africa Property Fund II closed in June 2016 and raised a total of $351million. The fund has opened a total of 7 shopping malls, 1 office development, and another mixed-use (retail and office) project in 3 African countries. With a portfolio of this size, we expect an exit through the creation of an income vehicle or bulk disposal to a larger investor with an appetite.

Notable Mentions

Even though they were not profiled in the original spotlight a few notable veterans include Actis, who is credited with launching the first sub-Saharan African Private real estate fund (AARE 1) at $154 million, this was followed by the $165 million CAPIC fund by African Capital Alliance in 2008. Actis is now transitioning to their income type funds called the Actis Africa Sustainable Real Estate Income Fund and Actis West Africa REIF LP. These funds are currently trying to re-acquire Ikeja City Mall. The Mara Delta Fund, which has since rebranded to GRIT has maintained its income strategy and continued expansion across the continent.

How do you think private equity funds will evolve in the next 5 years? Follow us on Linkedin and let us know what you think!