Sanlam’s sub-Saharan Africa Real Estate Fund listed on the Stock Exchange of Mauritius last week in what could further propel the march of South Africa’s capital northwards and using this base to march together with international investors.
Sanlam said the fund will allow local and international investors to invest in high quality retail and commercial real estate across select sub-Saharan African countries excluding South Africa.
Johan van der Merwe, CEO of Sanlam Investments says the fund forms an integral part of the Sanlam Group’s growth strategy and takes advantage of its large existing footprint on the continent. “The fund is a strong demonstration of our entrepreneurial ability and is a further step towards us being able to provide the investor community with a comprehensive suite of products for Africa.”
Thomas Reilly, CEO of the Fund’s Advisor says the response from the investor community to the launch of the fund has been exceptional. “We have closed the first capital raise for the fund in line with our full initial target of US$ 100 million. The fund is open-ended, with multiple future capital raisings planned in order to raise additional capital.”
He said the fund takes advantage of the supply and demand imbalance for quality real estate across the subcontinent, as well as the region’s strengthening demographics and attractive investment returns.
“We expect most of the second capital raise – anticipated to take place early next year – to come from the international investor community. While raising capital internationally is by no means an easy task, this fund provides a compelling investment opportunity and investor interest has been strong. The proposition is strengthened by the fact that the fund has been structured to international standards and it provides the first acceptable platform for both local and international investors to tap the growth potential of the sub-Saharan African real estate market – without any significant development risk,” says Reilly.
The Sanlam Group currently has businesses in 11 countries across the African continent and expects to grow a portfolio in excess of US$500m over the medium term with a large percentage of the investor base, aside from Southern African investors, expected to be sourced from the US and Europe.