Johannesburg – Zimbabwe’s property market is largely given a
wide berth by South African property groups, but some players in the industry
reckon the time is ripe to start exploiting opportunities there.
The opportunities lie in the fact that for decades precious
few new commercial properties have been brought to the market – and no new
The country will soon have a new property fund with assets
The property portfolio of the new Ascendant Property Fund
will comprise the assets of three listed companies in Zimbabwe and be managed
by South African property services group JHI.
“The assets will therefore be moved from a listed
environment to an unlisted environment,” says Kura Chihota, chief executive of
He says the idea is raise finance for purchasing the
properties from banks in Zimbabwe. Although closed, the fund will be open
to investors who wish to bring properties or finance to the table, he says.
The assets include offices and retail and industrial
properties comprising 95 000m² in Harare, Bulawayo and Gweru.
Chihota says the objective is to expand the value of the
assets to $100m within the next two years.
The anticipated income yield is 12%.
He says the expectation is that within the next 24 months a
new political dispensation with a clear direction will be in place.
Samuel Ogbu, chief executive of Liberty Properties, is
positive about Zimbabwe but says it is a market for long-term investors
and not for those wanting to make a
Liberty Properties has already spread its wings in Africa
and opened the doors to its new 28 000m² shopping centre in Lusaka’s Levy
This centre was developed as a joint venture with Zambia’s
National Pension Scheme Authority.
Various other South African property players have in recent
times moved out into Africa, including Sanlam, which is busy establishing a
Pan-African property fund to be listed in Mauritius because that is an easy
jurisdiction from which it can operate in Africa.
Sanlam plans to operate in
seven countries and is targeting an expected annual return of between 15% and 16%
Private equity investor Actis sees a rosy future in Africa,
despite the challenges.
It has invested around $2bn in the continent and it
developed, inter alia, the first shopping centre in Lagos in Nigeria and
recently sold the Accra Mall in Ghana to property developer Atterbury and
Actis receives capital from overseas investors in the US and Europe.
Renaissance Capital Africa chief executive Clifford Sacks
has great faith in the Africa story.
The continent has a rapidly urbanising population
which is beginning to consume on a big scale, he said at the 44th annual
property conference held by the South African Property Owners Association in Durban last week.
Renaissance is involved in the enormous Tatu City mixed-use
development in Nairobi in Kenya. But, says Sacks, corruption remains Africa’s
most vexing challenge.
Actis director Kevin Teeroovengadum says the company
recently experienced an incident with a tenant with government contacts who
failed to pay his rent. The company followed the legal route and after a
lengthy process managed to evict him from the property.
The most exciting countries in Africa for property companies
are Nigeria and Kenya, while Angola (owing to a lack to title deeds) and the
Democratic Republic of Congo are provisionally being given a wide berth.
But not everyone is excited about Africa. Growthpoint
executive director Estienne de Klerk says the group is investing in countries
with established property laws, property ownership and property rights, and
Africa is not currently on its radar.
The new 28 000m² shopping centre in Lusaka’s Levy Business
Park was developed by Liberty Properties and Zambia’s National Pension Scheme
Africa in a nutshell:
- Its population will increase to 2bn by 2050, compared with
1bn in 2010.
- Seven African countries number among the top 10 fastest
growing economies in the world.
- There are 650 million cellphone subscribers in Africa.
- A total 50% of Africa’s people will live in cities by
- By 2040 Africa will have an working population of 1.1 billion.
- Its gross domestic product is expected to be $2 600bn by 2020.
- Nigeria will grow to be the biggest economy in Africa
between September this year and 2014.
Source: Absa, Renaissance Capital
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