Novare Africa Property Fund II, the fund with a mandate to invest in retail and commercial real estate in sub-Saharan Africa outside of South Africa, has announced its final close at the end of June 2016.
The fund, which will be listed on the Mauritius Stock Exchange at the end of July 2016, has raised $350 million (R5.25 billion) for investment in a portfolio of new developments in, amongst others, Nigeria, Zambia and Mozambique. It is managed by Novare Fund Manager in Mauritius, while Novare Equity Partners provides a sub-advisory role, being tasked with sourcing potential new development opportunities.
Derrick Roper, chief executive of Novare Equity Partners, said that while uncertainty and volatility had clouded the investment outlook for the continent, Novare’s Africa Property Fund will benefit in the longer term from positive demographics, urbanisation and growing personal incomes.
“The retail sector in Africa remains among the most under-penetrated, with significant potential for investors. Facilities for retailers to operate from, as well as to support their logistical operations, remain scarce,” said Roper.
The approach of Novare is to work in partnership with leading South African and international retailers expanding in sub-Saharan Africa. Novare is a seasoned operator in African markets north of South Africa, having operated in the region since 2007.
Novare launched its first fund, the $81 million (R1.21 billion) Novare Africa Property Fund I, in July 2010. The fund’s first investment was the successful Novare Apo mall in Abuja, Nigeria, which opened in June 2012 with Shoprite as the anchor tenant – alongside prominent brands like PEP, Mr Price, MTN, LG, Adidas and Samsung.
The Novare Africa Property Fund II had its first close at the end of June 2014 and has since attracted additional commitments to achieve a target of $350 million. The fund has already invested in various projects, with a strong pipeline awaiting capital deployment.
Projects the fund has invested in to date include:
The 22 000m2 Novare Lekki mall in Lagos, which opens on 25 August 2016, at a total project cost of $83 million (R1.24 billion). This will be the largest mall in Nigeria’s most populous city and home to a range of blue chip Nigerian, South African and international tenants.
Construction has commenced at Novare Gateway mall in Abuja, where it will be the first building of stature most visitors experience when arriving in Nigeria’s capital city on the expressway from the airport. With bulk earthworks completed at Novare Central, also in Abuja, construction is due to start on this mixed use centre consisting of retail space and A-grade offices.
Bulk earthworks have been completed at Novare Matola mall in Maputo, Mozambique, and construction has commenced. The mall is scheduled to open in the fourth quarter of 2017. At Novare Great North in Lusaka, Zambia, land has been acquired for the shopping centre due to open in the first quarter of 2018.
Roper said: “The continent’s challenges have tended to over-shadow its longer term potential, and we believe that this stage of the economic cycle presents significant opportunities for superior future investment returns.”