Fusion Capital plans to divest from $40m grade A Kigali Heights investments

Regional private equity firm Fusion Capital Group is making a strategic move to divest from its real estate investment in Rwanda after a successful run. In an exclusive interview with CNBC Africa, Daniel Kamau, the Group CEO of Fusion Capital, shared insights into the firm's investment strategy and future plans. Fusion Capital, with operations across East Africa, has focused on private equity, macro finance, and real estate over the last 17 years. Their real estate portfolio, spanning residential, commercial, and retail properties in Kenya, Uganda, and Rwanda, accounts for about 90% of their investments. One of their flagship investments in Rwanda is Kigali Heights, a mixed-use development opened in 2016. With approximately 30,000 square meters of space, including Grade A office and retail units, Kigali Heights has been a prime asset for Fusion Syndicate investors. Kamau emphasized the success of the project, noting that it is leased to about 98% capacity and has become a standout Grade A building in the region. Fusion Capital's strategy for Kigali Heights was to build, let, and eventually sell the property, aligning with their business model. As the firm prepares to exit the development, Kamau expressed confidence in the investment's appeal to local and international investors. With an investment of over $40 million, Kigali Heights has been positioned as an attractive opportunity for yield investors, backed by quality leases and Grade A tenants. Despite the challenges posed by the pandemic, Fusion Capital leveraged its early entry into the market to secure tenants and create a competitive advantage. Looking ahead, Kamau discussed the changing dynamics in East Africa's real estate sector, highlighting the shift towards build-to-suit models and the importance of innovative strategies to drive growth. Fusion Capital's recent board appointments, including industry professionals like Felicien and James McLean, reflect the firm's commitment to expanding its presence and exploring new opportunities. With a focus on affordable housing and logistics, Fusion Capital aims to raise new capital for further investments in the region. Kamau underlined the potential for returns on investment in East Africa, emphasizing the need for sustainable development yields in a competitive market. He acknowledged the challenges in Kenya and Uganda's commercial real estate sectors but expressed optimism about the opportunities in Rwanda. Fusion Capital's long-term view for Rwanda includes a strategic focus on affordable housing, with plans to acquire land and develop compliant rental spaces. Kamau encouraged potential investors to consider East Africa as an attractive destination with supportive governments and promising exit opportunities. With a vision to expand their footprint in Rwanda and beyond, Fusion Capital is poised to drive innovation and growth in the region's real estate market.