Stanlib property fund aimed at East and West Africa

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“It’s mainly retail developments that we’re looking at. So we are developing and fundraising simultaneously. The primary markets we’re looking at are Nigeria, Ghana in West Africa and Kenya, Uganda in East Africa,” Ferreira, the fund manager at Stanlib told CNBC Africa on Thursday.   

“We are opportunistic as well, if we see opportunities elsewhere in Africa that makes sense for us, we can explore those as well.”

The private equity-style fund has a four-year investment period and aims to deliver an internal rate of return of 25 per cent per annum. The fund also aims to achieve first year yields on development costs of between 12 to 14 per cent per annum.

Stanlib plans to capitalise the fund with 150 million dollars and about 60 to 80 per cent of that portfolio is allocated to the retail space. Lagos, Accra, Abuja and Tima are some of the targeted areas.

“There is a huge demand in these countries for retail space. We estimate that Lagos is shy of about three million square feet of retail. Now the likes of Shoprite, Africa features more and more in their revenue stream going forward, I think, to the extent that by around 2030, Africa will contribute approximately 40 per cent of their overall revenue stream,” said Ferreira.

“We followed the group into these regions, into these particular countries because we have a strong presence on the ground there. We are also following our South African customers and people we have relationships with, our anchor investors in these developments,” he added.

Ferreira also explained that the permitting issues have been dealt with and that the fund is in development mode.

“Everybody speaks about the growth rates, we recognise that they are real. They are exciting but furthermore, Stanlib together with Liberty and the Standard Bank group in general have a full suite of skills to develop projects,” said Ferreira.