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African Land Investments to buy shopping malls and office complexes

Investors will soon have the opportunity to participate in the growth of modern shopping malls and office blocks in sub-Saharan Africa.

Launched yesterday, African Land Investments (ALI) will invest in existing retail and commercial real estate assets across the continent.

ALI claims to be the first real estate investment trust (REIT) focused solely on the sub-Saharan African market to be listed on the Johannesburg Stock Exchange. REITs invest in and own properties and their revenues come principally from their properties’ rents, according to Investopedia.  Individuals can invest in REITs by purchasing their shares directly on the stock exchange.

The company’s CEO is Kevin Teeroovengadum, a former director for real estate at Actis, an emerging markets private equity firm. In recent years, Actis has been involved in many of Africa’s more high-profile property developments. The firm has backed Nigeria’s first ever modern shopping centre and it is currently developing East Africa’s largest retail mall in Kenya’s capital Nairobi.

A number of private equity funds and other developers, especially from South Africa and Europe, are currently building modern shopping malls and office complexes across sub-Saharan Africa. ALI says it will offer a sales route to the developers of these assets in a market where exit options are rare.

“What I’ve seen over the last five/six years is a lot of investment going into the development of new shopping malls and grade A office buildings and light industrial buildings as well,” says Teeroovengadum.

“It was high time for somebody to set up a venture or a company that is going to be looking at acquiring completed properties. So you’ve got a lot of money going into development, but not so much into buying completed properties. African Land will come in as one of those few [companies] currently in Africa that will be able to buy completed properties from the private equity funds [and] also from developers.”

The company is targeting investments in Nigeria, Ghana, Kenya, Mozambique, Uganda and Zambia. According to Teeroovengadum these countries are experiencing high growth with good economic fundamentals. These are also the countries on which many of the property developers are currently focusing.

ALI’s first investment will be the Manda Hill Mall in Zambia’s capital Lusaka. According to Teeroovengadum this mall is the biggest in sub-Saharan Africa, outside of South Africa.

ALI’s JSE listing is planned for mid-November and the firm is also anticipating a secondary listing on the Lusaka Stock Exchange.

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