Actis, an international private equity investment firm, says it has a five-year plan to invest in projects including shopping centres, office towers and industrial parks in fast-growing economies such as Nigeria, Ghana and Kenya.
Kevin Teeroovengadum, the firm’s director of sub-Saharan Africa real estate unit, who revealed this recently in an interview in Johannesburg, says that they would lead investment of as much as $1.5 billion in African commercial property to meet rising demand from international companies targeting a growing middle class.
Michael Chu’di Ejekam, Teeroovengadum’s counterpart in Nigeria, had noted in Lagos that African market was “huge, under-supplied and growing,” adding that “there is a sharp demand-supply imbalance which we are trying to bridge.”
“This is sub-Saharan Africa and in comparison with some other markets, it is one of the fastest growing in the entire world. Africa dominates the list of the fastest growing economies in the world,” Ejekam noted in an interview with BusinessDay.
African Development Bank’s annual outlook also notes that Africa’s economy, excluding Libya and Somalia, is forecast to expand 5.2 percent this year amid a rise in oil and mining projects and direct investment from foreign companies.
Teeroovengadum points out that Nigeria, the continent’s most populous country, grew 6.6 percent in the first quarter of 2013, while South Africa, the continent’s biggest economy, expanded by an annualised 0.9 percent.
Actis has raised about $1.4 billion across seven Africa funds since 2003, according to data compiled by Bloomberg. The company is also pursuing deals in South America and Southeast Asia in sectors including energy and technology.
In Nigeria, Ejekam noted that within 8-kilometre radius of Ikeja City Mall in Lagos, household expenditure was about $18,000 per annum per household, adding that with about one million households within this radius, household expenditure per annum was about $18 billion. “For us as private equity investors, we find this very compelling,” he said.
“Actis has already invested the proceeds of an initial $155 million real estate fund in malls and office buildings in Ghana, Nigeria, Kenya, Botswana and Mauritius,” Teeroovengadum says.
He adds that the company has partnered with Mauritian investment company, GML, to invest in Port Louis-based Indian Ocean Real Estate Co which is developing a $1.5 billion town in the island nation.
“We have leapfrogged to shopping centres of 25,000 square meters from existing small shops” in Nigeria and Ghana, Teeroovengadum says, saying “the idea was when you go into Africa, you benefit from middle-class growth.”
By: Chuka Uroko with agency report
