REITs and pension funds to fuel Africa’s next property investment cycle

Africa
Bronwyn Corbett, Chief Executive and co-founder of Grit Real Estate Income Group. Photo: Supplied

DURBAN – Africa’s emerging real estate investment trust (REIT) market could become the catalyst for large scale investment into the continent’s growing, albeit still underdeveloped, property sector.

Recent years have seen the debut of Stanlib’s Fahari I-REIT in Kenya, and Morocco, Ghana and Uganda having either recently achieved REIT status or being in the final process of doing so. Other notable capital market milestones include Nigeria listing its first real estate linked Bond on the FMDQ Securities Exchange and Botswana’s listed property sector now has more than seven trading counters. This indicates a market maturing.

“The cap rate compression achieved by these REITs in a listed environment presents significant value-unlock for investors. Our experience, having listed Grit on the main market of the London Stock Exchange, underscores a definite appetite for African real estate,” said Bronwyn Corbett, Chief Executive and co-founder of Grit Real Estate Income Group.

Speaking ahead of the API Summit set to take place on 2 and 3 October 2019 at the Sandton Convention Centre, Corbett believes that while there is interest, investors are still very selective about where they choose to invest.

“This is especially true for international investors who appreciate that Africa is a continent consisting of 54 odd countries. Geographic selection is, therefore, as important a property fundamental as choosing the appropriate asset class and location. Our approach has always been to be asset agnostic, focusing on what we call ‘investment grade Africa’ which includes Morocco, Mauritius and Botswana, and ‘high-growth Africa which is made up of Ghana, Kenya, Mozambique, and Senegal,” said Corbett. 

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