Delta Property Fund launches pan-African income fund

Delta Property Fund CEO Sandile Nomvete said Delta International was also scouting for deals in Kenya, Ghana and Nigeria.

Delta Property Fund believes its newly listed Delta International venture will attain success quickly as the first pan-African property income fund.

Delta International this week concluded an equity raise through which it acquired $87m.

The fund also announced the appointment of RMB’s Louis Schnetler as CEO.

The $87m was raised at the rand equivalent issue price of $2 per share last week. The proceeds of the equity raise will be used partly for the funding of the acquisition of a portfolio of African real estate assets in Morocco and Mozambique.

The equity raise was offered to invited investors through a private placement process, and Java Capital acted as sole bookrunner.

Delta chief financial officer Brownyn Corbett said she had been very impressed with Morocco especially. "Many European companies are using Morocco as a gateway to Africa. It is quicker to get to and easier to do business there for them," she said.

Through Delta International, JSE investors can gain access to dollar-based returns made in the various African countries in which Delta International plans to invest.

Delta International’s flagship property is the 30,000m² Anfa Place shopping centre in Casablanca, the second-largest mall in Morocco.

Delta Property Fund CEO Sandile Nomvete said Delta International was also scouting for deals in Kenya, Ghana and Nigeria.

Delta Property Fund owns 25% of Delta International.

Mr Nomvete said clinching deals in Africa came down to a property fund’s track record and not its size. "You have to be nimble and able to make changes quickly. We have seen how some very large companies have struggled in Africa," he said.

Ian Anderson, chief investment officer at Grindrod Asset Management said one had to be very aware of risks in Africa but Delta had done well for a while in terms of finding deals in SA and looked to have a good team in place for the African venture.

He said Delta was also correct not to merge with Rebosis Property Fund, another broad-based black empowerment fund. "Delta has been careful with the moves it has made recently. We were happy they called off the merger with Rebosis," he said.

Delta listed in 2012 and has grown quickly with a specialisation in government tenants. It timed its entrance on the JSE well as various larger funds sold it their government buildings.