Pan-African property fund bullish on Africa growth story

Delta International CEO, Louis Schnetler said the group would focus on Morocco and Mozambique for some time before purchasing in other countries.

Delta International Property Fund listed on the Bermuda Stock Exchange (BSE) and JSE’s AltX bourse, is on a crusade to take advantage of the African growth story and bolstering its investments in the continent.

The group on Thursday announced its maiden distribution, six months after listing. It declared a distribution of 6.63 US cents per share for the six months to December.

Its CEO, Louis Schnetler, attributed the performance to carefully managed portfolio that included assets in Morocco and Mozambique and he was confident these would grow by the end of the June financial year.

During period, the fund acquired two assets – the Anadarko Building, a 7 805m2 GLA office building located in the affluent suburb of Sommershield, Maputo, Mozambique.

The building is anchored by Anadarko Petroleum Corporation, with a lease term of 15 years which commenced in June 2013. It has a weighted average lease expiry (“WALE”) of 10.42 years.

The second asset introduced into the portfolio was Anfa Place, a 30 711m2 GLA shopping centre located in the prestigious suburb of Anfa in Casablanca, Morocco.

The shopping centre is anchored by the likes of Carrefour, Marks & Spencer, H&M and Virgin Megastore and has a WALE of 7.54 years.

The Fund currently derives 72% of its revenue from Morocco and 28% from Mozambique.

“We operate in a complex and challenging environment and had to deal with extraordinary challenges during our first phase of investment, many of which were outside of our control. I am very proud of the achievements made by the team to date,” said Schnetler.

The fund raised US$87 941 691 during the reporting period through the issue of new shares.

The equity, together with new debt facilities were used to acquire the initial properties and two additional properties in Mozambique after the reporting period — the Hollard Building for a purchase consideration of US$14.1 million and the Vodacom Building.

The company said it would soon move its secondary listing to the JSE main board from the AltX. Its primary listing would move from the Bermudan Stock Exchange to the Mauritian Stock Exchange.

Delta International, formerly Osiris Properties International, is 25% held by South Africa’s Delta Property Fund.

Mozambique Property Market

“In contrast to Morocco, the contractual rentals in Mozambique are denominated in US Dollars,” Schnetler explains. “With the discovery of oil and gas in Mozambique and a resultant influx of foreign direct investment we also anticipate local companies to continue expanding at a rapid pace.

“This of course bodes well for the property market, especially in the office sector in high-growth nodes such as Maputo. Delta International has identified a solid acquisition pipeline in Mozambique for property consisting mainly of offices, and a small prominent retail property,” he said.

Mr Schnetler said the group would focus on Morocco and Mozambique for some time before purchasing in other countries.

"We are always looking for opportunities but right now our focus is in Morocco and Mozambique. Nigeria and Ghana, for example, are countries we are not yet entering," he said.