Mara Delta splashes out $40m on coastal resort in Mauritius

Mara Delta said it had entered into agreement with Nereide Ltd, a unit of Lux Island Resorts Ltd to buy Tamassa Resort, located in Bel Ombre on the south western coast of Mauritius.

Multi-listed Real Estate Investment Trust (Reit), Mara Delta has entered into agreement with Nereide Ltd, a unit of Lux Island Resorts Ltd to buy Tamassa Resort, located in Bel Ombre on the south western coast of Mauritius.

Mara is set to acquire the property on a sale-and-leaseback basis that will see Lux Island Resorts continue as operator of the hotel.

Tamassa is a four-star beach hotel comprising 214 rooms in close proximity to golf courses, nature parks and other attractions including the Seven Coloured Earths geological formations.

“We are very excited about this acquisition, our second in Mauritius and the first hospitality deal,” Bronwyn Corbett CEO of Mara Delta said on Friday last week.

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“The acquisition is expected to enhance our previously forecasted distributions. The lease is denominated in euro, reducing our currency risk.”

Mara will fund the purchase consideration, which is the euro equivalent of $40m, through the issue of Mara Delta ordinary shares to existing and interested new investors, as well as debt.

“It is also important to note that we won’t take on any direct hospitality risk as the transaction is on a sale and leaseback basis under a 10-year fixed triple net lease, with the tenant obliged to fully repair, maintain and insure the property,” Corbett said.

The resort offers a bar, a nightclub and two eateries, one of which serves Mediterranean cuisine. Other amenities include a spa, four pools and a tennis court, plus a gym, a kids’ club and a dive school.

The resort has been operating for more than nine years and is ranked seventh on hospitality website, Trip Advisor, out of 178 hotels in Mauritius. It occupies 350 metres of premier beach frontage and is 40 minutes away from Sir Seewoosagur Ramgoolam International airport.

Although the initial investor sentiment towards Mara Delta (formerly Delta International) was hardly fervent, the company is starting to carve out a niche as the only Africa-focused Real Estate Investment Trust (Reit) on the Johannesburg Stock Exchange (JSE) and the Stock Exchange of Mauritius (SEM).

Property investments beyond South African shores have been hard to stomach for many income-chasing investors given the difficulties in assembling debt facilities to fund growth ambitions and increasingly volatile currencies in many African economies.

And Mara has had its fair share of these challenges since it was reverse listed into Osiris Properties in 2014 and assembled by Sandile Nomvete and Bronwyn Corbett, the executives of Delta Property Fund.

Mara started out with two properties in 2014: a 30,879m² shopping centre in Morocco and an office block in Mozambique. Mara now has interests in 12 assets in Mozambique, Morocco, Mauritius, Zambia and Kenya. Following the Tamassa deal, this portfolio of largely retail properties will include interests in 13 assets and be worth just over 400m (R5.5bn).

Corbett has been praised for her deal-making abilities.

“Bronwyn is a good operator. She has an eye for good assets and doing value-accretive deals,” said Nessi Chetty, a fund manager at MMI Investments.

Mara Delta plans to list its Moroccan assets separately soon. It wants to convert its Moroccan subsidiary into a Reit by the end of 2016, as it looks to gain from tax savings created by the dispensation.

The company posted a 4.1% growth in dividend payouts to US$11.75 cents for the year to June 2016, which was in line with market expectations.