South Africa’s foremost financial services company, FirstRand Limited has disclose plans to invest proceeds of its $250 million fund raising exercise across major West and Southern African real estate markets – particularly, Nigeria, Ghana and Angola.
The $250 million was raised from the property unit of FirstRand’s investment banking arm to develop properties in West Africa to supply the strong demand for high-grade retail and commercial property, earmarked as key jurisdictions in which to develop retail and commercial property.
In an e-mailed statement, Director of Johannesburg-based Rand Merchant Bank (RMB) Westport, Michael O’Malley said; “Nigeria, Ghana and Angola have been earmarked as key jurisdictions in which to develop retail and commercial property.”
“Over the past decade, African economic output has more than tripled, which is one of the many reasons we believe that Africa today holds the greatest overall investment potential for all frontier markets globally.”
O’Malley added that the discovery of oil in Ghana will likely lead to a further increase in investor interest and subsequent demand for office and industrial space.
RMB Westport began operations in 2008 when Rand Merchant Bank (RMB)‚ through its Real Estate Investment Banking division entered into a joint venture with the Westport Property Group to combine west African property development skills‚ capital and investing expertise to enable the construction and development of high-grade retail‚ commercial and industrial property assets in key growth nodes of sub-Saharan Africa.
According to a report, an increasing proportion of Africa’s population is moving into urban areas as economic growth quickens, with houses and malls being built in major cities including Accra, Abuja and Luanda, the capitals of Ghana, Nigeria and Angola respectively.
CFO of Westport, Alan Wilson stated that “Africa currently has the world’s highest rate of urbanisation. This migration‚ along with Africa’s growing middle-class further reinforces the need for high grade office space and retail buildings in urban areas. The city of Luanda was for example built for a population of 300 000 and currently has over six million inhabitants.”
Wilson said the recent forecast by the International Monetary Fund (IMF) that Nigeria economy will grow by 6.9 percent is applaudable. He said if the rate is sustained‚ Nigeria can eventually overtake South Africa as the largest economy in Africa.
“We believe that regulatory reforms in Nigeria‚ along with its sheer population size‚ oil wealth and strong economic growth trend‚ make it a market that is difficult to ignore‚” adds Wilson.
RMB Westport have in the past been involved in some projects in Africa including Icon House and Accra Financial Centre (A-grade buildings in Ghana); Ikeja City Mall (the largest shopping mall in Nigeria); Osapa Retail (Phase I) and Project Wings (Office and retail property in Nigeria) and recently the Junction Shopping Centre (retail property in Accra‚ Ghana).