Grit chief urges investments as investors fail to see value in African property
It could be five years before institutions invested in African real estate on a large scale, Keillen Ndlovu, Stanlib head of listed-property funds, said at a recent Jones Lang Lasalle Outbound Capital Conference.
Ndlovu who spoke on a panel about investing in sub-Saharan Africa, said the real estate markets in countries in the region other than SA were just too small and lacked enough investment-grade stock to warrant institutions investing en masse. He said more liquidity was needed in African real estate and that a model African real-estate firm was needed.
"We need a strong company like Grit [Real Estate] to show that listed property can work in Africa. They are doing well under [CEO] Bronwyn [Corbett] and I think if they get the London Stock Exchange listing they want, this will go a long way in getting offshore investors to eye the continent in a different light."
Grit Real Estate is the only listed property fund that invests exclusively on the continent, not including SA.
Apart from Corbett and her team having built up a portfolio of 22 assets and an equity interest in a company with exposure to Botswana — altogether worth R7.35bn — no other African real estate funds are nearing a listing on the JSE.
Grit listed on the JSE in 2014 with R2.2bn of assets and spent years scouting the continent for opportunities.
It now pays dollar-denominated dividends, meaning it provides investors with regular income pay-outs, which is in line with JSE-listed Reits.
But institutional investors have still been wary of buying into African property.
"We need to invest in the continent together. As more professionally run funds enter the market, more institutions will put their money behind these funds," Corbett said at the conference.