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Real estate investors who jumped on the “Africa rising” bandwagon and thought they could make a quick buck out of the continent’s seemingly strong and growing middle class have had a rude awakening.
The slowdown in Africa’s economic growth outlook, and currency volatility, have compelled developers, retailers and property funds to reassess their investment strategies.
“But that doesn’t mean it is the end of the African growth story,” says Kevin Teeroovengadum. The Mauritian-born CEO of mall owner and developer AttAfrica is no newbie to the continent. He started his corporate finance and property deal making career in sub-Saharan Africa 16 years ago when the continent was hardly a blip on global investors’ radars.
Teeroovengadum says the early movers into Africa knew that the continent was never going to be a short-term play.
“However, some investors who only recently discovered Africa have overestimated the size of the continent’s middle class,” he says.
He believes Africa’s changing economic landscape will weed out the fly-by-nighters. “There is still good money to be made in Africa but only if you do your homework properly and adopt a longer-term view.”
After leaving school, Teeroovengadum completed a BSc in economics as well as two master’s degrees at Leicester University in the UK.
He then spent some time in Mauritius doing stints at KPMG, Deloitte and EY. By the late 1990s he was ready to move back to London.
But a chance meeting with a director of corporate finance adviser Loita Capital resulted in his settling in Johannesburg instead, where he joined Loita’s pan-African investment banking operations.
“That was the best decision I have ever made. I am still fascinated with the melting pot that is Africa.
” It has been amazing to be part of the evolution of the continent, politically and economically, and to see how the younger generation embraces globalisation,” he says.
In 2007, Teeroovengadum joined private equity firm Actis, which created the first real estate fund to invest in A-grade shopping centres on the continent. AttAfrica was formed in September 2014 to house the sub-Saharan African assets of Hyprop Investments Attacq and Atterbury.
Today AttAfrica owns a portfolio of five shopping centres, including Accra Mall, West Hills Mall and Achimota Mall in Ghana, and Manda Hill in Lusaka, Zambia.
Teeroovengadum believes it is becoming increasingly important to own malls in Africa that dominate their catchment areas, irrespective of whether they are 14,000m² or 40,000m².
He says investors also have to stop painting all African countries with one brush.
“Ghana and Côte d’Ivoire may be neighbours but they are two vastly different markets and each requires a unique investment approach,” he says.
He concedes that some countries, including Zambia, Ghana and Kenya, are heading for oversupply, which has prompted AttAfrica to broaden its geographical focus to West Africa.
Nairobi is a case in point; it has at least four new shopping centres in the pipeline.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Profile: AttAfrica CEO Kevin Teeroovengadum
Real estate investors who jumped on the “Africa rising” bandwagon and thought they could make a quick buck out of the continent’s seemingly strong and growing middle class have had a rude awakening.
The slowdown in Africa’s economic growth outlook, and currency volatility, have compelled developers, retailers and property funds to reassess their investment strategies.
“But that doesn’t mean it is the end of the African growth story,” says Kevin Teeroovengadum. The Mauritian-born CEO of mall owner and developer AttAfrica is no newbie to the continent. He started his corporate finance and property deal making career in sub-Saharan Africa 16 years ago when the continent was hardly a blip on global investors’ radars.
Teeroovengadum says the early movers into Africa knew that the continent was never going to be a short-term play.
“However, some investors who only recently discovered Africa have overestimated the size of the continent’s middle class,” he says.
He believes Africa’s changing economic landscape will weed out the fly-by-nighters. “There is still good money to be made in Africa but only if you do your homework properly and adopt a longer-term view.”
After leaving school, Teeroovengadum completed a BSc in economics as well as two master’s degrees at Leicester University in the UK.
He then spent some time in Mauritius doing stints at KPMG, Deloitte and EY. By the late 1990s he was ready to move back to London.
But a chance meeting with a director of corporate finance adviser Loita Capital resulted in his settling in Johannesburg instead, where he joined Loita’s pan-African investment banking operations.
“That was the best decision I have ever made. I am still fascinated with the melting pot that is Africa.
” It has been amazing to be part of the evolution of the continent, politically and economically, and to see how the younger generation embraces globalisation,” he says.
In 2007, Teeroovengadum joined private equity firm Actis, which created the first real estate fund to invest in A-grade shopping centres on the continent. AttAfrica was formed in September 2014 to house the sub-Saharan African assets of Hyprop Investments Attacq and Atterbury.
Today AttAfrica owns a portfolio of five shopping centres, including Accra Mall, West Hills Mall and Achimota Mall in Ghana, and Manda Hill in Lusaka, Zambia.
Teeroovengadum believes it is becoming increasingly important to own malls in Africa that dominate their catchment areas, irrespective of whether they are 14,000m² or 40,000m².
He says investors also have to stop painting all African countries with one brush.
“Ghana and Côte d’Ivoire may be neighbours but they are two vastly different markets and each requires a unique investment approach,” he says.
He concedes that some countries, including Zambia, Ghana and Kenya, are heading for oversupply, which has prompted AttAfrica to broaden its geographical focus to West Africa.
Nairobi is a case in point; it has at least four new shopping centres in the pipeline.
“There’s no doubt some will struggle,” he says.
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Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.