Novare Equity Partners, the Cape Town-based property fund manager, has added to the growing momentum of the private real estate markets in sub-Saharan Africa with the final closing of its second property fund.
The firm announced today it has raised $350 million for Novare Africa Property Fund II, via which it intends to make investments in development projects in countries including Nigeria, Zambia and Mozambique.
The final closing brings a fundraising program stretching more than two years to a close. Novare held a $150 million first closing for the vehicle in April 2014.
The fund is significantly larger than the firm’s first effort, Novare Africa Property Fund I, which closed on $81 million in July 2010, when the private equity real estate sector in the region was in its infancy. Since then, the market has grown rapidly with its leading managers, London-based Actis and Johannesburg-based RMB Westport, able today to raise funds of around $500 million each. A growing cohort of other managers, including Novare now, have demonstrated repeated traction with institutional capital too.
Derrick Roper, chief executive officer of Novare, said in the announcement that the fund had already been partially deployed with capital used for investments in the retail and logistics sectors in a bid to capitalize on the region’s growing domestic consumption. Investments by the firm include the Novare Lekki mall in Lagos, the Novare Gateway mall in Abuja, the Novare Matola mall in Maputo and land for the development of the Novare Great North mall in Lusaka.
He said: “The retail sector in Africa remains among the most under-penetrated, with significant potential for investors. Facilities for retailers to operate from, as well as to support their logistical operations, remain scarce,” said Roper.
“The continent’s challenges have tended to over-shadow its longer term potential, and we believe that this stage of the economic cycle presents significant opportunities for superior future investment returns.”