13 February 2013

South Africa: Sanlam to Launch African Property Fund

South African financial services group Sanlam will launch its sub-Saharan Africa real estate fund at the end of March to facilitate participation in property markets across the region.

"While the majority of the developed world is struggling to find yield, the African continent currently has seven of the top 10 growing economies in the world," Sanlam Investments CEO Johan van der Merwe said in a statement on Monday.

"This creates a unique opportunity for the Sanlam Group to take advantage of its positioning and provide the investor community with a suite of products that facilitates participation in these markets."

The real estate fund forms part of Sanlam's growth strategy in Africa and building on its established network in 11 countries across sub-Saharan Africa.

"This fund aims to take advantage of the favourable supply and demand imbalance for quality real estate across the subcontinent, as well as its strengthening demographics and resultant return characteristics," Van der Merwe said.

Sanlam developed the fund as there was a dearth of platforms through which prospective investors could access the market.

"This fund has been structured to the highest international standard to provide an acceptable platform for both local and international investors to tap the growth potential of the Sub-Saharan Africa real estate market," said Sanlam Properties CEO Thomas Reilly.

"It has taken over two years of hard work to finalise and we have been able to secure a strong pipeline of select assets with attractive returns."

The fund will be listed on the Stock Exchange of Mauritius, and excludes investments in South African property.

"Sanlam expects to grow a portfolio in excess of US$500-million over the medium term with the bulk of initial investors expected to be sourced from the US and southern African investor markets," the company said.

The initial capital-raising process will close on 31 March.

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