Growthpoint Investec expands African footprint backed by Standard Bank’s funding model

AFRICA– Growthpoint Investec African Properties Limited (GIAP) has expanded its sub-Saharan footprint, following the acquisition of properties from the RMB Westport Fund I (RMBW). This was made possible through the funding solution of Standard Bank’s Real Estate Financing division.

The Group was presented with the opportunity to acquire a nine-asset portfolio in West and Central Africa from RMBW after it concluded transactions with AttAfrica for the acquisition of Manda Hill in Lusaka, Zambia, and Achimota Mall in Accra, Ghana.

GIAP needed a financing solution that would provide the liquidity needed to complete the full acquisition of the RMBW portfolio ahead of any future fundraising exercises within agreed transaction timelines.

It had completed its fund raising in March 2018 and strategically timing its deployment of capital to fund its first two acquisitions in June and July 2019.

Following a competitive bid, Standard Bank was able to create a suitable funding structure and adequate liquidity to complete the acquisition, strategically providing funding of US$50 million on an equity bridging basis, along with the balance of the fund equity to successfully close the transaction.

The Bank said discussions started in the early part of 2019 and it was able to structure and implement the deal in line with the transaction closing milestone.

“Over the course of the primary transaction, elements of the deal structure such as timing, security structure and equity stakes evolved, but Standard Bank was able to adjust to fulfil the client requirements,” Adeniyi Adeleye, head of Real Estate Finance for Standard Bank Africa Regions, said.

“Standard Bank has a long history as a leading financial institution across sub-Saharan Africa,” managing director of Growthpoint Investec African Properties, Thomas Reilly, said.

“As a result, their team has over time become very familiar with the assets we own as well as each asset’s financing requirements, which facilitates an understanding of our needs and the overall lending process.

“They operate in all the jurisdictions we have a presence in, thus having a deep knowledge of the specific intricacies and requirements of ours from a financing perspective in each of these markets, as well our finance requirements from a group perspective,” Reilly said.

The facility was utilised to complete the acquisition with additional flexibility and headroom to draw any excess funds over a further extended period. Standard Bank underwrote the entire funding of the US$50milion, 18-month equity bridge facility.

“This transaction facilitated one of the largest real estate transactions ever concluded across the various regions in Africa that we operate in. It has materially elevated our business in terms of its scale and its ability to impact the broader markets and the asset class,” Reilly said.

“The input and advice from the team at Standard Bank Real Estate Team was excellent throughout. We look forward to working further with them in the future,” he said.

GIAP is expected to support the development of capital markets for real estate as an asset class across the countries in which it operates, thereby contributing to the wide-ranging developmental impact which the real estate sector can have in such markets.

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