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Momentum raises $50m for African Real Estate Fund

Anna Lyudvig
Feb. 5, 2015, midnight

Word count: 564

Momentum GIM, in conjunction with Eris Property Group, has successfully closed the first tranche of its African Real Estate Fund with $50m commitments from institutional investors, family offices and high networth individuals.

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Momentum GIM, in conjunction with Eris Property Group, has successfully closed the first tranche of its African Real Estate Fund with $50m commitments from institutional investors, family offices and high networth individuals.

The fund is aimed at long-term institutional investors and has a $250m fund raising target for its final close on June 30, 2015.

David Lashbrook, Head of Africa Investment Strategies at Momentum GIM, said: “We believe that investing in the development of commercial real estate is an exciting way for investors to support and participate in the rise of the African consumer.”

“The fund seeks to mitigate the key risks of property development prior to commencing construction and it targets a minimum internal rate of return of 18% in USD net of all fees over its eight year life,” he added.

The Mauritius-domiciled fund will focus on the development of retail, commercial and light industrial real estate in sub-Saharan Africa outside of South Africa.

The fund will seek opportunities in Ghana, Kenya, Nigeria, Mozambique, Rwanda and Zambia.

“We are really encouraged by the support we are receiving from investors, and this reflects the increasing focus by the investment community on selective growth opportunities in Africa,” Lashbrook said.

The launch of the Momentum Africa Real Estate Fund is in response to client demand to capitalize on Africa’s growing need for quality retail, office and industrial real estate.

This demand is driven by a fast growing population which is rapidly gaining increased spending power and is migrating to urban areas.

Warren Schultze, CEO of Eris Property Group, a property services and development company focused on sub-Saharan African markets, said: “In recent months we have been working on developing relationships in countries such as Ghana, Mozambique and Rwanda in anticipation of the launch of the fund. We have made excellent progress in identifying good partners and are considering a number of potential transactions. One such example is SIC Financial Services in Ghana, who have both the skills and the network to contribute significantly to the Momentum African Real Estate Fund initiative.”

“It is our intention to intensify our efforts in these countries in the next few months, as well as focus on additional countries including Nigeria and Tanzania, in order to explore additional projects. Our approach is to identify partners in these jurisdictions to assist us and participate economically in projects wherever possible, and we are seeking to expand our partner base, especially in the countries where we are not currently active,” he said.

The venture has already received support from local partners in Ghana.

Alice Osei Okrah, Head of Corporate Finance and Research at SIC Financial Services, said: “In the past few months we have had several discussions with Eris in Ghana and Johannesburg, and are enthusiastic about partnering with them on some exciting real estate projects in Accra which we hope to initiate in the next few months.”

Projects earmarked for development include an office complex in Accra, Ghana, a retail center in Maputo, Mozambique, an office / hotel in Kigali, Rwanda.

The plans for the Kigali project include the use of plant life as organic air conditioning that will reduce environmental impact and running costs.

A number of other projects are in the early stages of analysis.

Momentum Global Investment Management is the global investment arm of Momentum Investments, which provides specialist investment management services to retail and institutional clients, financial intermediaries and their clients in the UK and Europe, the Middle and Far East and South Africa.

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