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Nedbank CIB Property Finance Funds the First REIT in Ghana

Anna Lyudvig
Feb. 16, 2024, 10:43 a.m.
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The Nedbank Corporate and Investment Banking (CIB) Property Finance Division has funded the acquisition of One Airport Square by the Sentinel Commercial REIT (Sentinel REIT). 

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The Nedbank Corporate and Investment Banking (CIB) Property Finance Division has funded the acquisition of One Airport Square by the Sentinel Commercial REIT (Sentinel REIT). 

One Airport Square is a 9-story mixed-use building with a commercial space of 2 000 m² and office space of 15 000 m² in the prime area of Accra’s Airport City. 

One Airport Square was acquired through a combination of equity and debt financing. 

Several local and international investors provided equity capital, while CIB Property Finance provided the debt components of the acquisition, comprising a term loan facility and a short-term bridge facility. 

CIB Property Finance also provided bridging finance to the seller in respect of deferred payment to facilitate the transaction.

The Sentinel REIT is the first REIT to be licensed under the current REIT guidelines from the Securities and Exchange Commission (SEC) of Ghana. 

The deal marks a milestone for both CIB Property Finance and the Ghanaian real estate market, as it introduces a new and innovative way of investing in commercial property. 

REITs are entities that own and operate income-producing real estate assets and distribute most of their income to shareholders.

The Sentinel REIT is a close-ended scheme that aims to provide investors with regular and stable income with sustainable growth, liquidity and capital growth per share from investments in commercial real estate. 

The strategy for the REIT is to invest in a portfolio of commercial real estate assets that have attractive investment fundamentals in terms of prime location, architectural design, stable tenant base and properly structured leases. 

It aims to achieve long-term appreciation of its assets and maximise returns on capital employed. 

The REIT presents an opportunity for discerning investors to balance their investment portfolio by investing in assets that generate cash flow that is hedged against any depreciation of the Ghanaian cedi and to participate in a stable and consistent stream.

“We are pleased to have supported Sentinel in closing the first Ghanaian REIT under the new SEC guidelines. Nedbank CIB leveraged its intellectual capital to enable the structuring and delivery of a multifaceted funding solution in support of this landmark transaction,” said Edem Dzakpasu, West Africa Regional Executive for Nedbank CIB. 

“The REIT sector offers potential for growth as institutional investors diversify their investment portfolio with real estate income-generating assets underpinned by strong investment fundamentals. As a leading REIT and property lender on the continent, we are pleased to have had a key role in making this happen,” he said. 

CIB Property Finance assisted with the acquisition of Sentinel’s first seed asset. 

The One Airport Square property was originally owned by one of Nedbank’s clients, Actis. 

As Nedbank already knew the property, it enabled a seamless transaction between the two parties. 

A key part of enabling a seamless transaction was providing short-term bridging facilities to both clients. 

“We are proud to be part of this landmark deal, which demonstrates our expertise and capabilities to manage large transactions in West Africa seamlessly. We have a long-standing relationship with Actis, and we are delighted to welcome Sentinel as a new client. We look forward to supporting their growth and expansion in the region. We believe that the REIT sector has a lot of potential in Ghana, and we are excited to be the first lender to fund the first REIT in the country,” said Gerhard Zeelie, Divisional Executive of Nedbank CIB Property Finance Africa.

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