Business Day Live
Alistair Anderson
DELTA Africa is set to create a joint venture with a Middle Eastern investor as it looks for expansion opportunities in Morocco, CEO Bronwyn Corbett said.
“We own assets spread across various countries on the African continent. We feel that our Moroccan assets are performing well and … that country has become an attractive investment destination for many Middle Eastern investors. So, we are working on a tie-up with a Middle Eastern investor, which could help us to find opportunities in the country.
“The idea is to put together a separate Moroccan-focused real estate investment trust (Reit) structure, which can benefit from an exciting retail sector,” she said on Tuesday.
“Morocco is seen as a developed country with close ties to Europe. Its shopping centres are doing very well, with many European brands trading strongly there. There are also various people who live in Spain and commute to Morocco for work. We want to invest in this economy, and details on our Moroccan plans will be unveiled soon,” she said.
Head of listed property funds at Stanlib Keillen Ndlovu said the Moroccan expansion could be a good strategic move. “Delta Africa has a presence in Morocco with a team on the ground, so it makes sense to explore a listing opportunity once the Reit legislation there comes on line, as the company can tap into capital markets in order to unlock their pipeline,” he said.
“Morocco is linked to the Middle East and there could be appetite from Middle Eastern investors for a Reit-type structure,” he said.
Delta Africa will be renamed Mara Delta on Wednesday, following a merger with Mara Diversified Property Holdings that became effective this week.
Ms Corbett said that once all its existing deals were completed, Mara Delta would have a $200m market capitalisation, making it the largest African-focused listed property fund. It would have more than trebled in value since it listed in July 2014.
She said it was set to achieve dividend growth of 3%-5% in US dollars for the year to June.
“I appreciate that some investors may feel that our African investment plans may be slow to come to fruition. We have found that each country works very differently from the next, with us needing the right financial support and tax understanding in each. I believe the fund is gaining traction across Africa nonetheless, and paying a dollar-denominated dividend is good for rand-hedge investors,” Ms Corbett said.
Delta Africa reported last Friday that for the nine months to March, it had declared a profit of $22.1m, compared with a $4.9m loss in the comparative nine-month period.
“We continue to enjoy strong support from our key institutional shareholders, having raised $28.6m and $8m post the period, respectively.
“These raises were at a premium to net asset value and proceeds were deployed in expanding the portfolio through strategic acquisitions and reduced our cost of funding significantly,” she said.
