Sanlam's pan Sub-Saharan Africa Real Estate Fund will launch at the end of March.
The fund will allow local and international investors to invest in high quality retail and commercial real estate across select Sub-Saharan African countries.
Johan van der Merwe, chief executive of Sanlam Investments says: "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. 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. 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 believes the fund forms an integral part of the Sanlam growth strategy into Africa and takes advantage of the group's large, established footprint which currently has substantial businesses in 11 key countries across the African sub-continent.
Thomas Reilly, chief executive of Sanlam Properties, says the problem for the sophisticated investor to date has largely been to find an internationally acceptable product to access this growing 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 African real estate market.
"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. Investors will benefit from the first mover advantage created by the launch of this fund,” says Reilly.
"We intend listing the fund from inception on the Stock Exchange of Mauritius and will target double digit US Dollar investor returns. Given the fact that the fund assumes little or no development risk, these returns are proving to be attractive to investors, particularly when taking into account the lowered risk profile of the fund."
Sanlam expects to grow a portfolio in excess of USD500m over the medium term with the bulk of initial investors expected to be sourced from the US and Southern African investor markets. It plans to close the initial capital raising process on 31 March with the target audience being the larger institutions in the savings industry. The fund excludes investments in South African real estate.