CDC, a development finance institution owned by the UK government, has confirmed plans to invest in Sub-Saharan Africa’s lucrative real estate industry.
The British company recently announced that it has invested $30 million in the Momentum Africa Real Estate Fund (MAREF), an African commercial real estate development joint venture between Momentum Global Investment Management and Eris Property Group.
“Our investment in MAREF will help them to increase the stock of high-quality real estate in Africa, bringing economic opportunity and job creation to the continent,” said CDC’s Managing Director, Intermediated Equity, Murray Grant.
“We will work closely with the fund to help them raise standards across Africa’s real estate development sector and bring much-needed skills to new markets, thereby supporting the growth of local developers and contractors,” Grant continued.
The investment is designed to support the development of Greenfield industrial, residential and commercial real estate opportunities across Sub-Saharan Africa.
CDC has been investing in Africa for several years now. In 2013, CDC invested in Actis, a leading investor in growth markets across Africa, Asia and Latin America. CDC invested $10.8 million into a project known as the Actis Sunrise Development. The investment sought to facilitate the building of a mixed-use development in Ghana.
In 2016, CDC began what is known as the 14Trees project, a joint-venture between LafargeHolcim, a global leader in building materials based in Switzerland, and CDC.
The venture aimed to accelerate and scale up the production and commercialisation of Durabric bricks, an environmentally-friendly, affordable alternative to the clay burnt bricks widely used across Sub-Saharan Africa, and other innovative green building solutions. LafargeHolcim and CDC jointly committed $10 million to the joint venture.
Now CDC’s latest venture is set to take root in 2019. It comes at a time when transparency in the Sub-Saharan real estate market has improved, according to a report known as the JLL Global Real Estate Transparency Index
The level of openness is helping to pull in international investment.
The 2017 survey found that Botswana was among the top five global improvers for transparency, despite being a relatively small market by global and regional standards.
Today, CDC is just one of many international investors keen to capitalize on the region’s growing real estate market. The group is confident that its investment will yield substantial returns.