28 September 2017
Reporter: Theo Andrew

Pension funds driving investment in West African real estate

Investment into West African real estate is primarily being driven by pension funds, according to Thomas Reilly, head of African real estate at Investec.

Speaking on a panel at the Second West Africa Real Estate Investor Forum, Reilly addressed the issues surrounding the lack of capital in African real estate, despite the pension fund investment.

Reilly said: “Big pension funds are driving investment [into Africa], the middle east as well. It’s been a strategic change, investors have realised that the cycle is at a low point, so it becomes about funding partners … proving that the strategy is very important.”

In the last 12 months, Africa-focused private real estate fundraising totalled $450 million, with two funds closing, which shows a decrease on $850 million raised in 2016 and the exception figure of $3.83 billion, which was raised in 2015.

However, looking forward to 2018, Reilly expects that fundraising “will be up there”.

Another panellist, David Laskbrook, head of Africa real estate at Momentum, said: “US investors are interested, but when investors see the challenges in Africa over the past 18 to 24 months, they tend to back off.”

Reilly added: “Depth of capital in various markets hasn’t been there … by and large it has been a difficult sell. [Investors] are not prepared to come in and write a $30 million cheque, it’s not worth their time.”

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