The Board of Directors of the Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, approved up to $100 million in financing for an investment fund that will produce quality commercial real estate in sub-Saharan Africa. The region is one of the fastest-urbanizing areas in the world, but suffers from significant underinvestment in office space.
The Actis Africa Real Estate Fund 2 LP will invest primarily in greenfield property developments in high-growth markets in East and West Africa, with a focus on retail and office sectors, as well as some residential and mixed-use development. Target countries include Ghana, Kenya, Nigeria, Tanzania, Uganda and Zambia. The fund has a target capitalization of $250 million.
In many cases, the fund’s investments will produce the first international-standard retail mall and/or class-A office building in the targeted markets.
The fund will benefit from Actis’ practice of taking controlling stakes in its investments to fully manage the development process and generate returns, starting from the initial purchase of land rights, then deal structuring, and finally securing project-level finance.
“The lack of retail and office space in East and West Africa is inhibiting the growth of businesses in both regions – a problem exacerbated by rapid urbanization across the continent,” OPIC President and CEO Elizabeth Littlefield said in a statement. “By introducing the expertise and skills necessary to make prime real estate development for growing businesses commercially sustainable, Actis will help spur economic growth on the continent.”
Actis was established in 2004 and currently has more than $5 billion in total assets under management globally and 120 investment professionals in nine offices, including 33 investment professionals in four offices in Africa.