Delta Africa Property Holdings acquires 50% stake in two Zambian malls with dollar underpinned leases

Posted On Thursday, 22 October 2015 10:38 Published by
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Delta Africa Property Holdings acquires 50% stake in two A-grade Zambian retail properties anchored by multi-national tenants with dollar underpinned leases.

Kafubu Mall Zambia

Delta Africa through its wholly-owned subsidiary, Delta International Mauritius, entered into an agreement with Rockcastle Global Real Estate Company, Ndola Kafubu Investments and Kitwe Mukuba Investments, in terms of which Delta will effectively acquire 50% interests in Kafubu Mall and Makuba Mall in Zambia.

Delta has identified these dominant retail Properties in Ndola and Kitwe, Zambia and the 50% acquisition of the Properties presents a unique opportunity to enter a new market in Africa.

"Not only does the investment meet the rigid investment criteria of strong counter party leases, underpinned by long-term dollar-based leases, it also provides Delta with a strong in-country partner, who will provide invaluable knowledge and insight into the Zambian market" the company said.  

Delta has a long-term hold strategy for the Properties and has priced in the risks associated with the short-term mine closures.   

Kafubu Mall located in Ndola, has a 11,964m² gross lettable area anchored by Shoprite (33% of rentals), OK Furnishers (4%), Innscor Africa (5%), Spur (4%), Jet (4%) and Edgars Active (3%). It has a weighted average gross rental per square metre of $12.24. The Kafubu Mall part of the transaction would be worth 4.08m and the Makuba Mall part is valued at 17.5m, would be purchased at a yield of 8.4%.

Mukuba Mall  ZambiaMukuba Mall is located in Kitwe and has a gross lettable area of 28,235m². Anchor tenants include Game (17% of rentals) Shoprite (14%), Pick n Pay (6%), Mr Price (6%), Woolworths (5%), Carnival Furnishers (4%), Innscor Africa (3%), Spur (3%), FNB (2%) and Barclays (2%). The weighted average gross rental per square metre is $14.45. The stake is also being acquired at a yield of 8.4%.

Delta Africa CEO Bronwyn Corbett said the expansion into Zambia would send a positive message to South African listed property investors.

The decision to grow more aggressively and spread into more African countries than originally envisaged at listing would boost the fund, which had struggled to stabilise in Africa, she said.

“It’s been tough. We have been in Mozambique and Morocco before this, basically looking at investing in office properties and retail properties, respectively.

It took us a while to make acquisitions there. But now we have set up a bigger team and our management is moving to Mauritius,” Corbett said.

Last modified on Thursday, 22 October 2015 16:05

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