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Two African Firms Pledge Over Half Billion for New Development

Nairobi-kenya-Africa.jpg While talk is growing over niche emerging real estate markets in Africa, two firms have stepped to the plate and are pledging a total $528 million for investment in new development.

Nairobi-based Actis, one of the largest private equity investors in the world's poorest countries, announced it has raised $278 million.  Its fund, Actis Africa Real Estate 2, will back retail and office development in west, west and southern Africa.

Johannesburg-based First Rand Ltd. previously announced it plans to invest proceeds of its $250 million fund raising exercise across major West and Southern African real estate markets - particularly, Nigeria, Ghana and Angola.  Like Actis, FirstRand said it will earmark most of its funds in high-grade retail and commercial properties.

See related news story on WORLD PROPERTY CHANNEL:

  • Johannesburg Fund Raises $250 Million for Mixed-Use Projects in Nigeria, Ghana and Angola, Oct. 17, 2012

Earlier this year, Actis officials said they were looking to invest around $300 million annually in Africa, with much of that earmarked for bigger markets such as South Africa.

Paul Fletcher, a senior partner at Actis, said in a statement the fund showed a broader investment plan by Actis to build domestic infrastructure in the emerging markets.

Fletcher said that although African economies are growing quickly, second only to Asia, there is "a lack of sufficient liquidity in Africa's public capital markets, and investors are increasingly turning to private equity to tap into the continent's economic growth."

"Sub-Saharan Africa has a population of 800 million people and is the fastest urbanizing region in the world but lack of capital often constrains real estate development," David Morley, head of real estate at Actis, said in a statement.

"Governments recognize the crucial role of FDI (foreign direct investment) in this regard."

Infrastructure development is a capital-intensive business that most African governments struggling with large budget deficits cannot afford, making other regions more attractive to investors, Bloomberg reported.

Actis has over $300 million invested in the east African region.

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