A funding solution from Standard Bank’s Real Estate Financing division has helped Growthpoint Investec African Properties Limited (GIAP) expand its sub-Saharan footprint, following the acquisition of properties from the RMB Westport Fund I (RMBW).
Standard Bank acted as Mandated Lead Arranger, underwriter and coordinator and agency functions with transactional banking solutions to follow.
Historically, property acquisition in sub-Saharan Africa has been on a bilateral single asset deal basis, and GIAP recently concluded transactions with AttAfrica for the acquisition of Manda Hill in Lusaka, Zambia, and Achimota Mall in Accra, Ghana. Subsequently, the Group was then presented with the opportunity to acquire a nine-asset portfolio in West and Central Africa from RMBW.
Having only completed its fund raising in March 2018 and strategically timing its deployment of capital to fund its first two acquisitions in June and July of 2019, GIAP needed a financing solution that would provide the liquidity needed to complete the full acquisition of the RMBW portfolio ahead of any future fundraising exercises within agreed transaction timelines.
Following a competitive bid, Standard Bank was able to create a suitable funding structure and adequate liquidity to complete the acquisition, strategically providing funding of US$50million on an equity bridging basis, along with the balance of the fund equity to successfully close the transaction.
Discussions started in the early part of 2019 and Standard Bank was able to structure and implement the deal in line with the transaction closing milestone. Adeniyi Adeleye, Head, Real Estate Finance for Standard Bank Africa Regions emphasises that “Over the course of the primary transaction, elements of the deal structure such as timing, security structure and equity stakes evolved, but Standard Bank was able to adjust to fulfil the client requirements.”
Thomas Reilly, MD of Growthpoint Investec African Properties, says, “Standard Bank have a long history as leading financial institution across sub-Saharan Africa. As a result, their team has over time become very familiar with the assets we own as well as each asset’s financing requirements, which facilitates an understanding of our needs and the overall lending process. They operate in all the jurisdictions we have a presence in, thus having a deep knowledge of the specific intricacies and requirements of ours from a financing perspective in each of these markets, as well our finance requirements from a group perspective.”
The facility was utilised to complete the acquisition with additional flexibility and headroom to draw any excess funds over a further extended period. Standard Bank underwrote the entire funding of the US$50m, 18-month equity bridge facility.
“This transaction facilitated one of the largest real estate transactions ever concluded across the various regions in Africa that we operate in. It has materially elevated our business in terms of its scale and its ability to impact the broader markets and the asset class,” says Mr Reilly. “The input and advice from the team at Standard Bank Real Estate Team was excellent throughout. We look forward to working further with them in the future.”
Following the financial close in December 2019, Standard Bank distributed 50% of the facility to another South African Bank, illustrating the robustness of its structuring and financing solution and investor demand for the borrower and the asset class in the market.
“The success of this transaction further cements Standard Bank South Africa’s position as the leading real estate finance house in Africa,” says Mr Adeleye.