Actis raises $500m for new real estate developments in Africa

Actis says it has reached final closing on its third opportunistic private real estate fund, Actis Africa Real Estate Fund 3 (ARE3) and has raised more than $500 million, comfortably exceeding its original $400 million target. The leading growth markets investor had in October 2012 raised $278 million from Actis Africa Real Estate Fund 2.

“This successful fundraising is a further sign of confidence from our investors in our ability to identify the most compelling opportunities across Africa. With this new vehicle, they will satisfy part of the demand for institutional quality real estate in some of the fastest growing cities globally,” says David Morley who heads the Actis team that has investment professionals across offices in London, Johannesburg, Nairobi and Lagos.

ARE3, the largest opportunistic private real estate fund targeting sub-Saharan Africa raised in the market to date, has a diverse investor base, including pension funds, sovereign wealth funds, development finance institutions and endowments from Africa, Asia, Europe and North America.

The real estate fund will invest predominantly in prime retail, office and industrial developments in the capital cities of 7 – 8 sub-Saharan African markets, a statement by the company said.

Torbjorn Caesar, Senior Partner at Actis also commented: “We are delighted that investors have chosen to recognise our track record by committing their capital to our third real estate fund, and we look forward to continuing our contribution to the development of cities across Africa.”

Caesar says the company’s focus on real estate, energy and private equity, plus its over 60 decades heritage, place it in a unique position “to provide investors with access to the world’s growth markets”.

Over the past decade, Actis has through its real estate funds, invested in assets valued at $1.4 billion on a gross asset value basis.

With a growing middle class and increasing urbanisation amid high population growth, demand for real estate is growing in Africa. Several investors are exploiting this opportunity, investing several millions in the sector.

Last year Momentum GIM, in conjunction with Eris Property Group, completed the second close of the Momentum Africa Real Estate Fund raising $150 million. The final phase of fund raising is scheduled to conclude this year with aggregate commitments capped at $250 million.