Mara Delta seeks to step into Uganda
Fund’s strategy aims to mitigate concentration risk
MARA DELTA, the multilisted property fund formerly known as Delta Africa that offers investors access to high growth opportunities on the continent, is in negotiations to further expand its geographical footprint in Africa into Uganda.
Bronwyn Corbett, the chief executive of Mara Delta, said yesterday that this geographical expansion was in line with the fund’s strategy to mitigate concentration risk.
Corbett said the fund had increased its geographical footprint to five countries across the continent in the year to June with the acquisition of new assets in Zambia, Mauritius and Kenya.
Assets
The fund also has property assets in Mozambique and Morocco.
Corbett said the group’s strategy remained to expand its property portfolio throughout targeted countries in Africa, with assets that would provide sustainable long-term, US dollar-based income from high quality counterparties with a core focus on enhancing shareholder value and dividend yield.
She added that Redefine Properties would be seeking a managed exit over the next few months from Mara Delta.
This follows listed Redefine Properties last week announcing its intention to acquire the entire issued share capital of listed Pivotal Property Fund, which has a shareholding in Mara Delta. Corbett said the strategy of listed Redefine Properties excluded Africa.
“The 13.1 percent shareholding in the company will be sold to a suitable new strategic shareholder whose African aspirations mirror that of Mara Delta,” she said.
Corbett added that Pivotal and Mara Delta had as a result mutually agreed not to proceed with the sale of the Oando Wings office complex in Nigeria.
Mara Delta, then called Delta Africa, and Pivotal had announced in November the establishment of a new strategic relationship to create a property powerhouse on the African continent.
Mara Delta reported yesterday that a 4.1 percent growth in distributions a share to $11.75 (R169.87) in the year to June.
Rental income increased 65.3 percent for the full year due to the impact of the assets acquired in the last quarter of the previous financial year and new acquisitions and included the impact of the US dollar-based rental escalations and the three yearly 10 percent rent escalations in Anfa Place Shopping Centre in Morocco. Concessions Operating costs as a percentage of revenue rose by 0.7 percent from 25 percent largely because of concessions provided to tenants at Anfa Place Shopping Centre related to the planned upgrade next year of the centre and to settle legacy tenancy issues.
Corbett said the strategy from the outset was to access emerging market yields, offsetting the associated risk with strong counterparties and dollar-based leases. Therefore it was pleased with the results achieved in a challenging global market.
She said the fund focused during the year on optimising its debt profile and closed finance deals with Investec Bank, Barclays Bank and Banco Unico.
The successful conclusion of the Cosmopolitan Mall acquisition in Zambia would introduce an additional finance partner in the Bank of China, which had committed a $77m facility for this transaction, she said.
“Together with our existing relationship with Standard Bank across the continent, these new finance partners place us in a strong position to access cost effective finance packages matched to our portfolio,” she said.
Corbett said Mara Delta’s focus going forward would remain on expanding its asset base in its current countries of operation and growing into targeted jurisdictions.
Shares in Mara Delta remained flat on the JSE yesterday, closing at R19.25.