Anadarko Building in Maputo, Mozambique
Delta International Property Holdings Limited is the first multi-listed property fund to directly invest north of South Africa in select lucrative and fast-growing African property markets, mainly Mozambique and Morocco. Currently listed on the Stock Exchange of Mauritius (“SEM”) and the AltX of the JSE in South Africa, the fund offers international property investors direct access to immediate high growth opportunities on the African continent.
Delta International today announced its consolidated interim financial statements for the three months and the nine months ended 31 March 2015 as a focused fund specialising in premium real estate assets in high-growth economies in Africa, excluding South Africa.
“Delta International was well supported by the market, successfully raising US$39 million after the reporting period through the issue of new shares. The equity, together with new debt facilities were used to acquire the initial properties and two additional strategic properties in Mozambique after the reporting period.
“The equity raise brought on additional institutional shareholders and we are particularly proud of the support of the Public Investment Corporation, the largest pension fund in South Africa, who now own 25% of the shares in issue,” commented Bronwyn Corbett, Director of Delta International.
During the 3 months from 1 January 2015 the focus has been on restructuring the Company and raising additional capital to complete the acquisition of initial and further strategic assets in Mozambique. The Company subsequently raised US$39 million on 22 April 2015 through a private placement, issuing 26 354 444 new ordinary shares.
The proceeds of the capital raise will be utilised to fund the acquisition of the Vodacom Building, Zimpeto Square and to retire a portion of debt associated with the completed acquisition of the Hollard Building. All these assets, including the Anadarko Building which was the first asset introduced into the portfolio, are based in Maputo, Mozambique and are in line with the investment criteria of sustainable income from high quality tenants.
Anfa Place retail centre in Casablanca, Morocco, is performing well with vacancies improving monthly as a result of management continuing to work with the centre management on bedding down the asset in order to optimise its full potential. McDonald’s has recently been signed up as a new tenant and the much anticipated opening of the adjacent Four Season’s hotel in September 2015 should see further reductions in vacancies and potential uplift in the footfall.
“From a macro-economic perspective Morocco has seen a record harvest in cereal. With agriculture being one of the main industries this should lead to positive GDP growth and potential strengthening of the Moroccan Dirham. We anticipate a stronger exchange rate will also benefit us since the currency’s basket weightings changed in April to 60% for the Euro and 40% for the dollar, reducing the euro’s weighting due to changes in trade,” continued Corbett.
Delta International was initially incorporated in Bermuda on 16 May 2012 and transferred its primary listing from the Bermuda Stock Exchange to the SEM on 30 March 2015. The Company has a secondary listing on the AltX of the JSE and is in the process of migrating its listing to the main board of the JSE and will maintain two primary listings going forward. The rationale for the migrations was to attract a more diverse shareholder base and to increase the liquidity of the shares.
The Fund’s objective is to bed down the existing assets, and to further increase the asset base with quality assets in Mozambique and Morocco. Delta International in general does not assume development or leasing risk and will not acquire incomplete developments with unsecure income streams or vacant buildings with no immediate lease or income generating ability.
The loan to value ratio of the Group at 31 March 2015 was 54.6% which is greater than the targeted 50%. This is temporarily higher than targeted due to debt facilities drawn down on to pay for deposits on the Hollard Building and the Vodacom Building which had not yet transferred by 31 March 2015.
“Delta International’s first phase growth strategy is to establish critical mass in Mozambique and Morocco. Thereafter the Fund plans to prudently expand over time into other opportune markets.
“We remain confident on the prospects of the business and the future returns,” concluded Corbett.