Mara Delta (formerly Delta Africa), the first multi-listed property fund to offer international property investors direct access to immediate high growth opportunities on the African continent outside of South Africa, has announced its acquisition of a 50% interest in a new A-grade Zambian retail property, from Rockcastle Global Real Estate Company Limited (“Rockcastle”).
The Company also announced that it has secured new funding from the Bank of China for USD 77 000 000.
Commented Chief Executive, Bronwyn Corbett:
“This is our third investment into dominant retail assets in Zambia with the same strong in-country partner at an attractive purchase yield attributable to shareholders of 10.4%”.
“Cosmopolitan Mall met our rigid investment requirements for long dollar-based anchor leases and strong counter parties. This early stage mall is dominant in its region and current trading densities are very encouraging”.
“Our investment in Cosmopolitan Mall will significantly reduce Mara Delta’s overall exposure to the Kwacha to below 10% of income. We are also very excited to announce a new USD 77 000 000 funding facility from Bank of China. The proceeds of this facility will be used to part-fund the Cosmopolitan Mall acquisition and to settle more expensive debt relating to our other Zambian retail assets”.
“The favourable terms of the Bank of China facility at 6 months’ USD LIBOR + 4% effectively means we are financing the Cosmopolitan Mall acquisition at 4%.”
In addition to part-funding the Cosmopolitan Mall acquisition, the USD 77 000 000 Bank of China facility will be used to:
– release the outstanding debt in relation to the Cosmopolitan Mall acquisition;
– refinance the outstanding debt on Cosmopolitan Mall as held by the other 50% shareholder; and
– refinance all outstanding debt on the Kafubu Mall and Mukuba Mall properties in Zambia (announced to the market in October 2015), including that of the other 50% shareholder/s outstanding debt.
Cosmopolitan Mall, located in Lusaka, Zambia comprises 25 900 m2 of gross lettable area with 1 300 parking bays and is anchored by major multinational tenants including Shoprite (10% of rentals), Game (13% of rentals), as well as The Foschini Group (6% of rentals) with dollar underpinned leases. Other major tenants include Pep, Jet, OK Furniture, Woolworths, Ackermans, Truworths, Max Clothing, Carnival Furnishers, Edgars and Mr Price.
The anchor lease term is for a period of 10 years, expiring in 2026, and escalates in line with annual US CPI. There are zero vacancies in the shopping centre.
Valued independently at USD 74 350 000 by Quadrant Properties Proprietary Limited as at 31 March 2016, the Company’s purchase consideration amounts to USD 24 167 597.
It is anticipated that the acquisition will be implemented on or about 30 September 2016.