Knight Frank is planning to launch a $300m (£150m) East African Property Fund within the next quarter that could float on the London Stock Exchange.
The company’s private equity arm, Rutley Capital Partners, will set up the fund. It will invest in prime properties in locations throughout Africa, including Kenya, Uganda, Tanzania, Malawi, Democratic Republic of the Congo, Zambia, Botswana, Namibia, Mauritius and South Africa.
Rutley Capital Partners partner Nick Burnell said he expected to raise between $100m and $200m of equity. Combined with debt, this will enable the fund to purchase $300m worth of properties.
“We have seen investor appetite for the fund in the sense of a demand for diversification globally and because there is nothing offering this kind of access in the market,” he said.
“In Africa, there are double-digit yields and good-quality tenants available who don’t constitute a credit risk.”
The fund plans to take advantage of an expected rise in value and growth within the region and intends to produce a return to investors of at least 20%.
Burnell said investors often demanded such vehicles be publicly listed. He said it may be listed on local exchanges in Africa, and perhaps the LSE.
This week, Knight Frank released a report on Africa stating that improving political stability has meant that economies are growing. Africa recorded GDP growth of 5% or more in each of the past three years.
