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Real estate is a growth catalyst but disparities exist

Standard Bank South Africa sees a growing consumer middle-class, powered by rapid urbanisation and shifting demographic trends as driving both property demand and growth opportunities in the real estate industry across the African continent.

“Increasingly, both foreign and local investors are seeing the growth potential of Africa, spurred by rising consumer spending of Africa’s developing middle class”, said Gerhard Zeelie, Head of Real Estate Finance (Rest of Africa) for Standard Bank. “Economic growth and ongoing investments in infrastructure are opening up previously inaccessible markets.”
Some of the key African countries that are realising opportunities for real estate investment include Namibia, Nigeria, Ghana, Kenya, Mozambique and Zambia. Although lower commodity prices had impacted on growth forecasts for some of these countries, there is still a shortage of quality real estate assets, he said.
However, real estate investments in African markets are not without risk, Zeelie warned. Among which were the impact of unpredictable regulatory changes, complex legal regimes, volatile local currencies, and limitations on investment timeframes and exit strategies.
In particular, regulatory uncertainty precipitated by the ever-shifting policy environment is impacting negatively on investor sentiment, he noted. “It creates a climate of risk aversion, with some investors reluctant to commit themselves to developments with long planning horizons. Instead they hedge their bets by adopting wait-and-see approaches.”
Yet, despite these risks, many investors and developers were taking a long-term view to a market’s macro-economic outlook, rather than viewing short-term cyclical shocks in isolation.
However, investing in Africa is by no means a one-size approach, each market has its own specific dynamics and opportunities, he said.
“Investors must remember that the continent is not a single, homogenous jurisdiction. Investors often make the mistake of regarding Africa as a uniform landscape but it’s critical to identify the countries and sectors that offer the best opportunities and match them with their own expertise.”
A key factor to consider is the long term sustainability of generating foreign currency returns in markets which are experiencing increasing commercial and regulatory pressures to move to local currency economies.
Yet, in a number of markets across Africa, demand for high-quality retail, office and residential space continue to outstrip supply, he said. International and local developers are looking to increase their exposure across markets in Africa, and for opportunities to establish a strong retail foothold in cities where little or no formal retail existed.
“We are seeing the scale of developments growing rapidly, with increasing participation from local developers who are seeing and starting to capitalise on opportunities in this space,” Zeelie said.

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Following reverse listing, public can now acquire shareholding in Paratus Namibia

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20 February 2020, Windhoek, Namibia: Paratus Namibia Holdings (PNH) was founded as Nimbus Infrastructure Limited (“Nimbus”), Namibia’s first Capital Pool Company listed on the Namibian Stock Exchange (“NSX”).

Although targeting an initial capital raising of N$300 million, Nimbus nonetheless managed to secure funding to the value of N$98 million through its CPC listing. With a mandate to invest in ICT infrastructure in sub-Sahara Africa, it concluded management agreements with financial partner Cirrus and technology partner, Paratus Telecommunications (Pty) Ltd (“Paratus Namibia”).

Paratus Namibia Managing Director, Andrew Hall

Its first investment was placed in Paratus Namibia, a fully licensed communications operator in Namibia under regulation of the Communications Regulatory Authority of Namibia (CRAN). Nimbus has since been able to increase its capital asset base to close to N$500 million over the past two years.

In order to streamline further investment and to avoid duplicating potential ICT projects in the market between Nimbus and Paratus Namibia, it was decided to consolidate the operations.

Publishing various circulars to shareholders, Nimbus took up a 100% shareholding stake in Paratus Namibia in 2019 and proceeded to apply to have its name changed to Paratus Namibia Holdings with a consolidated board structure to ensure streamlined operations between the capital holdings and the operational arm of the business.

This transaction was approved by the Competitions Commission as well as CRAN, following all the relevant regulatory approvals as well as the necessary requirements in terms of corporate governance structures.

Paratus Namibia has evolved as a fully comprehensive communications operator in Namibia and operates as the head office of the Paratus Group in Africa. Paratus has established a pan-African footprint with operations in six African countries, being: Angola, Botswana, Mozambique, Namibia, South Africa and Zambia.

The group has achieved many successes over the years of which more recently includes the building of the Trans-Kalahari Fibre (TKF) project, which connects from the West Africa Cable System (WACS) eastward through Namibia to Botswana and onward to Johannesburg. The TKF also extends northward through Zambia to connect to Dar es Salaam in Tanzania, which made Paratus the first operator to connect the west and east coast of Africa under one Autonomous System Number (ASN).

This means that Paratus is now “exporting” internet capacity to landlocked countries such as Zambia, Botswana, the DRC with more countries to be targeted, and through its extensive African network, Paratus is well-positioned to expand the network even further into emerging ICT territories.

PNH as a fully-listed entity on the NSX, is therefore now the 100% shareholder of Paratus Namibia thereby becoming a public company. PNH is ready to invest in the future of the ICT environment in Namibia. The public is therefore invited and welcome to acquire shares in Paratus Namibia Holdings by speaking to a local stockbroker registered with the NSX. The future is bright, and the opportunities are endless.