Business Reporter
ZIMBABWEAN financial institutions are in the process of brokering a massive US$113 million (R1,8 billion or N$1,8 billion) deal involving the acquisition of an iconic property, The Grove Mall of Namibia, in Windhoek.
The two institutions involved are Stratus Capital Partners, an asset management firm and Bard Santner Markets Inc, a newly established Harare-based financial advisory and asset management company.
As lead financial adviser, Bard is closely working with Stratus, led by Chikuni Shenjere-Mutiswa, a chartered financial analyst whose experience in executive investment management spans two decades.
Bard is led by local banker Senziwani Sikhosana, who also has over two decades experience in banking, investment, property, and capital and money markets dealings.
Sikhosana works with a local business consortium, which includes Tatenda Hungwe, Alfred Mthimkhulu and international finance expert Vinod Bussawah from Mauritius.
Market sources in Pretoria, Windhoek and Harare where the deal is being structured say Bard and Stratus are working on a transaction, which will see South African property giant, Atterbury Property Holdings, owned by the JSE-listed Atterbury Group, selling the mall to Zimbabwean investors, mainly pension funds, keen to invest in the regional market to increase value for stakeholders. Atterbury is a real estate development, investment and management company.
It develops prime mixed-use, commercial, retail and industrial properties. From its South African roots, it has spread its wings across Africa and into Europe.
In the process, it has developed many properties in South Africa, sub-Saharan Africa and Europe worth billions.
Mr Sikhosana, the Bard chief executive, said: “We are not able to discuss the deal in the media at the moment, but we will let you know when we are ready to talk soon.”
Atterbury chief executive Armond Boshoff and Shenjere-Mutiswa, the Stratus boss, were not available for comment.
However, a Namibian source said the deal has all but been completed, with finer details only outstanding.
“Atterbury is selling a big stake in The Grove Mall of Namibia for N$1,8 billion. Zimbabwean companies (Bard and Stratus) are handling the deal,” a source said.
“The mall, which is dominated by top A-grade tenants, has an annual turnover of N$890 million. The investors in this deal are likely to be from Zimbabwe, mainly pension funds, especially given legislative reforms in that sector which are underway.”
Until recently, pension funds invested primarily in stocks and bonds, often using a liability-matching strategy. Now they increasingly invest in a variety of asset classes, including private equity, real estate, infrastructure and securities to hedge inflation.
The current Pension and Provident Funds Act in Zimbabwe is being amended through the Pensions and Provident Funds Bill to modernise and strengthen the regulation and supervision of the pensions industry, while giving them flexibility to invest in other markets.
There has been very little legislation on the subject of pensions law with the current law statute having been promulgated in 1976.
However, the adoption of the 20213 Constitution and the Justice Smith Commission of Inquiry of 2017 has brought with it great optimism and potential enormous impact on the pensions sector.
Provision of pensions is of fundamental economic and social importance, ensuring the successful delivery of adequate retirement income. The promise to pay a benefit during retirement to today’s workers, covers a period that can span many decades.
The capacity to meet these promises is one of the most important issues in the design of retirement systems.
All too often, policymakers mistakenly conclude that a pension system is financially healthy because it is generating short term surpluses. The effective supervision of pensions, and of the institutions that provide pension products and services are required to ensure the protection of pensioners.
Built Howard and Chamberlain Architects through investment from Atterbury Property, Attacq Ltd, The Frontier Property Trust and Demushuwa Property Developer (Pty) Ltd, The Grove, located in the Hilltop mixed-use estate in Kleine Kuppe in the southern Windhoek suburbs, corner Chasie Street and Frankie Fredericks Drive, is largest shopping centre ever to be developed in Namibia, measuring 52 000 square metres, at a cost of N$1 billion.
Another source said: “This is a good opportunity for pension funds in Zimbabwe to invest in the region and open new investment pathways into the bigger regional market”.
Kleine Kuppe and its environs is currently the fastest growth node in Windhoek.
Conveniently, the mall has easy access from almost all suburbs in Namibia’s capital as well as to both international airports.
The primary focus of the mall is on retail and entertainment. It has all the big retail shops found in South Africa and elsewhere in the region. A number of contemporary restaurants with outside seating under the African sky, provide spectacular views of Windhoek.
Bard, which has arrived in the market with a bang, says it is there to help Zimbabweans unlock value in their assets most of them constituting dead capital outside the country and access new lines of credit.
The dead capital is mainly tied up in immovable properties like houses and buildings which Zimbabweans own outside the country but are not leveraging to raise capital to invest there and back home.
The new lines of credit the advisory firm has arranged are in the form of offshore transaction-based funding which does not need individuals or companies to be clients of financial institutions providing the money. Bard will arrange transaction-based deals and associated funding.
It says securitising internationally-held assets is critical as it would allow capital-seeking individuals and corporates to borrow offshore in markets where the macro-economic fundamentals, especially interest rates, are stable and repayment terms favourable.
The company says it will capitalise on Zimbabwe’s diaspora policy and cabinet’s resolution last week to energetically mobilise offshore investment capital and pursue different models of utilising the huge pool of funds Zimbabweans outside the country are sitting on.
Zimbabwe’s diaspora remittances jumped from about US$$1 billion in 2020 to US$1,4 billion last year as the country reached a record high foreign currency inflow of US$9,7 billion.
Bard says the diaspora market and remittances are huge and need to be leveraged. Last year remittances reached US$1,4 billion, up from US$1 billion.
The Reserve Bank of Zimbabwe indicated that for the first time in over 10 years, our foreign currency earnings totalled US$9,7 billion in 2021, up from US$6,3 billion in 2020.
This means there has been a 53 percent increase in our foreign currency inflows. Out of the US$9,7 billion, US$6,2 billion came from exports; US$1,4 billion from remittances.
This means our foreign currency inflows are around US$10 billion.