Wendel takes first steps in African commercial real estate

The investment company on Tuesday announced its first African real estate investment: the acquisition of a 40% stake in pan-African property company SGI Africa.

SGI Africa was created in 2015 by the French CFAO corporation, to support the African expansion plan of mass market retailer Carrefour. SGI Africa develops and manages shopping malls, notably through its PlaYce brand.

By the terms of the agreement, CFAO will still maintain 40% of SGI Africa's capital, while Wendel acquires a 40% interest in the latter, and FFC (a partnership between CDC International Capital and the Qatar Investment Authority) a 20% one.

The property company opened its first PlaYce shopping mall at the end of 2015 in the Ivory Coast, and plans to build and operate about twenty shopping malls in eight western and central Africa countries within the next five to seven years.

"These projects will require a global investment in the region of €500 million," to be financed by the shareholders and through borrowing, as separately stated by both CFAO and Wendel in their press releases.

The partners will gradually invest in SGI Africa up to €300 million out of their own pockets, in the course of the next few years. The first round of financing, worth €60 million, should be finalised in the forthcoming weeks.

Wendel will gradually invest up to €120 million in SGI Africa in the course of the next few years. This is the company's "third direct investment in Africa," part of the more than €800 million it has invested in African companies since 2013.