PIC seeks SA retailers partnership for Africa growth

"We are looking at going into partnerships with South African companies going into the continent. We are looking for operators in the consumer retail space who have a good presence on the continent," PIC CEO Elias Masilela said.

The Public Investment Corporation (PIC) said yesterday it was exploring investment partnerships with South African retailers looking at broadening their footprint in Africa, a sign that it was serious about delivering on its mandate to invest close to R5bn on the continent.

"We are looking at going into partnerships with South African companies going into the continent. We are looking for operators in the consumer retail space who have a good presence on the continent," PIC CEO Elias Masilela said.

"We are in discussions with some retailers. The retailers often don’t want to own properties. They would like to have a provider of the infrastructure for their business."

Asked why the PIC was exploring partnerships with retailers looking at expanding in Africa, Mr Masilela said: "It’s purely investor certainty. If you start up with a big enough client as your anchor tenant, you have already guaranteed income streams from day one. We don’t want to develop the property and then struggle to get tenants. That would just be a waste."

Mr Masilela did not want to disclose yet how much the PIC was looking at spending on developing property, nor which retailers it would start investing with.

SA’s retailers have often complained about the challenge of obtaining land and getting areas rezoned for businesses in Africa.

Mr Masilela said the role of the PIC was to promote "SA Inc" in investing across the world.

Maqhawe Dlamini, GM of listed equities at the PIC, said the corporation’s investment plan in Africa was partly aimed at enhancing infrastructure development by building structures such as malls to take advantage of the rapid urbanisation that would drive consumption. It also has the appetite to invest in Africa’s vast resource wealth.

The plan is also to encourage small and medium-size enterprise funding and help in the extension of growth loans to sectors ignored in the past due to perceived risks.

The plan by the PIC to invest in Africa comes after it received the go-ahead to invest 5% of its assets under management in Africa. The PIC, which invests on behalf of the Government Employees Pension Fund, has just over R1-trillion of assets under management.

It recently announced that it was investing $250m for a 19,58% stake in Togo-based pan-African bank Ecobank. Ecobank has a presence in 32 African countries and also has a partnership with Nedbank .

Asked why the PIC had opted for Ecobank instead of investing directly in a South African bank that had ambitions to expand on the continent, Mr Masilela said: "We already have exposures to local banks. So increasing our exposure was not going to give us what we want. What we wanted was to buy into a vehicle that is going to give us the widest footprint on the continent with one bank, and Ecobank is that vehicle.

"Ecobank already understands the African markets as it is set up as a pan-African bank," he said.

According to the PIC, as of April 13 it owned 13,2% of Standard Bank , 8,4% of Absa , 11,5% of FirstRand and 8,8% of Nedbank.