Patrice Motsepe’s foray into property sector

Mining tycoon Patrice Motsepe’s African Rainbow Capital considers residential sector following the decision to acquire 20% stake in Val de Vie Investments as its first foray into property.

Billionaire and mining tycoon Patrice Motsepe’s African Rainbow Capital considers residential sector following the group's decision to acquire 20% stake in Val de Vie Investments as its first foray into property.

The businessman launched African Rainbow Capital (ARC) in April, an investment company focused on financial services and private equity.

The company, jointly headed by former Sanlam CEO Johan van Zyl and Sanlam Investments CEO Johan van der Merwe, has already made investments in insurance broker Indwe Broker Holdings and backed JSE-listed special purpose acquisition company Capital Appreciation.

Also read: AUCTION — Corporate disposal to hit the auction block

ARC is an unlisted company and a subsidiary of Sanlam’s empowerment partner‚ Ubuntu-Botho Investments. Van Zyl and Van der Merwe have both signed on to be co-CEOs for a 10-year period. ARC has been given about R10bn to invest in various sectors. Of this‚ about R1.5bn will be earmarked initially for property investments.

Val de Vie Investments owns Val de Vie Estate located in the Paarl-Franschhoek Valley Western Cape. The estate comprises the newly acquired Pearl Valley Golf and Country Estate with developer stock valued at more than R1 billion sold in the past 18 months.

“This 20% deal is our first property play. We see it as a strong opportunity to gain exposure to a very well-run company. We really like the management team at Val de Vie Investments‚” Van der Merwe said.

Val de Vie has become the country’s largest lifestyle estate, covering a total of 990 hectares.

Van der Merwe did not disclose the exact value of the 20% stake‚ but said it was worth R100m-R200m.

The investment company was planning to make another real estate acquisition in the near future that would be worth between R500m and R1bn.

“We want to have an exposure of about R1.5bn to property assets by the end of this year‚” Van der Merwe said.

“This deal will support future developments on and around the estate‚ such as the construction of a bridge over the Berg River that will connect with the R45 provincial road.”

Motsepe‚ who is the chairman of ARC‚ said Val de Vie was an exciting investment. “We see immense value in Val de Vie‚ and are pleased to be involved with this world-class development and its visionary team.”

Many investment companies are buying interests in listed property funds‚ or investing in real estate directly for the first time‚ as they look to gain exposure to the burgeoning sector.