From 0 to R10 billion in 6 years – How Delta did it…  and is doing it now in Africa

From 0 to R10 billion in 6 years – How Delta did it… and is doing it now in Africa

Six years ago, Bronwyn Anne Corbett joined Motseng Investment Holdings, a property management, facilities management and industrial investment firm founded in 1998, as Chief Financial Officer. During her tenure, she co-founded Tuffsan 89 Investment Holdings (“Tuffsan”) to establish and grow the company’s portfolio of mostly government-tenanted assets. In just over 12 months, Corbett and her team grew the portfolio to over R1 billion. Owing to major challenges with funding of government-tenanted assets, they decided to list the portfolio on the JSE. After six months of roadshows and educating investors on the perceived risks associated with government tenants, the portfolio listed on 2 November 2012 as Delta Property Fund Limited with 20 assets valued at R2.1 billion in an over-subscribed offer. Today, just three years later, the fund has property assets valued at almost R10 billion.

This staggering growth has extended beyond the borders of the country into the African continent, through Delta Africa Property Fund – the only listed company on the JSE to offer investors direct exposure to property investment on the continent outside of South Africa. Subject to shareholder approval, Delta Africa will be renamed Mara Delta, following a recently announced unique strategic relationship with The Pivotal Fund Limited (“Pivotal”), which will see the enlarged company increasing its assets under management from a current $200 million to approximately $500 million.

Where it began
Born and raised in KwaZulu-Natal, Corbett is married to Murray Corbett and mom to two beautiful children. Qualified with a B.Com Honours degree from the University of Natal and articled at BDO, the fifth largest accountancy network in the world, Corbett qualified as a Chartered Accountant. She was appointed as a financial manager at Universal Property Professionals in 2005. It was during this time that Corbett worked on an intensive audit spanning 20 years of operation of a property developer, providing her with an intimate knowledge of the commercial property sector business. Her role was subsequently extended to include asset and development management, which further sparked a passion for the operational side of the business, backed up by a solid financial background.
After joining Motseng Investment Holdings, Corbett could apply her in-depth knowledge of the property sector with her experience in optimal funding strategies and her deal-making abilities.

Corbett fondly recounts the very first property acquisition of the fund back in 2009. “We acquired our ‘Grand Old Lady’, which Delta still owns today, six years ago for R175 million from Growthpoint and renovated her. The Forum building in Pretoria became the head office of the Department of Transport, securing a long-term lease. The property is currently valued at R400 million,” she says.

From there the Fund grew to its current 85 properties valued in excess of R106 million each, employing 70 staff across the country, with Corbett currently serving as Delta’s Chief Operating Officer and Chief Investment Officer. The Fund is expected to maintain its market-beating distributions on the back of its investment approach: manage and buy single-tenanted commercial assets in key strategic nodes attractive to government and other blue chip companies; and mitigate leasing risk through long-term leases by leveraging its empowerment credentials and proven track record of upgrading strategic assets to A- and B-grade status.

Into Africa
While remaining a JSE-listed landlord of reference for government and other empowerment-driven tenants, Delta will maintain a significant interest in Delta Africa (to be renamed Mara Delta Property Holdings Limited subject to shareholder approval) to benefit from exposure to the high growth opportunities on the African continent.
Delta Africa is a pan-African property income fund focusing on African (excluding South Africa) real estate assets, underpinned by US Dollar denominated long-term leases with high quality tenants, delivering strong sustainable income.

The Fund listed on the Stock Exchange of Mauritius (“SEM”) and migrated to the JSE main board on 30 March 2015 and 10 July 2015 respectively. It is the first multi-listed property fund to offer international property investors direct access to immediate high growth opportunities on the African continent outside of South Africa. This has attracted a diverse shareholder base, including the likes of Africa’s largest pension fund, the Public Investment Corporation (PIC), who currently holds 25.87% of the company.

“During our first year, we successfully bolstered our asset base in Mozambique, migrated to the JSE main board and concluded, among others, the acquisition of Anfa Place retail centre in Casablanca, Morocco,” said Corbett, who is the CEO of Delta Africa.
On 16 November 2015, Delta Africa and Pivotal, a JSE listed development focused investment fund, announced the forming of a new strategic relationship that will create a property powerhouse on the African continent. The conclusion of the strategic framework agreement is subject to the confirmation of due diligences and Delta Africa shareholder approval. Once concluded, Pivotal will be a substantial shareholder with board representation in Mara Delta. “Mara Delta will be uniquely positioned with economies of scale to consolidate a number of opportunities on the continent,” commented Corbett.

Highlights
The over-subscribed listing of Delta Limited on the JSE was a significant highlight, given the Fund’s sovereign focus, says Corbett. “But our expansion into Africa has certainly been a watershed move, given the many challenges involved in investing in property in a foreign country with very different customs, laws and regulations. The sheer complexity of the acquisition of the mall in Cassablanca, for example, is proof of the persistence and resilience required to invest in African real estate. However, Delta Africa is pioneering direct property investment into Africa’s high-growth economies and bringing the opportunities these markets offer to South African investors.”

She notes that South African investors are increasingly seeking consistent high yielding, dollar-based returns and exposure to the burgeoning real estate market on the continent. In addition to the rand hedge, which is crucial to local investors given the value of the local currency, investors also pay a lower marginal tax rate on foreign dividends.
While the power of focused property investment to generate wealth is clear from the results achieved by Delta and Delta Africa, the work is not always glamorous: investors need an unflinching long-term commitment and solid support from financiers and shareholders, while upholding the highest standards of governance and being flexible enough to make fast decisions.

“I have found that the key is maintaining razor-sharp focus, resilience and a strong support structure, knowing that there will be challenges that must be overcome each step of the way,” says Corbett. “However, I remain driven by a passion for property itself, for the property investment business and for the people in the business. The property business shows what can be accomplished by a determined team in a short time and the recognition of the industry is inspiring. The property industry offers so many opportunities. Many of our staff started at entry-level positions and now hold senior positions. Delta has also been able to establish a bursary fund for women who want to enter the property industry. As such, the fund has become more than just a property fund, it has become a platform to leverage other important objectives.”

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