African Rainbow Capital launches real estate joint venture

15 March 2016

The strategic blueprint that was laid out at the launch of African Rainbow Capital (ARC) last year is starting to to be realised with the launch of the ARC Real Estate joint venture that was unveiled by ARC chairman Patrice Motsepe on Tuesday.

The initiative is a joint venture between African Rainbow Capital (which will be the majority shareholder) and the Buffet KLT consortium, led by Jonathan Beare (from Buffet) and Bradley Kark (KLT) respectively.

“Our rationale for the joint venture with Buffet KLT is its track record and partnership investment ethos. Jonathan Beare is one of the significant shareholders of Buffet KLT and together with its partners the consortium represents a substantial privately-held property and private equity investor in South Africa,” said Motsepe.

The venture has appointed Mark Fox and Kentt Ellis to lead the team, and the venture has already closed its first investment with the purchase of the Setso Property Fund which was purchased in December 2015. Speaking specifically to the current economic cycle in which corporates may consider monetising their property portfolios, Fox said, “ARC Real Estate offers an alternative offtake by which corporates can consider the sale of the [property] asset to a black-owned fund, and not only benefit from the capital realisation but also from the ownership and/or procurement recognition in terms of their BBBEE scorecard.”

Besides providing the venture with valuable empowerment credentials and a sizable balance sheet with which to operate, Motsepe sees empowerment as fundamental to creating an inclusive economy. “This partnership reflects what we think the best businesses in the world look like and we hope to demonstrate why we think we are better. Empowerment to me was always about bringing sectors of the population that could not participate in the mainstream economy to become partners in a world-class business,” said Motsepe.

Listen to the investment strategy and opportunities ARC Real Estate hopes to grasp via the interview with Bradley Kark, CEO of KLT.

The venture will, for now, focus on the South African market, says co-CEO of ARC, Johan van der Merwe. “It is where our knowledge base resides. We know the market and have the networks, and in a partner like Buffet KLT, we have people that eat, drink, and sleep property.”