Johannesburg - Mara Delta Property Fund announced on Friday that it planned to invest €50 million (R762m) in Beachcomber Hospitality Investments Limited (BIHL) in a sale and leaseback deal in Mauritius. Its share price rose 2.72 percent to close at R18.49 on the JSE on Friday.
However, Mara Delta said the initial investment consisted of an equity portion of €12.50m for 44.42 percent of BIHL. Mara Delta will partner with New Mauritius Hotels Limited (NMH), which holds the other 55.68 percent in BIHL.
Co-investing
The Stock Exchange Mauritius listed NMH is co-investing and underwriting the loan to BIHL.
NMH will transfer the three assets to BIHL, before leasing them back with the option to renew the initial 15-year lease for three successive periods of 10 years each.
As tenant, NMH will also be responsible for the full repair, maintenance and insurance of the properties.
The assets that will be transferred to BIHL are:
Le Victoria hotel, a resort with 254 rooms, comprising a total gross lettable area of 37 294 square metres and a weighted average gross rental per square metre of $11.23 (R161.65) per month; Le Canonnier, a leisure resort and spa comprising 284 rooms and a gross lettable area of 25 248m² with a weighted average gross rental per square metre of $13.16 per month and Le Mauricia Grand Baie, a four-star resort in the heart of Grand Baie with 238 rooms and a gross lettable area of 23 266m² with a weighted average gross rental per square metre of $13.64 per month.
The three properties will give Mara Delta a 24 percent exposure in the Mauritius market.
Chief executive Bronwyn Corbett said: “The first tranche of our investment totals €31.5m. Mara Delta will acquire a 44.42 percent stake in BHIL for an investment of €12.50m and the balance will be advanced by means of a shareholder loan.
“Mara Delta also has an option - at our sole discretion - to invest a further €18.5m through a shareholder loan in future. The transaction is yield accretive and provides us with European consumer price index-linked hard currency exposure over an initial 15-year term without us assuming any operational or hospitality risk,”Corbett said.
Profits soared
Last week the group reported that for the three months to end September its profits soared 139.78 percent to $4.34m, up from $1.81m reported in the same quarter in 2015.
“The group’s strategy remains to expand its property portfolio throughout targeted countries in Africa, with assets that will provide sustainable long-term, hard currency-based income from high quality counter parties with a core focus on enhancing shareholder value and dividend yield,” the group said.
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