NOVARE EQUITY PARTNERS

[ BUSINESS FOCUS_NOVARE EQUITY PARTNERS ] Location, Location, Location The Novare Gateway mall in Abuja is a huge construction project. As we hear from the developer, the key to success is finding the right location to build. Head of Property Development at Novare Jan van Zyl NOVARE EQUITY PARTNERS IS A PRIVATE EQUITY FUND MANAGER WITH A MANDATE TO INVEST IN RETAIL AND COMMERCIAL REAL ESTATE IN SUB-SAHARAN AFRICA, EXCLUDING SOUTH AFRICA. HAVING CLOSED THEIR FIRST PROPERTY FUND IN 2010 WITH $81 MILLION, THE COMPANY IS MAKING WAVES IN PROPERTY DEVELOPMENT. NOVARE EQUITY PARTNERS FIRST FUND FINANCED THE CONSTRUCTION OF THE NOVARE APO MALL IN ABUJA, THE ACQUISITION OF LAND IN LAGOS FOR THE NOVARE LEKKI MALL AS WELL AS TWO PROPERTIES IN ABUJA FOR THE NOVARE GATEWAY MALL AND NOVARE CENTRAL OFFICE PARK. NOVARE LEKKI IS SCHEDULED TO OPEN ON 28 JULY 2016, WHILE NOVARE GATEWAY AND NOVARE CENTRAL ARE SCHEDULED TO OPEN IN THE THIRD AND FOURTH QUARTERS OF 2017 RESPECTIVELY. Property investments are ideal vehicles for pension funds that need sustainable long-term returns. It was with that need in mind that Novare Equity Partners created the funds, explains Jan van Zyl, Novare Equity Partners head of property development in Nigeria. In 2014, Novare Equity Partners began fund raising for its second fund which is on schedule to close with about $380 million at end June 2016. Due to the availability of funding, Novare Equity Partners has P94 I BUSINESS FOCUS I ISSUE 52 I www.businessfocusmagazine.com External Representation, Novare Gateway Mall

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been able to work on three projects simultaneously; Novare Lekki, Novare Gateway, as well as Novare Central. With regard to Novare Gateway, van Zyl comments: We looked at future growth and identified an area along the airport express road as a critical growth part of the city. We began engaging with land owners, and we were able to sign a long-term lease agreement to acquire seven hectares of land with the Abuja Chamber of Commerce. Novare Equity Partner s developments require the support of anchor tenants who quickly demonstrated their willingness to be part of the development opportunity by signing longterm lease agreements. So we ve secured our anchor tenants and are now working on the rest of the tenants. The location for Novare Gateway was structure. chosen for a number of reasons. As van Zyl explains, We are primarily driven by the needs of tenants so focus on locations we believe should have shopping centres based on the growth potential of the area, as well as the spending power of its residents. BUILDING BLOCKS The Novare Gateway mall is an ambitious project worth $68 million for the first phase alone. Construction has already begun on this huge shopping mall in Nigeria s capital city. Expected to open during the third quarter of 2017, the finished mall will be 25,000 square metres in size, with the initial development stage taking up a whopping 15,278 square metres. But even before the first spade broke ground, Novare had a number of challenges to overcome to bring the Novare Gateway mall to fruition. One of the challenges is finding the right piece of land with the right ownership structure to buy, van Zyl explains. As the representatives of a property development fund, we are in the market to develop, operate, and ultimately sell these real estate assets, so are constantly on the The challenge is finding the right piece of land with the right ownership look-out for good land deals. Often there are zoning or documentation issues, amongst others.. PEOPLE ON THE GROUND The challenges, however, don t end with the acquisition of land with a sound title and ownership structure. Van Zyl explains: Once you move into the construction phase any ambiguity about what is required by regulations needs to be clarified before work starts. Then there s financing, which has a major influence on the total development cost. Finding skilled artisans and craftsmen to deliver a quality product at the end of the day can also be a challenge given the size of our projects. Therefore, it is essential to find a reputable contractor who is willing to engage with you during the entire construction process. These aren t challenges that van Zyl believes can be dealt with through a Skype call or an email. Instead, the head of property development relies on a hands-on approach, We believe in having people on the ground. I ve been here since 2010. We have an office in Lagos and a presence in Abuja. We have a large employment base here, with people in the country. This means we re not relying on third parties to give us second hand information. We re out there exploring the cities, talking to land owners. We have a real presence. That s the most important aspect. In the construction phase, we have project managers looking over contractors shoulders. It s good having someone who can identify small problems and stop them before they escalate into major issues on site. Because of our hands-on approach, we re able to achieve economies of scale and competitive prices from suppliers with whom we engage on a number of projects. Interior View, Novare Gateway Mall www.businessfocusmagazine.com I ISSUE 52 I BUSINESS FOCUS I P97

[ BUSINESS FOCUS_NOVARE EQUITY PARTNERS ] When it comes to employing the people needed to put projects of this magnitude together, Novare Equity Partners tends to recruit directly rather than through an agency to ensure that the people it hires will be a good fit with the company s requirements and culture. So what happens after Novare Gateway? Where is Novare Equity Partners going next? We re looking to build on our track record of consistent growth, van Zyl says. The funds we have raised will be invested in retail and commercial property developments in sub-saharan Africa, excluding South Africa, where growing populations and increasingly affluent consumers are significantly under-serviced in terms of modern shopping and office facilities. Construction in full force P98 I BUSINESS FOCUS I ISSUE 52 I www.businessfocusmagazine.com

[ NOVARE EQUITY PARTNERS ] Restaurant Representation, Novare Gateway Mall www.businessfocusmagazine.com I ISSUE 52 I BUSINESS FOCUS I P99