Vantage Capital, Africa’s largest mezzanine fund manager, announced today that it has provided a debenture facility of NAD 80 million (Namibian Dollar) ZAR 80 million (South African Rand) to United Africa Group, UAG an established hospitality and property-owning group in Namibia.
Funds will be used to support the group’s equity contribution for the construction of a new Hilton Garden Inn, a 181-key three-star hotel to be located in the heart of the Windhoek city centre on Freedom Square, adjacent to UAG’s existing five-star Hilton Windhoek Hotel.
Growing tourism demand in Namibia has been a key driver behind the hotel construction project. Tourists’ arrivals to Namibia have shown consistent growth over the past five years and the trend is expected to continue going forward, with more arrivals projected to double over the next ten years. The Namibian Government has in fact identified tourism as one of the economy’s key growth sectors over the next decade. The new hotel will be equipped with all the amenities expected of a world-class business and leisure hotel including a pool, sundeck, gym and roof garden. The proximity to the existing Hilton Windhoek Hotel will also allow for the sharing of services including conference facilities.
“We are delighted to partner with UAG for our first investment in Namibia and Vantage’s 21st mezzanine transaction overall,” said Warren van der Merwe, chief operating officer of Vantage Capital. “UAG has built up a quality portfolio of hospitality and commercial property assets under the strong leadership of Haddis and Martha Tilahun and we are pleased to provide them with financial backing as they further entrench themselves as a leader in the local hospitality sector.”
David Kornik, associate partner at Vantage Capital, added that “we always look for our funding to facilitate expansion and economic development; in this investment we are therefore proud to be supporting a local business group, in a project that will have a significantly positive impact on tourism growth as well as on the development of Windhoek’s city centre.”
Willem Mouton, chief executive officer of UAG added; “We are pleased to bring Vantage on board as an experienced African investor who shares our views on the exciting prospects for Namibia’s tourism and hospitality sector. We look forward to a mutually rewarding partnership in the coming years.”
The United Africa Group investment is Vantage Capital’s third transaction in Fund III, which is targeting a final close of USD260 million (R4 billion), and has a 60% allocation to countries outside South Africa. After supporting the Servest buyout last year, Vantage’s Fund III recently concluded a USD20 million investment in a Nigerian property group, Landmark. The Fund is expecting to close its fourth transaction during the first half of 2016 for an investment of over USD17m (R250m).
UAG was founded in 1992 by Haddis Tilahun and was later joined by his wife, Dr. Martha Namundjebo-Tilahun. It grew rapidly to become one of the largest property-owning and hospitality groups in Namibia, with ten existing hotels in its portfolio (nine operated by Protea and one by Hilton) as well as commercial real estate in Windhoek covering over 12,000 m2 of office space and in excess of 2,500 m2 of retail space.
Source image: UAG