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Quintin Primo’s next real estate frontier: Africa

Africa may be too risky for many real estate investors, but Quintin Primo thinks the potential rewards are worth the risk.

After restructuring Capri Capital Partners, the Chicago-based real estate company he co-founded 23 years ago, Primo has high hopes for the continent, believing an expanding population and strong economic growth will deliver good opportunities for one of his businesses, Capri Africa.

And he is convinced that now is the time because African currencies are weak and the price of oil and other commodities produced there are low, holding down real estate prices and other key costs. The African unit is about to make its first investments there, in three retail developments in Ghana and Keyna and an office project in Nigeria, Primo said.

“We believe this is an ideal time, almost a countercyclical time, to enter Africa,” he said.

NEW UMBRELLA COMPANY

Africa is a key piece of Primo’s growth strategy for Capri Investment Group, a brand-new umbrella company that oversees five units. He has high ambitions for the company, with a goal of doubling its assets under management, currently about $3.7 billion, in 12 to 18 months.

As chairman and CEO of Capri Investment, Primo oversees businesses that invest in U.S. apartments and retail, single-tenant net-lease properties and in overseas real estate markets, often with capital raised from pension funds and other large institutional investors. Breaking out the businesses into five separate units made sense operationally and from a marketing standpoint, he said.

“I felt it was time to just take a step back and make sure the market clearly understood what we were doing and why,” Primo said. “I wanted to make sure we had all the infrastructure in place to scale the business rapidly.”

Primo has high expectations for Capri Africa, one of the five units, which is headed by his longtime colleague Paul Edwards. The business is in the process of raising a $250 million to $300 million investment fund, Primo said. He sees the biggest opportunities in Ghana and Kenya, where Capri has opened offices, but said the business also will hunt for deals in Nigeria, Uganda, Tanzania and Angola.

Capri Africa will focus on development in the office, retail and housing sector, aiming to capitalize on the growth of the middle class, he said.

THINKS CONTRARIAN BET WILL WORK

Africa is well beyond where most international real estate investors will go—an emerging market that many believe is far from emerging. Sam Zell’s overseas real estate investment firm, Chicago-based Equity International, has scouted opportunities in sub-Saharan Africa but hasn’t made an investment there.

Yet Primo thinks his contrarian bet will pay off, explaining how Capri went into India in 2008, when the country’s economy was in shambles, and most investors avoided it “like the plague.” Yet the country has turned around and Capri’s investments have delivered, he said.

“It really truly is opportunistic investing,” he said. In Africa, “we think that the intermediate-term and long-term growth prospects are outstanding.”


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