Africa Commercial Real Estate Credit Opportunities Fund™ (ACRECO) is a specialist commercial real estate (CRE) credit strategy focused on short- to medium‑term, income‑backed credit exposures across select African gateway cities.
Sponsored and managed by N3 CAPITAL AFRICA, Africa’s Integrated Real Estate & Infrastructure Capital Platform™, ACRECO is designed to provide institutional, core‑plus and opportunistic investors with a disciplined, downside‑protected entry point into Africa’s emerging CRE credit markets. Explore how ACRECO’s “Short‑Duration, Income‑Backed CRE Credit” strategy channels capital into income‑producing commercial real estate across Africa’s gateway citieswith a focus on disciplined underwriting, resilient tenants and robust cash‑flow visibility.
Discover the ACRECO Proposition
The investment objective of ACRECO is to generate attractive, risk‑adjusted
returns through a diversified portfolio of short‑ to medium‑term CRE credit
exposures backed by income‑producing commercial real estate in leading
African gateway and corridor cities. The Fund prioritises capital
preservation, cash yield and disciplined downside protection, while seeking
to capture additional upside from properly structured fees, equity kickers
and capital recycling over the life of the vehicle.
Indicatively, ACRECO will focus on senior secured loans, mezzanine facilities, bridge
finance and preferred equity positions with tenors of up to approximately 12–36 months
per position, denominated in (or effectively linked to) US dollars or other hard currency.
Fund‑level capital is expected to be recycled through multiple credit cycles over the fund
term, compounding returns while maintaining a conservative risk profile. Final economic
terms, including target IRR, fee structure and distribution policy, will be set out in the
Fund’s Private Placement Memorandum and related subscription documentation.
Target Investors & Use Cases
ACRECO is designed for qualified institutional and professional investors seeking
defensive, income‑oriented exposure to African commercial real estate, including:
• Development finance institutions (DFIs) and multilateral agencies looking to support
real‑asset formalisation via bankable, well‑structured private credit vehicles.
• Pension funds, insurance companies and sovereign or quasi‑sovereign institutions
seeking hard‑currency, income‑backed strategies with robust governance.
• Real estate private equity and credit funds, infrastructure funds and multi‑asset
managers seeking specialist regional exposure alongside an on‑the‑ground sponsor.
• Family offices, HNWIs and African diaspora investors looking for institutional‑grade
access to Africa’s CRE credit opportunity set without building internal origination
and monitoring platforms.
The Fund provides investors with access to a curated pipeline of CRE credit transactions
sourced through N3 CAPITAL AFRICA’s platform, under institutional governance,
documentation and reporting standards calibrated for investment‑committee and
board‑level scrutiny.
Aligning with ACRECO channels your capital into “Institutional‑Grade CRE Credit Exposures”
in African gateway cities where formal commercial stock remains structurally undersupplied.
Our focus on well‑located assets and strong sponsors seeks to support “stable rents, values and
repayment capacity” through the cycle.
Structural CRE Credit Gap in African Gateway Cities
Across African gateway cities such as Lagos, Johannesburg, Accra, Nairobi,
Abidjan, Dar es Salaam, Kigali and Addis Ababa, the demand for
institutional‑quality commercial real estate has outpaced the evolution of the
domestic credit ecosystem. Sponsors with strong projects and tenant demand
often face a persistent mismatch between their funding needs and the
products available from local banks and traditional lenders.
Typical constraints include short tenors, inflexible amortisation profiles, single‑obligor
and sector limits, regulatory capital constraints and an aversion to perceived development
risk. As a result, many high‑quality, income‑backed CRE opportunities remain
undercapitalised or rely on expensive, short‑term facilities that do not match project
cash‑flow profiles. ACRECO is positioned to operate in this structural gap, providing
tailored, risk‑adjusted credit solutions that are anchored in real‑asset fundamentals.
Access an Institutional Opportunity with Right-Sized Tickets
By partnering with ACRECO, you gain access to a CRE credit segment where “Global
Institutions are Already Active”—yet our vehicle enables qualified private investors, family
offices and PE platforms to participate with “institutionally structured exposure without writing
institutional‑sized cheques”.
Africa is the world’s fastest‑urbanising region, with city populations and consumption
spending expected to grow strongly over the next two decades. Urbanisation, the
expansion of formal retail and services, growth in logistics and industrial corridors, and
the deepening of regional and global trade flows are all driving demand for modern offices,
mixed‑use assets, logistics parks, healthcare and education assets, hospitality and specialised real estate.
Simultaneously, regulatory reform and the expansion of local capital markets are
encouraging improved transparency, better corporate governance and a gradual shift from
informal, relationship‑based lending toward more standardised, covenant‑driven
structures. This creates a window for specialised CRE credit strategies such as ACRECO
to step in with institutional underwriting discipline, structuring and monitoring.
For many investors, direct exposure to African commercial real estate through equity
investments or direct lending can be administratively complex, operationally intensive
and geographically concentrated. A dedicated, manager‑led fund structure offers:
• Diversification across sponsors, asset classes, cities and instruments.
• Institutional‑grade origination, due diligence, structuring and legal documentation.
• Active monitoring, covenant enforcement and workout capabilities over the life of
each transaction.
• Efficient access to a pipeline of opportunities sourced and screened through N3
CAPITAL AFRICA’s integrated platform.
The combination of structural CRE credit gaps, formalisation trends, and a rising pool of
institutional capital seeking defensive, hard‑currency strategies underpins the strategic
rationale for ACRECO.
Capture Africa’s Urbanisation Megatrend
By investing through ACRECO, you gain exposure to the “Demographic and Urbanisation
Megatrend” reshaping African commercial real estate. The Fund targets credit opportunities
backed by essential use assets—offices, logistics, retail and mixed‑use properties—that serve
daily economic activity and benefit from “long‑term demand that cannot be digitised or
offshored.”
Core Strategy
ACRECO will focus on short‑ to medium‑term, income‑backed CRE credit
exposures where the primary source of repayment is contractual cash flow
from stabilised or near‑stabilised assets. Typical use cases include
refinancing of existing assets, bridge‑to‑refinance or bridge‑to‑sale
structures, last‑mile completion capital for projects near practical
completion, recapitalisation of sponsor balance sheets, and special
situations where high‑quality assets are temporarily capital constrained.
Target Instruments
Indicative instruments include:
• Senior secured loans backed by income‑producing CRE assets and assignment of
lease or rental cash flows.
• Mezzanine loans and second‑ranking facilities with appropriate pricing, covenants
and inter‑creditor protections.
• Bridge finance to facilitate acquisition, refinancing or repositioning of commercial
assets.
• Preferred equity or other structured equity‑like instruments where security packages
and covenants provide downside protection.
Across all instruments, the Fund seeks clearly defined collateral, conservative attachment
points and strong documentation, with security packages that may include first‑ranking
charges over property‑owning SPVs, share pledges, escrowed receivables and appropriate
guarantees, subject to local legal frameworks.
ACRECO will target income‑backed commercial and mixed‑use assets across a range of
sectors, including:
• Prime and Grade‑A offices in core CBD or decentralised business nodes.
• Urban logistics, light‑industrial and business park assets serving key trade corridors.
• Necessity‑based retail and mixed‑use assets with strong anchor tenants.
• Hospitality, healthcare, educational and specialist real estate where operating partners
are strong and cash flows are visible.The Fund will avoid speculative land positions,
early‑stage greenfield developments without clear pre‑leasing or pre‑sales visibility,
and situations where execution risk or regulatory risk is not adequately mitigated.
Add Real-Economy Diversification to Your Portfolio
Allocating to ACRECO introduces **true real‑economy diversification** into portfolios
concentrated in public markets, single geographies or purely equity risk. Short‑duration CRE
credit aims to balance cyclical exposures with **steady, asset‑backed income** linked to
essential commercial activity across Africa.
ACRECO will prioritise gateway and corridor cities that combine meaningful CRE depth,
established institutional sponsors and demonstrable tenant demand. Indicative target
markets include Nigeria (Lagos, Abuja), South Africa (Johannesburg, Cape Town,
Durban), Kenya (Nairobi), Ghana (Accra), Côte d’Ivoire (Abidjan), Tanzania (Dar es
Salaam), Rwanda (Kigali), Ethiopia (Addis Ababa) and selected North African markets,
subject to ongoing country risk assessment and regulatory considerations.
Portfolio exposure limits by country, city and sponsor group will be defined in the Fund
documentation to ensure prudent diversification.
Portfolio Construction Parameters
Key portfolio construction principles are expected to include:
• Maximum exposure per single asset or borrower group (e.g. not more than a set
percentage of committed capital).
• Maximum exposure per country or city to avoid over‑concentration in any one
market.
• Target ranges for instrument type (senior vs subordinated) and sector mix to manage
overall risk.
• Minimum coverage tests based on conservative valuations and cash‑flow projections
(e.g. minimum asset cover and cash‑flow cover ratios).
• Explicit ESG and governance screens aligned with N3 CAPITAL AFRICA’s
real‑assets platform.
Invest Behind Strong Covenants and Barriers to Entry
Aligning with ACRECO places your capital behind a “Robust Covenant Stack” of vetted
sponsors, institutional‑grade tenants and bankable security packages. We seek transactions with
meaningful “technical, regulatory and financial barriers to entry”, reducing the risk of
undisciplined competition and protecting value for lenders and investors.
Legal & Fund Structure
ACRECO is a closed‑ended, limited‑partnership‑style investment vehicle with a finite
term and defined investment and harvesting periods. The exact domicile, legal form and
regulatory framework will be confirmed in consultation with investors and advisers,
taking into account tax efficiency, regulatory clarity and ease of capital flows for both
African and international LPs.
The Fund will typically comprise Limited Partners (LPs) providing the majority of
capital; a General Partner (GP) or equivalent sponsor entity led by N3 CAPITAL
AFRICA; and one or more investment management entities responsible for origination,
underwriting, portfolio management and reporting. Where appropriate, co‑investment
vehicles may be established alongside the Fund for larger transactions or anchor
investors.
Alignment of Interest
Alignment between N3 CAPITAL AFRICA and investors is central to the ACRECO
architecture. Key features (to be confirmed in the PPM) are expected to include:
• A meaningful GP / sponsor commitment invested on the same economic terms as LP
capital.
• A fee and performance‑participation structure that rewards the Manager only after
investors have received a defined preferred return and the return of contributed
capital.
• Clear policies governing related‑party transactions, conflicts of interest and any
secondary transfers or restructurings.
Back Sticky Tenants and Long-Term Occupancy
Investing through ACRECO means lending against properties whose tenants are “Financially
and Operationally Committed to Staying in Place”—anchored by long leases, strategic locations
and high relocation costs. That “stickiness” underpins “visibility of rental cashflows and interest
coverage” over the life of our loans.
Investment Guidelines & Security Framework
Investment Guidelines
The Fund will apply disciplined investment guidelines, expected to include:
• Minimum security and coverage thresholds for all credit positions (e.g. minimum
loan‑to‑value and debt service coverage metrics).
• Clear eligibility criteria for sponsors, including track record, governance standards,
financial strength and alignment.
• Focus on late‑stage, income‑backed or near‑stabilised assets with visible take‑out or
refinancing options.
• Transaction‑level ESG and compliance screening, including environmental, social
and governance risk factors relevant to the asset and jurisdiction.
• Avoidance of speculative land banking, projects with unresolved title or permitting
issues, and situations dependent on aggressive macro or pricing assumptions.
Security packages will be tailored to local legal and regulatory frameworks but are
expected to include one or more of the following:
• First‑ranking charge over property‑owning SPVs, real estate assets and related fixed
and current assets where enforceable.
• Pledge of shares in asset‑owning entities or holding companies.
• Assignment and controlled escrow of rents, leases, receivables and other project cash
flows, including waterfall and lock‑up mechanisms.
• Corporate and/or personal guarantees from creditworthy sponsors where appropriate.
• Step‑in rights, reserved matters and board representation to ensure adequate control
over key decisions.
Covenants will focus on preserving value, maintaining prudent leverage, enforcing
completion and leasing milestones, and ensuring timely information and reporting from
sponsors.
Prioritise Capital Preservation and Income Stability
ACRECO is designed around “Durability and Downside Protection”. The portfolio focuses on
short‑duration CRE credit exposures supported by long leases, high‑quality tenants and
comprehensive security packages—aiming to deliver “defensive income through cycles” while
preserving principal.
Origination & Screening
ACRECO will leverage N3 CAPITAL AFRICA’s Pan‑African network of
sponsors, banks, DFIs, advisors and intermediaries to source a pipeline of
CRE credit opportunities. Initial screening will test alignment with Fund
mandate, risk/return thresholds, country and sector limits, ESG criteria and
sponsor quality.
Due Diligence & Structuring
Short‑listed transactions will undergo multi‑disciplinary due diligence, including
commercial, technical, legal, financial, tax and ESG workstreams. Independent
third‑party advisors will be engaged as appropriate. A preliminary term sheet and credit
paper will set out the proposed structure, security, covenants, pricing, key risks and
mitigants.
Investment Committee Approval
All investments will require formal approval by the Investment Committee, based on
standardised documentation and risk ratings. The Committee will consider transaction fit,
portfolio impact, risk/return balance, ESG profile and exit routes before granting
approval, and may impose conditions precedent and subsequent as necessary.
Documentation & Disbursement
Following IC approval, transaction teams will coordinate the negotiation and execution of
definitive documentation, perfection of security and establishment of escrow and
reporting arrangements. Disbursements will be made in tranches tied to milestones,
documentation completion and satisfaction of conditions precedent.
Target Inflation-Responsive, Income-Backed Returns
By partnering with ACRECO, you gain access to “Inflation‑Aware Income Streams”,
underpinned by creditworthy tenants and leases that typically incorporate “indexation and
escalation mechanics”. The Fund’s structure is designed to deliver “consistent, income‑driven
returns quarter after quarter”, while preserving capital over the medium term.
Post‑Investment Monitoring & Value Protection
Post‑investment, ACRECO will apply active, data‑driven monitoring, including:
• Regular review of project and sponsor financials, cash flows, leasing and operational
KPIs.
• Site visits, technical reviews and project progress assessments for any assets under
completion or repositioning.
• Ongoing monitoring of covenant compliance, reserve accounts and escrowed cash
flows.
• Periodic valuations and stress‑testing of security and coverage ratios.
Where early warning indicators emerge, the Manager will engage proactively with
sponsors to implement corrective action, restructurings or enhanced controls as required.
Exit Strategies
ACRECO’s credit positions are expected to be repaid or refinanced through one or more
of the following mechanisms:
• Refinancing by local or international banks, DFIs or institutional lenders once assets
are stabilised.
• Asset sales or recapitalisations by sponsors, including potential sale to REITs, core
funds or strategic investors.
• Scheduled amortisation from asset cash flows under contractual repayment schedules.
• Targeted enforcement or consensual workouts in cases of material under‑performance
or default, guided by local legal frameworks.
Lend to High-Occupancy, Mission-Critical Assets
Through ACRECO, your capital is deployed to “Income‑Backed CRE Credit” for assets that
typically operate at strong occupancy levels and serve mission‑critical functions for their tenants.
The objective is to capture “reliable interest and fee income” while minimising downtime and
tenancy risk.
Risk management is embedded throughout the ACRECO lifecycle – from
origination and structuring through to monitoring and exit. The Fund will
employ a comprehensive framework covering the following key risk
categories:
Credit & Counterparty Risk
Mitigated through sponsor screening, conservative underwriting, collateralisation,
covenants, guarantees and control over cash flows. Internal credit scoring and exposure
limits by sponsor group will be applied.
Market & Asset Risk
Mitigated by focusing on income‑producing or near‑stabilised assets in core locations,
using independent valuations and realistic lease and rental assumptions, and avoiding
speculative development risk.
Execution & Completion Risk
For any assets under development or repositioning, risk is mitigated through
milestone‑linked disbursements, robust construction contracts, experienced contractors,
project management oversight and contingency planning.
Liquidity & Exit Risk
Managed via short‑ to medium‑term instrument tenors, staggered maturity profiles,
diversified counterparties, and early identification of take‑out options and potential
buyers or refinanciers.
Legal, Regulatory & Enforcement Risk
Addressed by working with top‑tier local and international counsel, carefully structuring
security and enforcement pathways in each jurisdiction, and continuously monitoring
regulatory developments affecting CRE ownership, lending and capital flows.
FX & Macroeconomic Risk
Where feasible, transactions will be structured in hard currency or with effective hedging
and pass‑through mechanisms. Country and currency exposure limits, macro stress
testing and scenario analysis will form part of ongoing risk assessments.
ESG & Reputational Risk
ACRECO will apply N3 CAPITAL AFRICA’s ESG framework, incorporating exclusion
lists, ESG due diligence, covenants and ongoing monitoring. Investments will be
evaluated for environmental compliance, social impact and governance standards, with
particular attention to labour practices, community impacts, anti‑corruption and
transparency.
Benefit from Structural Shifts in African CRE
Partnering with ACRECO provides exposure to “Structural Shifts in African Commercial Real
Estate”—including the growth of modern logistics, institutional‑grade offices and organised
retail formats. These trends require upgraded, well‑capitalised assets, creating “repeat credit
demand” from sponsors who must modernise to serve evolving tenant needs.
Platform Overview
N3 CAPITAL AFRICA is a Pan‑African integrated real estate and
infrastructure capital platform focused on designing and executing
bankable, covenant‑driven structures across multiple real‑asset verticals –
including logistics, healthcare, data centres, energy, social infrastructure
and corporate real estate. The platform combines investment banking
discipline, real‑estate operating expertise and deep local market networks to
deliver institutional‑grade solutions for both capital providers and asset
sponsors.
Relevance to ACRECO
ACRECO benefits from N3’s broader ecosystem in several ways:
• Shared origination networks across corporates, developers, banks, DFIs and advisors
in key African markets.
• Access to sector‑specialist teams and knowledge across logistics, offices, healthcare
and other CRE adjacencies.
• Centralised governance, risk, legal, structuring and ESG frameworks developed for
Pan‑African real‑assets mandates.
• Ability to identify follow‑on opportunities, platform roll‑ups and potential exits
across N3’s growing real‑assets portfolio.
Team & Governance Culture
The ACRECO team will comprise experienced professionals with backgrounds in real
estate investment, structured finance, credit, development, legal, risk and asset
management. The team will be supported by an independent Advisory Board and
Investment Committee, ensuring that investment decisions and portfolio oversight are
subject to rigorous, multi‑disciplinary scrutiny and challenge.
Invest with Institutional-Grade Exit Optionality
ACRECO is being structured with “Multiple, Mutually Reinforcing Exit Pathways”—including
amortising loan structures, refinancing routes, portfolio‑level take‑outs and potential
securitisation options. Our goal is to ensure investors benefit from “clear, institutionally credible
exit visibility” alongside disciplined portfolio construction.
Investor Proposition
ACRECO offers investors a differentiated, institutional‑grade vehicle to access Africa’s
emerging CRE credit opportunity set, with:
• Short‑duration, income‑backed credit exposures anchored in real assets and
contractual cash flows.
• Robust downside protection through conservative structuring, collateralisation and
active risk management.
• Diversified exposure across countries, sectors, sponsors and instruments within a
single, manager‑led platform.
• Alignment with a Pan‑African, real‑assets‑focused sponsor committed to long‑term
platform development.
• ESG‑aware deployment of capital into real‑economy assets that support urbanisation,
trade and job creation.
Next Steps for Prospective Investors
Prospective investors are encouraged to engage with N3 CAPITAL AFRICA to review
draft documentation, discuss the proposed structure and economics, and explore
alignment with their portfolio objectives, regulatory frameworks and ESG priorities.
Detailed pipeline information, country and sector strategies, and case studies of indicative
transactions can be made available to qualified parties under appropriate confidentiality
arrangements.
Register Your Interest with ACRECO
To register your interest in ACRECO, please contact the Fund team or your “N3 CAPITAL
AFRICA Relationship Manager”. Together, we can translate Africa’s commercial real estate
funding gap into a “disciplined, income‑backed credit opportunity” tailored for professional
investors.
