IFA and Moreland in Major Joint Venture in South Africa

Jassim M. Al-Bahar, the Chairman and Managing Director of Kuwait’s International Financial Advisors (IFA) has announced one of the largest foreign international transactions in South Africa’s tourism industry. The IFA Consortium will invest $100 million over a 10 year period in the Zimbali Resort.

International Financial Advisors (IFA) is listed on the Kuwait Stock Exchange with a capitalisation of US $500 million. IFA heads a consortium with several leading Kuwaiti and international companies, Kuwait Real Estate Company (KREC), International Finance Company (IFC) and United Investments Portugal (UIP), with assets in excess of US $1 billion.

In an initial investment of $10m, IFA has acquired a 50% equity stake in the renowned Zimbali Coastal Resort in the KwaZulu-Natal region, north of Durban. The joint venture that was formed - Moreland / IFA Resort Developments - is with Moreland Developments, one of South Africa’s leading land developers and property subsidiary of the Tongaat-Hulett Group, a major South African company which is listed on the Johannesburg Stock Exchange (JSE) and the London Stock Exchange (LSE), with $1.1 billion in assets and 9,100 employees.

IFA’s joint venture partner, Moreland Developments, has developed more than 10 million square metres of land (1 000 hectares), worth more than US $1.5 billion, over the past 10 years.

The existing Zimbali Resort covers 3.7 million square metres (370 Hectares) the expansion of resort will add a further 3.5 million square metres (350 hectares) with 340 properties sold to date.

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Additionally, IFA Hotels & Resorts, a subsidiary of IFA, has purchased 1 million square metres (100 hectares) of land to build a 300 bedroom, five-star hotel, golf course and vacation club.

The combined value of the acquisition by IFA of 50% of the equity in Zimbali Coastal Resort and the planned development of the Zimbali Hotel and Beach Resort makes this transaction, one of the largest tourism investments ever undertaken in the region and a significant investment into the South African tourism industry.

The total economic value of the first phase of the joint venture’s intended development plan is estimated to be in the order of $ 350 million. This is expected to increase to $ 570 million in new capital investment attracted into the area over the ten year planning & development horizon.

The joint venture land will include over phases the sale of 700 freehold properties on the beach and around the existing golf course followed by a further 500 freehold properties-villas, apartments and condominiums on a adjoining lagoon. The expansion of the resort will substantially improve the area and its value and create a single resort community.

“The Zimbali Coastal Resort is considered to be one of the leading property developments in South Africa and boasts the five-star Zimbali Lodge, rated by Conde Naste Magazine as one of the top-31 hotels in the world, an 18-hole golf course designed by Tom Weiskopf and currently rated among the top-25 courses in South Africa, country club facilities and tennis courts, a beach club and an extensive network of nature trails within a secure perimeter estate,” said James Wilson, President & COO, IFA Hotels & Resorts.

“The IFA Zimbali Hotel and Beach Resort will feature a beach club with stunning views of the Indian Ocean, a world class spa, vacation club suites, a country club, resort shopping and luxury villas built around a new 18-hole golf course and will be managed by a top international hotel company. This is an expansion of IFA’s business in South Africa, which creates further synergy with our other top class facilities in other parts of the world.”

This is IFA’s second major investment in Africa within the last three months. In October, IFA Hotels & Resorts signed a 10 year $50 million deal for the largest tourism investment on the famed spice island of Zanzibar. IFA has secured 3 million square metres of land with 3 kilometres of beach front and purchased the 70 room Zanzibar Beach Hotel and outlined plans for a major tourist resort.

The joint venture was presented at an official press function announcing the joint venture between Moreland and IFA Hotels & Resorts for the future development of Zimbali Coastal Resort as an international resort destination. The announcement was made by Jassim M. Al-Bahar, Chairman and Managing Director of Kuwait’s IFA and His Excellency Mohamed Valli Moosa, South Africa’s Minister of Environmental Affairs and Tourism and Tongaat-Hulett CEO, Peter Staude.

Also in attendance were local and regional distinguished executives and guests including, from Moreland its Chairman, Steven Saunders, its Managing Director, Gordon Hibbert and Neels Brink, Development Director. In addition at the ceremony was the Kuwait Ambassador to South Africa, His Excellency Salem Al-Zamanan and Talal Jassim Al-Bahar, Director IFA Hotels & Resorts and General Manager of United Investments Portugal and James Wilson President & Chief Operating Officer, IFA Hotels & Resorts.

Commenting further Jassim Al-Bahar said:

“The Zimbali development is all part of IFA’s strategic aim to provide world class facilities for tourists in prime locations. Zimbali will link with Zanzibar as well as its resort at The Palm-Jumeirah, Dubai, our planned resort in Lebanon and the existing hotel and resort in Portugal, the Sheraton Algarve and Pine Cliffs Resort, which is owned by one of the companies in the IFA consortium, United Investments Portugal.

“We can offer tourists in Europe, the Middle East and Africa a unique network linking IFA’s respective hotels, resorts, timeshare and vacation club destinations.

“Apart from having a distinguished joint venture partner, IFA’s investment in South Africa has been motivated by arrivals statistics produced by the South African Tourism Department which show that more than 6.4 million tourists visited South Africa last year, making it one of the world’s fastest-growing tourist destinations. With overseas tourist arrivals having increased by 20.1%, South Africa has by far exceeded its projected tourism growth numbers. All of South Africa's key markets have posted double-digit growth. Visitors from Europe increased by 24.2%, tourists increased by 20.7% from Asia and 14.5% from Australia.

“The IFA and Moreland joint venture creates a great deal of synergy and will automatically open up South Africa to a large part of the world through the direct access IFA has to current international tourism markets,”

Moreland Managing Director, Gordon Hibbert said:

“Since its inception in 1996, the Zimbali Coastal Estate and Resort development has achieved phenomenal success as a landmark premium resort and residential estate initiative in South Africa. We have developed and sold some 340 residential units in the resort and to date total investment in the eastern precinct of the estate exceeds R1bn. ($145m). In December we will present an additional 27 key sites to the national and international markets by way of an innovative property auction.

“We are delighted to have IFA as our new partners in unlocking the incredible value and potential inherent in Zimbali and we regard the involvement of IFA and IFA Hotels & Resorts as representing a long-term commitment to tourism and economic development in KwaZulu-Natal. IFA is the first major international investor to commit directly to the future of tourism in this province and we are delighted to have concluded this important joint venture agreement. 

“We have over the past few years been looking for a partnership that would open up new international markets and are confident that IFA has the credentials, experience and resources to expose our property developments to key markets abroad.”

Commenting further on the joint venture agreement with IFA, Tongaat-Hulett CEO, Peter Staude said:

“We are delighted to have IFA with its international resorts and market linkages join with us in unlocking further value in this world-class development, as it acknowledges Zimbali’s international stature. As a company we have great faith and confidence in the long-term economic potential of the KwaZulu-Natal north coast and we believe that investors from around South Africa and abroad share in this confidence.”

Jassim Al-Bahar concluded that IFA’s investment in Zimbali, South Africa, together with that in Zanzibar have placed the company in a strong competitive position in Africa’s tourism industry.

“IFA will also seek and evaluate other investment opportunities in South Africa’s tourism industry, commercial sector as well as the banking and investment sectors,” he said.