Mauritius-based property investment firm Delta Africa plans to merge with Mara Diversified Property Holdings, the real estate arm set up by entrepreneur Ashish Thakkar’s Mara Group, in a 1 billion rand deal ($70.4 million US) that will create a new company, Mara Delta.

This new strategic relationship will create a property powerhouse on the African continent, according to ePropertyNews.

Mara Delta will become the largest pan-African property fund on the Johannesburg Stock exchange with more than 6.5 billion rand ($458.2 million) in assets once the merger is completed, BusinessDayLive reports.

Mara Diversified is owned by the Johannesburg-based Pivotal Property Fund, a JSE-listed developer. It will inject Kenyan retail and Nigerian office developments into Delta Africa in a $70.4-million deal.

The deal will give a much-needed boost to Delta Africa, which has struggled in the past to secure large deals to grow its portfolio, BusinessDayLive reports.

Pivotal had initially planned to list Mara Diversified Property Holdings separately on the JSE before deciding to opt instead for the merger with Delta Africa.

Delta Africa will retain its listings on the JSE and Stock Exchange of Mauritius, but will be renamed Mara Delta, BusinessDayLive reports.

“This deal is massive for Delta Africa. It more or less doubles our size and exposes us to a new pipeline of properties,” Delta Africa CEO Bronwyn Corbett said Tuesday.

“Delta Africa as Mara Delta will be uniquely positioned with economies of scale to consolidate a number of these opportunities on the continent.”

Pivotal was listed in December 2014 as a fund that arose out of property developer Abland. Abland has since launched Abland Africa, a development business in Africa.

The investment company Mara Group, Abland Africa, and Kenyan developer Carlisle Property Holdings will be appointed to find sources of investment and development opportunities across Africa for Mara Delta as part of the agreement.

“The larger company will have an additional strong anchor shareholder in Pivotal, access to a considerable acquisition and development pipeline through Abland Africa and other promoters as well as the track record and expertise to draw on local knowledge and experience,” Corbett said.

As part of the deal, Delta Africa will acquire Mara’s two assets worth $73.48 million — Buffalo Mall Naivasha, a Kenyan retail, commercial and entertainment center development and Oando Wings, an office development in Nigeria.

Pivotal will also commit about 300 million rand ($21.1 million US) in capital funding.

Pivotal CEO Jackie van Niekerk will join the Mara Delta board as a non-executive director.

Ashish J. Thakkar will also be a non-executive director after the closing date, according to ePropertyNews.

Pivotal is excited to work with Delta Africa as it has an established presence on the continent, van Niekerk said.

“Mara Delta will be a total return fund with a good income-producing portfolio currently valued at $458 million, alongside a solid development component,” van Niekerk said.

The development component was estimated at $500 million, to be rolled out over five to 10 years, she said.

The Delta Mara partnership appeared to be a strong move by both parties, said Keillen Ndlovu, Stanlib’s head of listed property funds.

“It’s a good deal. It has more critical mass as compared to funds doing something on their own and having small portfolios,” he said.

Dubai-based Mara Group is a pan-African conglomerate and business services company that includes real estate, technology, financial services, manufacturing, agriculture industries.

The company was founded by entrepreneur Ashish J. Thakkar and is now active in 24 countries including 22 in Africa, employing more than 11,000 people.

Mara Diversified Property Holdings was set up to invest in sub-Saharan African commercial real estate developments, according to its website.

Its promoters have a long track record in property development (Mara, Abland and Retail Africa) as well as strong presence in a variety of African countries in various business sectors. This enables Mara Diversified to take advantage of opportunities which would not normally be available to its competitors, the company says.

Delta Africa’s primary objective has been to invest in undervalued real estate assets in retail and commercial sectors, and in listed property securities. Its goal was to become the leading real estate owner on the African continent outside of South Africa in the next five years, according to its website.