The Nigeria Sovereign Investment Authority(NSIA) on Friday established a partnership with Old Mutual Investment Group (OMIG) of South Africa to co-invest $500 million in real estate projects.

The NSIA, which is managing Nigeria’s sovereign wealth fund, said at the agreement signing ceremony in Abuja that $500 million would go into real estates.

The partnership would be established as a private investment holding company, jointly owned between NSIA and Old Mutual Property (OMP), with each party committed to an initial funding of $50 million, and opportunity to increase capital to $100 million each.

The Managing Director/CEO of NSIA, Uche Orji, said third party investors would be sought to offer them opportunity to access high yield retail and commercial real estates investments in Nigeria, leveraging NSIA’s market presence, with an experienced co-sponsor real estates team.

The OMP has been involved in real estates, landmark shopping centres, industrial parks and major office blocks development in Africa for over 40 years, with estimated assets under management (AUM) of $1.3 billion as at April 2015.

NSIA’s investment would be made through its wholly owned subsidiary, NSIA Property Investment Company Limited (NPIC), while OMP’s investment would be through its subsidiaries.

Mr. Orji said there was significant level of interest for both funds, ensuring that getting the fund size would not be a challenge.

“The new investment is significant, considering NSIA three pillars to execute its infrastructure strategy, namely investing directly into projects, creating co-investment funds to mobilize third party capital, and bring expertise into areas the agency does not have enough, particularly in agriculture and real estates, and creating enabling institutions that would help drive investments in infrastructure,” he said.

Minister of Finance, Kemi Adeosun,described the agreement signing ceremony as the beginning of a journey to mobilize funds for real estate and agriculture.

Government, she said, had the intention of diversifying the country’s economy, which requires investment in the country’s infrastructure.

“Lack of infrastructure is the real reason the country has not grown the way it should have. Although government was committing to raising about N1.8 trillion of capital investment in the 2016 budget, it was not enough to take care of the problem. This must be supplemented with private capital,” she said.

OMIG CEO, Diane Radley, said the partnership with NSIA was a critical step in the development of its commercial real estate and agriculture strategies in Africa.

“As the largest manager of real assets in Africa, we believe in the opportunities in agricultural and real estate investment across the African continent. Our dealings with agriculture as an asset class has shown that it has already gained huge momentum globally, but is still in its infancy in Africa. This presents a significant investment opportunity for both local and international investors,” Mrs. Radley said.