05 May 2025
Mergence Investment Managers has acquired a controlling stake in vital digital infrastructure assets situated in Waterfall City, a prominent residential area in Gauteng. This strategic move, facilitated through the Mergence Infrastructure & Development Equity Fund II, marks a significant expansion of Mergence’s digital infrastructure platform.
The acquisition aligns with the seller’s broader strategy to refocus on its core property development and management operations. Notable assets secured in the deal include a fibre-to-the-home (FTTH) network, which grants Mergence exclusive rights to provide fibre connectivity to approximately 4,000 high-income residential units within Waterfall City. This network is designed with scalable capacity to expand connectivity to more than 9,500 units in the short to medium term, facilitating the essential last-mile connection for end users.
Additionally, the transaction encompasses a 250km long-haul fibre optic backbone that stretches from Waterfall City to the Botswana border at Kopfontein. With ample spare duct capacity, this extensive network is poised to enhance connectivity across significant economic hubs such as Rustenburg and Brits, while also providing high-speed access to underserved mining communities in areas like Cullinan, Zeerust, and Groot Marico.
Mergence Investment Managers highlighted Waterfall City’s strategic location between Johannesburg and Pretoria as a world-class mixed-use development encompassing 2,200 hectares. The area, anchored by the Mall of Africa and benefiting from the proposed extension of the Gautrain, has emerged as a premium residential and commercial center with strong demand for integrated digital infrastructure.
“Fibre connectivity ratios in South Africa remain relatively low at below 40%, whereas connectivity in Waterfall City exceeds 80%,” said Chito Siame, Head of Private Equity at Mergence Investment Managers.
He emphasized that this investment not only bolsters the resilience and reach of their digital infrastructure portfolio but also aligns with their objective of funding at least 30,000 fibre connections across the nation.
The legal and financial advisors involved in the transaction included Norton Rose Fulbright, PSG Capital, and Nodus Capital, with financing provided by Investec.
