Grit's legwork pays off in Africa

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Grit Real Estate CEO, Bronwyn Corbett says the company sees potential investment opportunities worth $600m, predominantly in the industrial, corporate accommodation and hospitality sectors. Grit Real Estate CEO, Bronwyn Corbett says the company sees potential investment opportunities worth $600m, predominantly in the industrial, corporate accommodation and hospitality sectors.

Grit Real Estate Income Group, the only listed pan-African property company is soaring and now has a pipeline of opportunities in Africa worth.

The company which is listed on the JSE, in London and Mauritius, is looking forward to a well-earned rest after years of hectic fund-raising for a worthy cause.

Heading into the rest of Africa, a region where most property funds fear to tread, Grit has built a pan-African dual-listed property company with property investments in seven African countries and a market capitalization of $411m in a mere five years.

In a trading update released recently, Grit says it sees potential investment opportunities worth $600m, predominantly in the industrial, corporate accommodation and hospitality sectors.

At the end of December 2018, the company’s property portfolio and other income-producing assets were valued at $796.4m. The company has grown from strength to strength since it was called Delta Africa some five years ago.

The properties are spread across Morocco, Botswana, Ghana, Kenya, Mauritius, Zambia and Mozambique.

Portfolio Activity

For the year ending 30 June, Grit made acquisition of an additional 20 completed units leased to Barloworld at VDE corporate accommodation compound in Tete, Mozambique, including the remaining 15.5 hectares of land earmarked for further development at a total acquisition price of US $3.6 million.

The additional units are adjacent to Grit’s existing 122 unit corporate accommodation asset currently let to Vale and Barloworld.

It further acquired additional 25% equity stake in Mukuba Mall in Kitwe, Zambia for US$8.2 million, which moves the company’s total interest to 75% in one of the best performing retail assets in the region.

The significant redevelopment of the company’s flagship retail asset, Anfa Place Shopping Centre in Casablanca, Morocco, at a capital cost of US$25.09 million, is expected to be delivered materially on time and on budget.

EPRA portfolio occupancy rate rose to 97.2% from 96% reported at the end of December last year. Post the completion of Anfa Place redevelopment, the portfolio was expected to be 98.5% occupied, the company said.

Successful leasing activity in the period included a new five-year office lease to Exxon Mobil in Commodity house Phase 2 in Maputo, a Vale lease extension at VDE in Mozambique and a 10-year lease renewal to Anadarko in Commodity House Phase 1 in Maputo.

The group expects to double its asset base within the next two years given its current pipeline of acquisitions and the demand for new property developments and landlords which provide world class services across the continent.

The woman behind the formation

CEO Bronwyn Corbett has patiently developed Grit into a company which owns income generating shopping centres and offices. The group has set up a management team on the ground which looks after the assets.

Initially, a number of analysts didn't believe Bronwyn Corbett could get Grit to perform adequately. They said she was operating in an overly risky market and spreading her team across too wide a geographic area.

"Grit’s earnings and dividends are underpinned by the company’s secure, diversified and growing index-linked income stream as well as attractive capital appreciation from across our high-quality portfolio, which is delivering attractive returns to our shareholders.

We are well placed with an excellent platform for growth and we look forward to capitalising on a significant and growing pipeline of investment opportunities that the Company has currently identified,” Corbett told Africa Property News.

The company attracts investors partly because it manages to pay dividends in US Dollars. This means it works as a hedge against other African currencies. Investors would rather receive dividends in dollars which keep their value and aren’t too volatile.

Grit is actually on track to deliver a 12% total return to shareholders, and positive dividend growth, for the financial year to end-June.

The company is listed on the JSE and the London Stock Exchange which exposes it to vast array of investors. It wants to get a premium listing on the London exchange so that it can raise capital more easily and join indices which index trackers invest in.

Bridge Fund Managers, which has had an exposure to Grit since inception on the back of its strong management team, says the London listing is helping the company to achieve its long-term growth ambitions.

Unlike in the case of SA, there are large pools of foreign capital in the UK with mandates to expand into Africa.

Other property companies finally investing in Africa include Investec and Growthpoint Properties who are investing together.

The companies have a joint venture which recently bought a Ghanaian shopping centre from Attacq and Hyprop who were part of the AttAfrica venture.

Grit's results are expected to be published around September 26, 2019.

Read more on:

Hyprop Investments  |  Attacq Limited  |  Growthpoint Properties  |  Bronwyn Corbett  |  Attafrica Limited  |  Investec Asset Management  |  Grit Real Estate Income Group Ltd (GTRJ.J)  |  Growthpoint Investec African Properties (GIAP)


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