Property Flash


October 31 2023

London and Mauritius listed property company, Grit Real Estate is talking to a variety of financiers to help the pan-African group to raise money so that it can invest what it calls “impact assets” such as call centres, data centres and healthcare properties.

Grit, which was previously known as Mara Delta, Delta International and Delta Africa, turns 10 in 2024 and its management team wants to ensure that Grit grows strongly while providing consistent returns for its investors. Grit recently acquired development group, GREA.

“We are in talks with a very large DFI who could help fund investments in impact assets. Even though there is so much uncertainty in the world right now, I believe Grit is in a very strong position. The future is exciting,” said CEO Bronwyn Knight.

Knight spoke to Property Flash following the release of financial results for the year to end-June 2023. Grit which was first listed on the JSE, owns assets in some eight African countries. It attracts numerous investors who want to receive dollar-denominated returns. The countries include Kenya, Morocco, Zambia, Botswana, Mauritius, Mozambique, Ghana and Senegal.

Grit said its ability to sustain a distribution is supported by predominantly US Dollar and Euro-denominated long-term leases, with blue-chip multinational tenants delivering strong sustainable income. The group tends to focus on owning offices which are rented out to high-end blue chip tenants as well as corporate accommodation.

Knight said the financial year saw much change at Grit.

“The financial year to 30 June 2023 was a transitory year for the group characterised by disposals of non-core assets, reducing debt and debt refinancing risks and substantial progress on the acquisition of a majority interest in GREA, the group’s development associate. GREA successfully delivered the award-winning Precinct office park and Artemis Curepipe Hospital developments in the year and is on time and on budget on the ENEO Tatu City call centre facility, expected to be completed mid 2024,” she said.

Global interest rate volatility provided headwinds to our strong property portfolio operating performance, where a 5.7% increase in net operating income, excluding properties sold, was affected by rising finance costs.

“Our focus will remain on sustainably growing distributable income and enhancing capital growth while continuing to target key portfolio metrics such as lowering the LTV, vacancy and cost factors and further strengthening the balance sheet and liquidity position through focused asset recycling initiatives,” said Knight.

Grit disposed of $130m of properties. As much as $86m was invested into GREA.

Grit is not a real estate investment trust (Reit) but its investors have seen it as in income fund. Reits tend to be low growth, and dividend focussed as they pay the majority of their income as a dividend each financial year.

Knight said her team was working to sustain Grit as an investment platform. Given its ownership of GREA, it will receive development fees and would look to grow its net asset value through more developments.

Financial highlight during the reporting period included its diluted earnings per share shifting from $2.62c per share in the 2022 financial year to a loss per share of $4.90. Distributable earnings per share of
$4.29 c per share were achieved compared with $5.08 c per share in 2022.

Contractual rental collected was 101.3% compared with 92.8% a year before.

Total income producing assets sat $862.0m compared with $856.7m a year before. The group’s loan-to-value (LTV) sat at 44.3% compared with 46.7% a year before. The fund wants to decrease the LTV below 40% in the coming months.

LTV measures a group’s debt compared with its asset base.

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