Grit, the only listed Africa focused distribution group to offer international property investors direct access to immediate high growth opportunities on the African continent outside of South Africa, announced on 17 July that it will officially seek approval from the UK Listing Authority to proceed with its listing on the main market of the London Stock Exchange (LSE).
Bronwyn Corbett, founder member and Chief Executive of Grit commented: “Our planned listing on the London Stock Exchange will create a compelling opportunity for UK and other equity investors to gain exposure to the African real estate sector, which offers some of the best returns in the global property market. “We have a proven track record of generating income from our selective and diversified range of assets, built through our close and detailed understanding of the region’s property investment environment.
“The listing will support our aim to grow our portfolio further and become the leading real estate owner on the African continent outside South Africa.” As part of the listing, Grit will issue up to 250 million new ordinary shares at an EPRA net asset value of US$1.43 per ordinary share, to raise a minimum of US$120 million. The issue will be by means of an offer for subscription in the UK and a private placement of ordinary shares in the UK, South African and Mauritius. The proceeds of the listing will be used to grow Grit’s portfolio in Ghana, where it has access to a high-quality pipeline of assets, as well as in other regions, and to reduce gearing. “We are extremely excited about the prospects of listing in London,” said Corbett.
“The teams have been working exceptionally hard since late last year to make this happen. Our final hurdle in the listing process was the application of Best Practice Recommendations by the European Public Real Estate Association to our business, which has traditionally used IFRS as a benchmark. We have now received the all-clear and will proceed with the application to list by end of July.”
Once listed on the LSE, Grit will hold primary listings on the JSE, the LSE, and SEM. AXYS Corporate Advisory is acting as lead transaction adviser and Perigeum Capital is acting as the Mauritian transaction adviser. finnCap Limited is acting as UK financial adviser and joint UK placing agent. Baden Hill, a trading name of Northland Capital Partners Limited and Exotix Partners LLP are acting as joint UK placing agents. PSG Capital is acting as sponsor and placing agent in South Africa.
Key Grit Highlights
A track record of returns and strong dividend yields
– Grit is targeting a US Dollar total return of approximately 12.00% per annum
– Eight dividend distributions since its launch in 2014 – Weighted average cost of debt of 5.7% as at 30 June 2018
– The target dividend in relation to the six months ended 30 June 2018 is approximately US$5.9 cents per Share
– Rental income predominantly generated in US$ and Euros
– Bulk of income paid out to shareholders as semi-annual dividends
Strong focus on selected African countries with strong fundamentals and strength of counterparty
– Economic growth in sub-Saharan Africa averages more than 5% per annum since 2000, driving rapid urbanisation and a growing middle class
– Increased demand for modern properties from domestic and international businesses
A selective portfolio of quality assets, diversified across sectors, jurisdictions and tenants
– Currently present in seven African markets (Botswana, Kenya, Mauritius, Morocco, Mozambique, Ghana and Zambia)
– Other markets targeted or under consideration include Senegal and the Seychelles
– Grit has a self-imposed soft concentration limit of 25% of gross assets per operational jurisdiction.
Diversified by sector with retail, office, hospitality, light industrial and corporate accommodation assets.
Experienced management with in-depth practical experience of the Company’s existing and targeted jurisdictions
– Management with over 65 years combined African real estate experience – Key executives significantly invested in the Company
– Robust processes in place and strong competency to manage the portfolio of properties
A customer base of international tenants with long-term leases
– Existing portfolio has a Weighted Average Lease Term of 7.0 years as at 30 June 2018
– Core tenants include international blue-chip companies such as Vodacom (part of Vodafone Group), Barclays, KPMG, BP and the British Council, and leading South African retailers with pan-African operations such as Shoprite and Game
– Current low vacancy rate of 2.8% as at 30 June 2018
Significant pipeline of attractive developments and assets identified
– Selective expansion into new jurisdictions will generate additional revenue flows from completed, high-quality assets and further diversification
– Existing network of developers, property owners and tenants position the Company advantageously for emerging opportunities
Sirius Real Estate Limited
One of the largest branded providers of mixed-use flexible workspace in Germany, Sirius Real Estate Limited is a real estate company with a portfolio of 54 business parks owned or managed across Germany, providing a combination of conventional and flexible workspace.
CEO: Andrew Coombs
Andrew Coombs joined the Sirius Facilities Group in January 2010. Prior to joining Sirius, Andrew worked for the Regus Group as UK sales director and before that as director and general manager for MWB Business Exchange Plc. Prior to working in the property sector, Andrew held a number of general management roles.
Tower Property Fund
Tower is an internally managed real estate investment trust (REIT) which owns a diversified portfolio of 46 convenience retail, industrial and office properties valued at R4.9 billion, located in South Africa and Croatia. The South African portfolio is located in the country’s major metropoles with 43% by value in Cape Town, 43% in Gauteng and 14% in KwaZulu-Natal. The five Croatian properties represent 28% of the fund’s total value. The fund currently has a sectoral spread by value of 46% convenience retail, 47% office and 7% industrial.
CEO: Marc Edwards
Marc is the founding Chief Executive Office of Tower. Marc has a long history in the property industry and is well known in the South African and Croatian property industries. Marc is a Director of various Tower group companies and a shareholder of Spire Property Group (Pty) Ltd.
Financial highlights (31 May 2018)
- Distribution of 40.3 cents per share representing 5% growth from corresponding period
- Distributable earnings of R266 million
- Portfolio at 46 properties after the continued sale of non-core assets
- Portfolio value of R4.9 billion
- Market capitalisation of R2.3 billion
- Loan-to-value of 39%
- Net asset value of R9.68 per share
- Properties sold or in the final process of sale of R247 million