REG-Grit Real Estate Income Group GREA COMPLETES US$100 MILLION RECAPITALISATION

Grit Real Estate IncomeAnnouncement

28/11/2024 09:15

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   Grit Real Estate Income Group (GR1T)
   GREA COMPLETES US$100 MILLION RECAPITALISATION

   28-Nov-2024 / 09:00 GMT/BST

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   GRIT REAL ESTATE INCOME GROUP LIMITED

   (Registered in Guernsey)

   (Registration number: 68739)

   LSE share code: GR1T

   SEM share codes (dual currency trading): DEL.N0000 (USD) / DEL.C0000      
   (MUR)

   ISIN: GG00BMDHST63

   LEI: 21380084LCGHJRS8CN05

    

   ("Grit" or the "Company" or the "Group")

    

    

                GREA COMPLETES US$100 MILLION RECAPITALISATION;

   GEPF CONFIRMS GREA AS GROWTH PLATFORM FOR AFRICA WITH APPOINTMENT TO GREA
                                     BOARD;

    

    

   1.    INTRODUCTION

   The Board of  Directors (the  "Board") of  Grit Real  Estate Income  Group
   Limited, a  leading pan-African  income real  estate company,  focused  on
   investing in, developing and actively managing a diversified portfolio  of
   assets underpinned  by predominantly  US$ and  Euro-denominated  long-term
   leases  with  high-quality  multi-national  tenants,  today  confirms  the
   conclusion  of  the  US$100   million  recapitalisation  of  the   Group’s
   development subsidiary Gateway Real Estate Africa (“GREA”) with receipt of
   the  Public   Investment   Corporation   of   South   Africa’s   (“PIC”’s)
   proportionate  US$48.5  million  capital  investment  (“the  PIC   Capital
   Investment”) on behalf of the Government Employees Pension Fund (“GEPF”).

    

   The GEPF  has  furthermore  recognised GREA's  consistent  performance  in
   delivering value to its  shareholders, viewing it  as a strategic  vehicle
   for its  real  estate  investments  across the  rest  of  Africa,  with  a
   continued commitment to this partnership.

    

   Consequently, the Board is  pleased to announce that  Mr Zethu Msindo  was
   appointed as a representative of the GEPF to the board of GREA with effect
   from 12 November 2024.

    

    

    

   2. RATIONALE AND USE OF PROCEEDS

   This cash  equity  injection  will  be  utilised  to  reduce  GREA’s  more
   expensive  debt,  and  over  the  medium  term,  will  be  deployed   into
   risk-mitigated and  accretive development  projects that  are expected  to
   meaningfully contribute to  ESG impact,  accelerated NAV  growth, and  fee
   income generation to  the Group,  as is  contemplated under  the Grit  2.0
   strategy.

   This includes development  projects earmarked in  specialised real  estate
   sub-structure portfolios  including diplomatic  housing on  behalf of  the
   United  States  Bureau  of   Overseas  Building  Operations  (“US   OBO”),
   healthcare and business process outsourcing (“BPO”) centres at development
   yields in excess of 10%.

    

   3. EFFECTIVE DATE

   The effective draw-down date  of the recapitalisation  was on 27  November
   2024.

    

   4. ONGOING SUPPORT FROM PIC and GEPF

   The PIC’s and GEPF’s ongoing support provides transformative contributions
   to Grit’s strategic objectives, which include:

   i. Advancing Grit’s simplified 2.0 Structure
   ii. Aggregating  sector-focused  portfolios  in  light  industrial,   data
       centres,  logistics   and   warehousing,  diplomatic   and   corporate
       accommodation, healthcare,  and  commercial office  parks  focused  on
       hard-currency leases and predominantly global or multinational tenants
       that provide significant employment opportunities on the continent
   iii. Reduced cost of funding
   iv. Disposal of non-core assets
   v. Pioneering impact and sustainable real estate investments across Africa

   GREA holds a track record  of having delivered award-winning  developments
   across its focus areas, including  Rosslyn Grove Diplomatic Residences  in
   Nairobi,  tenanted   under  a   long  lease   by  the   US  OBO,   despite
   pandemic-related supply chain disruptions.

   In addition, GREA  successfully delivered  the Precinct  office park,  the
   first 5-star green-star rated commercial  development in the Indian  Ocean
   Island region, and the  first Eco Districts  certified commercial node  in
   Africa.

   More recently, GREA handed over Eneo  at Tatu Central, the largest BPO  in
   Kenya, to its anchor tenant, CCI Global. This development was successfully
   delivered ahead  of schedule  in  18 months  as  opposed to  the  original
   26-month timeline, and 8% under the estimated budget.

    

   5. GEPF REPRESENTATION ON GREA’S BOARD

   Mr Msindo serves as an employee-nominated trustee on the board of the GEPF
   and the Chairperson of the Advisory  Board, in addition to being a  member
   of the Investment Committee, Valuations  Subcommittee and the Benefit  and
   Administration Committee.

    

   He holds a Masters’  Degree in Management of  Finance and Investments,  an
   MBA and a BSc in Chemistry and Chemical Sciences in addition to RE 1 and 5
   regulatory certificates.

    

   Mr Msindo  has more  than two  decades’ experience  in financial  services
   including  in  employee  benefits,  group  insurance,  and   institutional
   investment solutions. He has  held positions at  Momentum, Old Mutual  and
   Prescient Investment Management, among other financial services firms.

    

   6. CONCLUSION

   The US$100 million, which included the US$48.5 million cash injection  and
   ongoing support  from the  PIC, further  advances Grit’s  2.0 Strategy  to
   organise the Group’s real estate assets into logical sector sub-structures
   across Africa  which  are  then  held as  investments  or  sold  to  other
   investors.

    

   Bronwyn Knight, CEO of Grit, commented:

   “GREA’s consistent performance since inception in 2018 has been recognised
   by the PIC as a  vehicle for its rest  of Africa real estate  investments.
   Their ongoing commitment through the US$48.5 million cash equity injection
   will  accelerate  our  Grit  2.0  strategy  considerably,  expediting  the
   formation of sector-specific sub-structures that are higher-yielding, more
   resilient, and with greater social impact delivered at development  yields
   in excess of 10%.” 

    

   Greg Pearson, CEO of GREA, commented: 

   “Being  identified  by  the   GEPF  as  a   strategic  platform  for   the
   implementation of GEPF’s property investment objectives across the rest of
   Africa is a tremendous  honour and privilege. We  are thrilled to  welcome
   Mr. Msindo  to  the  board  of  directors of  GREA  and  look  forward  to
   collaborating with  him  closely  as  we continue  to  deliver  on  GREA’s
   substantial pipeline.”

    

   By Order of the Board

    

   28 November 2024

    

   FOR FURTHER INFORMATION, PLEASE CONTACT:

   Grit Real Estate Income Group Limited                      
   Bronwyn Knight, Chief Executive Officer                   +230 269 7090
   Group Investor Relations                                  ir@grit.group
                                                              
   Cavendish Capital Markets Limited - UK Financial Adviser   
   James King /Tunga Chigovanyika/Teddy Whiley (Corporate    +44 20 7220 5000
   Finance)
   Justin Zawoda-Martin / Daniel Balabanoff/Pauline          +44 20 3772 4697
   Tribe (Sales)
                                                              
   Perigeum Capital Ltd - SEM Authorised Representative and   
   Sponsor
   Shamin A. Sookia                                          +230 402 0894
                                                              
                                                              
   Capital Markets Brokers Ltd - Mauritian Sponsoring Broker  
   Elodie Lan Hun Kuen                                       +230 402 0280

    

   NOTES:

   Grit Real Estate Income  Group Limited is  the leading pan-African  impact
   real estate  company  focused on  investing  in, developing  and  actively
   managing a diversified portfolio of  assets in carefully selected  African
   countries  (excluding  South  Africa).   These  high-quality  assets   are
   underpinned by  predominantly US$  and Euro  denominated long-term  leases
   with a wide range  of blue-chip multi-national  tenant covenants across  a
   diverse range of robust property sectors.

   The Company is committed to  delivering strong and sustainable income  for
   shareholders, with  the  potential  for income  and  capital  growth.  The
   Company holds its primary listing on  the Main Market of the London  Stock
   Exchange (LSE: GR1T and a dual  currency trading secondary listing on  the
   Stock Exchange of Mauritius (SEM: DEL.N0000 (USD) / DEL.C0000 (MUR))

   Further information on the Company is available at www.grit.group

   Directors: Peter Todd (Chairman), Bronwyn Knight (Chief Executive Officer)
   *, Gareth Schnehage (Chief Financial Officer) *, David Love+, Catherine
   McIlraith+, Jonathan Crichton+, Cross Kgosidiile, Lynette Finlay + and
   Nigel Nunoo+.

   (* Executive Director) (+ independent Non-Executive Director)

   Company secretary: Intercontinental Fund Services Limited

   Registered office address: PO Box 186, Royal Chambers, St Julian's Avenue,
   St Peter Port, Guernsey GY1 4HP

   Registrar and  transfer  agent (Mauritius):  Intercontinental  Secretarial
   Services Limited

   SEM authorised representative and sponsor: Perigeum Capital Ltd

   UK Transfer secretary: Link Assets Services Limited

   Mauritian Sponsoring Broker: Capital Markets Brokers Ltd

   This notice is issued pursuant to the FCA Listing Rules, SEM Listing  Rule
   15.24 and the  Mauritian Securities  Act 2005.  The Board  of the  Company
   accepts full responsibility for the accuracy of the information  contained
   in this communiqué.

    

                                                                             

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   Dissemination of a Regulatory Announcement, transmitted by EQS Group.
   The issuer is solely responsible for the content of this announcement.

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   ISIN:          GG00BMDHST63
   Category Code: UPD
   TIDM:          GR1T
   LEI Code:      21380084LCGHJRS8CN05
   Sequence No.:  362002
   EQS News ID:   2039961


    
   End of Announcement EQS News Service

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