Grit Real Estate Inc - Trading Update
(Registered by continuation in the
(Registration number: C128881 C1/GBL)
LSE share code: GR1T
SEM share code: DEL.N0000
JSE share code: GTR
("Grit" or the "Company")
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.
The board of Directors (the "Board") of
Grit is the leading pan-African real estate company focused on investing in and actively managing a diversified portfolio of assets underpinned by predominantly US$ and Euro denominated long-term leases with high quality multi-national tenants. The portfolio comprises 25 investments in seven carefully selected investment grade and high growth African countries, excluding
· Current portfolio continues to deliver secure and growing income and is trading in line with the Board's expectations.
· Successful leasing activity in the period includes a new five-year office lease to Exxon Mobil in Commodity house Phase 2 in
· Significant and growing identified pipeline of attractive potential investment opportunities, diversified across sector and geography, which total circa
· The Company has successfully deployed its existing equity and debt capital and is considering its options in respect of raising further capital to fund the pipeline in due course.
· The Company is intending to expand its current strategy to include a limited number of development opportunities in the short to medium term.
· The Company is on track to deliver its targeted 12% total shareholder return and positive growth in dividend for the financial year ending
HIGH QUALITY & DIVERSIFIED PORTFOLIO DELIVERING SECURE & GROWING INCOME
· Portfolio activity includes:
o Acquisition of an additional 20 completed units leased to Barloworld at VDE corporate accommodation compound in Tete,
o Acquisition of an additional 25% equity stake in
o The significant redevelopment of the Company's flagship retail asset,
· EPRA portfolio occupancy rate of 97.2% (
· A weighted average contracted annual rental escalation across the portfolio of 3.12% (
· Portfolio Weighted Average Lease Expiry ("WALE") of 6.3 years (
· 95% of the 27,425 sq m expiring gross lettable area ("GLA") over the last 12 months has been successfully renewed or replaced as part of the Company's active asset management strategies. Significant leasing activity over the period included:
o New office lease concluded with Exxon Mobil (1873 sq m) in Commodity House Phase 2 in
o Agreement in principle with Vale for the development of an additional 40 two-bedroom and 20 three-bedroom units (subject to final contracting) and includes a lease extension on the existing 102 corporate accommodation units for a further five years on the same lease terms as the additional 60 units.
o Successful conclusion of a new 10-year office lease, including an increase in GLA, with
o Grit's exposure to convenience shopping and pro-active asset management initiatives have assisted in offsetting the challenges faced in the retail sector across
· Successful pre letting and re-tenanting activities are expected to result in vacancies at
· VIP Spar (1780 sq m) introduced as anchor tenant in
· Grit is in advanced discussions with a number of international emerging market retailers to take up space that South African fashion retailers, which are considering consolidation into fewer African markets, may potentially vacate.
VALUE ENHANCING ASSET MANAGEMENT ACTIVITIES
· The internal Asset Management capabilities and expertise of the Group continue to be strengthened in line with property portfolio growth and the strategy of providing services from within the Group. This should support progress towards the medium-term target of reducing administration costs to assets towards 0.8% (
· The current geographic footprint supports existing operations but is also staffed to accommodate immediate pipeline opportunities:
· The Group continues to target Loan to Value ("LTV") of between 35% and 40% over the medium term (as at
ON TRACK TO DELIVER TARGETED TOTAL RETURN
· Notwithstanding the negative impact of the move in average EURO/USD exchange rates over the reporting period and the tough retail environment, the Company is on track to deliver its 12% total shareholder return target for the financial year to
· The Company is on track to deliver growth in dividend for the financial year ending
MOVE TO THE PREMIUM SEGMENT OF THE MAIN MARKET OF THE
· The Group is intending to move to the premium listing segment on the
SIGNIFICANT & GROWING IDENTIFIED PIPELINE OF ATTRACTIVE INVESTMENT OPPORTUNITIES
· The Group currently has access to a significant number of attractive pipeline opportunities from existing tenants and other multinational companies operating across the African continent.
· All targets are carefully considered by the Investment committee and are consistent with the Company's existing strategy of owning a diversified portfolio of high-quality assets in carefully selected investment grade and high growth African countries underpinned by high quality tenants.
· The Company continues to target a diversified investment portfolio, having no more than 25% exposure to any one country or sector over the medium term and seeks to avoid excessive tenant concentration. Pipeline opportunities are considered with these and other criteria in mind.
· As at
· The Company has successfully deployed its equity and debt capital and is considering options in respect of raising further capital in the short to medium term to fund these further investments, that are in line with its investment strategy and with a view to delivering further value for its shareholders.
· The tenant-led business strategy continues to be delivered through three principal areas of focus, namely
· The Company remains committed to targeting a secure and growing dividend underpinned by high quality hard currency leases and contracted rental escalations. Cash generation from operations is expected to accelerate after the delivery of the
· The Company will seek to participate in development-based opportunities of up to 30% of its total portfolio in the short to medium term, where pre and post funding strategies are expected to unlock significant potential for NAV growth. The Company will seek to mitigate any delivery risk through strategic partnerships and strong commercial agreements where the risk is transferred to third parties. The de-risked nature of these developments is not expected to impact dividends and will be a key component of delivering sustainably higher targeted future NAV growth from Grit's strong multinational tenant relationships.
· Grit has built scale and skills across the African continent to service its multinational tenant base. Provision of Asset Management Services, both internally and to external property owners is a strategic focus area for the Group. This is expected to drive strong fee generation and should assist in lowering a number of the Group's operating cost ratios.
· The Company believes that the promulgation of REIT legislation in countries across the African continent will create a platform for investment, a market for attracting co-investment and will provide a framework for improved real estate liquidity and sustainable yield compression. A significant portion of Grit's current property portfolio and its pipeline are in jurisdictions considering, currently promulgating or introducing REITs and the Company is actively investigating these and a number of other property co-investment opportunities.
"The Group continues to focus on delivering its investment strategy and remains on track to meet full year income distribution growth and a minimum total annual net shareholder return target of 12%+ in US Dollars for the year ending
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."
By Order of the Board
FOR FURTHER INFORMATION, PLEASE CONTACT:
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+230 269 7090
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+44 779 512 3402
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+27 82 480 4541
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Maitland/AMO - Communications Adviser
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+44 20 7379 5151
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finnCap Ltd -
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+44 20 7220 5000
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+44 20 3772 4697
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+44 20 3772 4698
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Shamin A. Sookia
+230 402 0894
+230 402 0898
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+27 21 887 9602
The Company's LEI is: 21380084LCGHJRS8CN05
The Company is committed to delivering strong and sustainable income for shareholders, with the potential for income and capital growth. The Company is targeting an annual dividend yield in USD of 8%+ and a net total shareholder return inclusive of NAV growth of 12.0%+ p.a.*
The Company currently holds primary listings on both the Main Market of the
Further information on the Company is available at http://grit.group/
*These are targets only and not a profit forecast and there can be no assurance that they will be met.
Peter Todd+ (Chairman),
(* Executive Director) (+ independent Non-Executive Director)
Registered address: c/o
Transfer secretary (
Registrar and transfer agent (
JSE sponsor: PSG Capital Proprietary Limited
SEM authorised representative and sponsor:
This notice is issued pursuant to the JSE Listings Requirements, LSE Listing Rules, Article 19 of MAR, SEM Listing Rule 11.3 and Rule 5(1) of the Securities (Disclosure Obligations of Reporting Issuers) Rules 2007. The Board accepts full responsibility for the accuracy of the information contained in this communiqué.
This information is provided by RNS, the news service of the
Quick facts: Grit Real Estate Income Group
Market Cap: $208.03 m
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