MAURITIUS - Grit Real Estate Income Group Limited, a Pan-African real estate company, has announced a series of strategic initiatives to strengthen its financial position and operational efficiency. These initiatives include a capital raise by its subsidiary, a partnership for property management, and the consolidation of its diplomatic housing business.
The company's development arm, Gateway Real Estate Africa (GREA), has successfully completed a $100 million recapitalization, with the Public Investment Corporation of South Africa, on behalf of the Government Employees Pension Fund (GEPF), contributing $48.5 million in equity. The recapitalization, effective November 27, 2024, aims to reduce GREA's debt costs and fund high-yield development projects. GREA is also expected to redomicile to Kenya, pending regulatory approval, to be finalized early in 2025.
GREA has been earmarked as the GEPF's strategic platform for investments across Africa, and Mr. Zethu Msindo has been appointed to GREA's board as a GEPF representative as of November 12, 2024.
Grit has entered into a strategic partnership with Broll Property Group, which will take over property and facilities management for Grit's assets, valued at approximately $812 million. This partnership is set to begin on February 1, 2025, and is anticipated to save the company around $1 million annually, allowing it to focus on its core expertise in real estate development and strategic asset management.
In addition, Diplomatic Holdings Africa Ltd and Verdant Ventures have agreed to combine their diplomatic housing businesses, aiming to better serve diplomatic clients and simplify Grit's structure. This transaction is slated to conclude in December 2024 or early in the first quarter of 2025. GREA's 95% interest in Acacia has been transferred to the new entity as part of this consolidation.
Grit has also restructured its obligations to the Drive in Trading, terming out the payment over three years, with an interest rate of 3M (NYSE:MMM) SOFR plus a spread of 5.28%. This transaction is considered a related party transaction due to the PIC's significant shareholding in the company.
The company has been recognized for its performance and was named Africa’s best real estate investment manager at the Euromoney Real Estate Awards 2024.
Grit's strategic priorities include optimizing capital allocation, strengthening financial metrics, streamlining operations, and enhancing operational efficiency to support sustainable long-term growth.
These announcements come ahead of the company's Annual General Meeting, to be held today in Mauritius. The information is based on a press release statement.
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