Real estate investment trust Grit is focusing on multiple asset classes, multiple geographies and hard currency to ensure success on the African continent.
While many South African companies have had mixed successes when venturing into Africa, the multi-listed Pan African REIT (real estate investment trust) Grit Real Estate Income Group, is proving that the right recipe will reap rewards.
Robust risk mitigation has been key to Grit’s success, which included multiple listings, multiple geographies and multiple asset classes. Key partnerships and multinational tenants further insulate the company from the risks that often face investments in the region.
“The success of our African business has been partnerships,” says CEO Bronwyn Corbett.
Corbett was instrumental in forming Delta International, Delta Property Fund’s Africa offshoot that listed separately on the JSE as Mara Delta Property Holdings in 2014. In 2017, the company was rebranded to Grit Real Estate Income Group.
Grit remains the only Africa-focused REIT on the JSE, paying dividends in hard currency. That ability to pay dividends in dollars came with its listing on the Mauritius Stock Exchange (SEM) in 2015. Last year Grit also listed on the London Stock Exchange (LSE).
Grit’s property portfolio of 25 assets is valued at $796.4m. It is headquartered in Mauritius, with further investments in Botswana, Ghana, Kenya, Morocco, Mozambique and Zambia.
Grit has been careful to only forge into stable markets as opposed to high-risk jurisdictions. Margins of safety include security of tenure, ability to get debt in the country and most importantly, ability to move money out of the country.
“We wanted to be multi-geography. We had seen too many real estate businesses being commodity focused in only one or two countries. Then the commodities cycle turned on them,” explains Corbett.
Grit views the continent in two parts. Half of its investments goes into investment-grade countries, and the other half into what Corbett terms “growth Africa”.
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