Grit, the largest and only pan-African focused real estate income group, has announced changes to its board and further expansion of its portfolio in Mozambique and Ghana.

This follows the Company’s earlier announcement in March that it will apply for a listing on the main market of the London Stock Exchange.

Grit has signed binding heads of agreement to acquire an 80.1% interest in Acacia Estate, a corporate residential estate in a prime location of Maputo. 

The estate is leased to an embassy and a multinational oil company.

The purchase consideration for Grit’s 80.1% interest amounts to $23.45m, which will be partly settled in cash and partly through the issue of shares to the sellers. 

The shares will be issued at the last published net asset value per share (excluding dividends) of $152.67 cents. 

There will be no entitlement to dividends prior to the issue of the shares.

The gross lettable area of Acacia Estate comprises 18 400 m2 and is fully let. 

Grit acquired its interest at a purchase yield attributable to shareholders of 8.25%. 

The weighted average lease expiry on the property is 5.2 years with an average escalation rate of 3% per annum.

Bronwyn Corbett, Grit Commented founder member and Chief Executive, said: “This acquisition provides us with further sectoral diversification and a long-term US dollar income stream from exceptional counter parties. Our expansion opportunities in other regions on the continent will furthermore dilute our concentration risk in Maputo significantly.” 

Acacia Estate is the second corporate residential estate Grit has invested into, with the VDE Housing Estate in Tete province one of the Company’s first investments in Mozambique.

In a separate announcement, Grit announced that it has signed a sale of shares agreement with several parties, including Sir Samuel Esson Jonah, one of Africa’s most prominent businessmen, for the acquisition of a 47.5% interest in Capital Place.

Following the recent announcements of the proposed acquisition of 5th Avenue Corporate Offices and a 50% stake in the CADS II building in Accra, the acquisition of an interest in Capital Place will further augment Grit’s in-country portfolio.

“We are very excited to be partnering with Sir Jonah’s company, Mobus Properties (Ghana) Limited. Grit West Africa – our asset management arm in Ghana - will work jointly with Mobus Properties to provide integral asset management services. This long-standing relationship will solidify our access to quality current and future real estate opportunities,” said Corbett.

Grit will finance the acquisition through the issue of new Grit shares, amounting to $8.5m issued at the last published net asset value per share (excluding dividends) of $1.5267 per share.

Capital Place Offices is located in an upmarket part of Accra and comprises three office blocks with a gross lettable area of 4 944 m2 and 45% of the gross lettable area is let to a subsidiary of the largest independent insurer in South Africa and the remaining weighted average lease remaining on the asset is 5.02 years.

The purchase yield attributable to shareholders is 8.58% with a weighted escalation of 4.98%.
In addition, Peter Todd has been appointed as the new Chairman of the Board with effect from April 12, 2018. 

Todd has been on the Board of Grit since his appointment as the lead independent non-executive director on 14 August 2014.

Corbett said: “Peter has served as Grit’s lead independent director since August 2014 and has considerable capital market experience, having served on the boards of several London listed companies. He is Mauritius based, which is an added advantage as the executive team has greater access on an ad-hoc basis.”

Corbett concurrently stepped down from the board of Delta Property Fund Limited where she served in a non-executive capacity, to focus exclusively on the day-to-day management of Grit.

In March, Grit announced that it intends to raise additional equity funding by way of the placing and offer for subscription or sale from treasury of up to 250 million shares in conjunction with the proposed LSE Listing.

The Issue will comprise a placing and a public offer in the UK. 

In South Africa and Mauritius, the Issue will only comprise a private placement with invited participating investors.

Grit expects to commence a series of investor meetings in London later this month, as a prelude to the LSE Listing and the Issue.