28 November 2024. Grand Baie, Mauritius. London-listedGrit Real Estate Income Group Limited (“Grit” or “the Company”) today announced that the Government Employees Pension Fund (“GEPF”), has identified Grit’s development subsidiary, Gateway Real Estate Africa (“GREA”) as a strategic platform for its rest-of-Africa real estate investments.
In addition, the GEPF, represented by the Public Investment Corporation of South Africa (“PIC”), injected US$48.5 million of cash equity as part of a US$100 million recapitalisation of GREA and appointed Mr Zwethu Msindo as a representative to GREA’s board.
The GEPF is Africa’s largest pension fund and a founder investor of GREA, represented by the PIC, Africa’s largest asset manager.
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.
Ms. Bronwyn Knight, CEO of Grit commented:
“GREA’s consistent performance since inception in 2018 has been recognised by the GEPF as strategic platform for its rest of Africa real estate investments. Their ongoing commitment through the US$48.5 million recapitalisation 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, whilst earning development margins north of 10%.”
The US$48.5 million equity investment will initially be utilised to reduce the Group’s more expensive debt before being deployed by GREA through careful capital allocation assessment, into risk-mitigated and yield-accretive development projects that are expected to meaningfully contribute to accelerated NAV and income growth as well as ESG impact as contemplated under the Grit 2.0 strategy.
In terms of its 2.0 Strategy, Grit has simplified its structure of core assets into four sectors, including Bora Africa, which houses its light industrial, data centres, logistics, and warehouse assets, DH Africa, which houses the Group’s diplomatic and corporate accommodation portfolio, Healthcare Impact Africa for healthcare assets, and Office Park Africa, for Grit’s commercial office portfolio.
Greg Pearson, Group MD and GREA CEO concluded:
“We are very excited to be partnering with Africa’s largest pension fund to unlock our significant pipeline of impact real estate assets and look forward to the input and guidance Mr Msindo will add to the board.”
“GREA’s immediate pipeline opportunities include a further diplomatic housing development on behalf of the United States Bureau of Overseas Building Operations, and a second BPO centre in Nairobi, Kenya, on behalf of CCI Global.”
These portfolios will continue to focus on hard-currency leases and global or multinational tenants that provide significant employment opportunities on the continent.
Equity investors and funders with mandates for specific asset classes will be allowed to co-invest at a sub-structure level.
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 United States Bureau of Overseas Building Operations, despite pandemic-related supply chain disruptions.
In addition, GREA successfully delivered the Precinct office park in Mauritius, 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.
“The Precinct Unity building is now fully let, with strong tenant interest in Freedom building, the second development at this landmark office park,” added Knight. More recently, GREA handed over Eneo at Tatu Central, the largest business process outsourcing (“BPO”) centre 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.