Bronwyn Corbett. Picture: SUPPLIED
Bronwyn Corbett. Picture: SUPPLIED

Grit, the only pan-African listed property company, has announced the first of a group of deals that will see it invest $200m (R2.375bn) in Ghana.

"Ghana has been earmarked as an expansion country based on its strong fundamentals. We have been monitoring the country’s economic reform with interest since 2014 and the real estate market has sufficiently repriced to meet our various investment hurdles," said CEO and founder Bronwyn Corbett.

Grit announced it would buy 5th Avenue Corporate Offices, a three storey, fully let 5,070m² GLA A-grade office complex in the upmarket Cantonments quarter of the capital, Accra from Greenline Development, a regional real estate developer in operation since 2010. The purchase yield attributable to shareholders was 10.13%.

The purchase consideration was $20.5m which would will be settled by $14.35m in cash and the balance of $6.15m by way of an issue of fresh shares at Grit’s net asset value of $152.67 per share.

The office complex is anchored by a public-private partnership in which the government of Ghana holds a 38% shareholding. The second biggest tenant is an independent owner, operator and developer of wireless and broadcast communication towers and sites, listed on the New York Stock Exchange.

"In addition to taking a view on the country’s investment merits, our due diligence process places strong emphasis on the quality of tenant, their ability to service the lease in hard currency, the tenure of the lease and rental escalations," said Corbett.

"Our growth to date has been counter-cyclical, and with a $600m portfolio, we have some leverage to structure new acquisitions optimally. Although solid opportunities such as this transaction exist, our focus is not growth at all costs and we remain circumspect when it comes to new territories and transactions. We’re not afraid to walk away from a deal if it doesn’t work."

Ghana is the seventh country to which Grit’s portfolio has exposure. The company has a self-imposed soft target of not exceeding 25% exposure to a single country or single asset class. The other six countries are Morocco, Kenya, Zambia, Botswana, Mozambique and Mauritius.