Grit Real Estate, the pan-African property fund, has applied to list on the London Stock Exchange (LSE) to compete for larger institutional investors abroad.
Grit, the only JSE-listed company that invests solely in real estate in the rest of Africa, will also offer offshore investors dividend yields not offered by European property funds.
The company listed on the JSE in 2014 with R2.2bn of assets and spent years scouting the continent for opportunities. Grit now pays dollar-denominated dividends and manages about $600m worth of assets in seven African countries.
"Following consultation with Grit’s major shareholders and advisers, we have resolved to submit an application to the UK listing authority for the admission of Grit’s ordinary shares to a listing on the standard listing segment of the official list of the UK listing authority and to trading on the main market for listed securities of the London Stock Exchange," the group said.
Chief financial officer Leon Paul van de Moortele said that Grit would enhance its liquidity and corporate governance through the listing.
"By jumping through the hoops that the LSE puts forward we effectively get a double check on our governance.
"This is great considering we are a landlord for multinationals in African markets, which some investors may have believed are prone to corruption," Van de Moortele said.
Grit has targeted a total dollar return of 12% for its 2018 financial year and an 8.25% dividend yield and 3.75% net asset value growth. This is while UK and European funds can manage 3%-5% dividend yield. Grit would have primary listings on the JSE main board and the LSE main market. Its primary listing on the Stock Exchange of Mauritius would be termed a secondary listing.
CEO and founder Bronwyn Corbett, said Grit intended to raise additional equity funding through the placing and offer for subscription or sale from treasury of up to 250-million shares in conjunction with the LSE listing. The issue would comprise a placing and a public offer in the UK. In SA and Mauritius the issue would comprise a private placement with only invited investors in SA and Mauritius entitled to participate.