Grit buys a stake in Maputo complex
Grit has investments in six African countries
Grit Real Estate, the only pan-African property fund listed on the JSE, has acquired a stake in Acacia Estate, a complex in Maputo, Mozambique that provides corporate accommodation to American clients.
This is Grit’s first foray into the corporate accommodation sector, which tends to cater for investors who are working on short-to medium-term projects in Africa.
Grit CEO Bronwyn Corbett said the group had started to see demand from companies, especially Americans, looking for accommodation for their staff while doing projects in Africa.
Acacia Estate offered housing units that met high security requirements and were in walking distance of an international school in Maputo.
Corbett said her team had wanted to acquire the residential complex for the past three years. JSE-listed Tradehold was the owner. Grit would buy an 80.1% stake in the A-grade complex for about $23m, while its developer would hold 19.9%.
The asset included two attractive leases, one of which was a 12-year lease with the American Embassy and a separate 10-year lease with American petroleum and natural gas exploration firm Anadarko.
Grit has investments in six African countries.
Brendon Hubbard, a portfolio manager at ClucasGray, said Acacia was an exciting acquisition with numerous positive aspects for Grit.
"The US government is building a very large embassy in Maputo on the back of the $49bn gas investment going into Mozambique from Anadarko and Exxon Mobil. In addition, the Anadarko gas project is expected to employ 25,000 people during the building phase starting in 2019," he said.
Hubbard said the estate was built to US government regulations for embassy staff and included its own water purification systems and back-up power units. The estate yielded 8% with 3.6% escalations, which was attractive compared with the US 10-year government bond’s yield of 2.8%.