Grit Real Estate could double its portfolio within two years
CEO Bronwyn Corbett says Grit is unique among JSE-listed property companies because it pays dividends in dollars
Grit Real Estate's decision to list on the London Stock Exchange (LSE) in the middle of 2018 has enabled the Africa-invested property stock to complete two acquisitions and also extend its shareholder base significantly, CEO Bronwyn Corbett says.
This means Grit, which is the only Africa-focused real-estate investment trust (Reit) on the JSE, can raise enough funds to double its portfolio to more than R20bn in two years' time.
Corbett spoke after the company released financial results for the six months to December, where the company said it would deliver 3%-5% dividend growth for its full 2019 financial year.
The group listed on the LSE in 2018 and raised $132.2m of capital in the process. About 15% of Grit's total shareholder base consists of LSE investors. The money enabled it to complete strategic acquisitions in Ghana and Mozambique.
In Mozambique, it acquired a corporate accommodation residence, which it let to both a global petroleum company and a US government agency. It acquired an office in Ghana, which it let to a blue-chip tenant.
Grit owns just less than $800m (R11.3bn) worth of properties spread across Morocco, Botswana, Ghana, Kenya, Mauritius, Zambia and Mozambique. It is on track to double its asset base within the next 24 months given its current pipeline of acquisitions.
Corbett said many South African investors had been hesitant to buy into the stock when Grit listed in 2014 as Delta Property Fund’s Africa arm, under the name Delta International. But market conditions and sentiment had changed and more investors were looking to Africa for growth.
She said Grit was also unique among JSE-listed property companies because it paid dividends in dollars.
Corbett said the group collected 95% of its rent in hard currency, which made Grit a stable investment.
Lawrence Koikoi, a portfolio manager at Stanlib, said Grit's fundamental numbers were strong while many South African funds were struggling.
"Initially many people were unsure of if the management could pull it off in Africa. They were looking throughout the continent for opportunities and we didn't know if they'd be able to build a strong income-generating portfolio. But the team is now getting it right and Grit is becoming defensive and a good diversification opportunity away from South African stocks," he said.