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

Grit Real Estate Income Group, which owns properties across Africa, has agreed to buy a hotel at a Senegalese Club Med resort for about €11.6m (R180m).

“The acquisition is expected to enable Grit to enter, in a targeted manner, the property market of the Republic of Senegal — one of Africa’s most stable countries with a large and high growth economy,” Grit said on Wednesday.

The landlord currently operates in seven African states: Kenya, Morocco, Zambia, Botswana, Mauritius, Mozambique and Ghana.

Grit said it would enter into a strategic relationship via the sale and leaseback agreement, with the aim of providing other “real estate solutions” to Club Med in other African countries.

“The addition of Club Med as a tenant consolidates the existing list of strong hotel counterparties the company works with in the hospitality sector.”

As part of the agreement, Club Med will renovate part of the hotel and expand it at a development cost to Grit of between €25m and €28m, Grit said. Club Med is also expected to operate an additional flight from Brussels to Dakar.

Grit said it will take no direct hospitality operating risk as the landlord.

“The property is being acquired at an attractive yield and will be on let on a new, long-term, 12-year lease to a strong tenant covenant,” said Grit CEO Bronwyn Corbett. “Club Med adds further high-quality tenant diversification to Grit’s current list of robust hotel operators.”