Grit Real Estate sells assets to its subsidiary GREA for US$100 million

LONDON, UK: Grit Real Estate Income Group Limited, a leading pan-African real estate company, announced today that it has sold its interests in Bora Africa and a diplomatic housing asset in Mozambique to its development subsidiary, Gateway Real Estate Africa (GREA).

The deal, which is subject to shareholder approval, will raise US$100 million for Grit, which will use the funds to invest in new equity in GREA and reduce its debt. GREA, which is co-owned by Grit and the Public Investment Corporation of South Africa, will use the funds to develop new industrial and logistics assets and expand its diplomatic housing portfolio.

The transaction is considered a related party transaction under the Listing Rules and a Class 2 transaction. A circular with more details will be sent to shareholders today and posted on the company’s website.

Grit will retain a 5% stake in the diplomatic housing asset, while GREA will take over a 99.9% stake in Bora Africa and a 48.5% stake in the diplomatic housing asset. The valuation of the assets is based on independent appraisals and audited net asset values as of 30 June 2023.

The transaction will not affect the Group’s net asset value, as GREA’s results will be consolidated with Grit’s from 30 November 2023. The gross assets involved in the transaction are worth US$150.9 million. No key personnel changes are expected as a result of the deal.

Bronwyn Knight, CEO of Grit, commented: “The disposal of properties at or close to book value achieves the Board’s strategy of additional asset recycling and further reinforces the Group’s audited net asset value at 30 June 2023.

By concluding the GREA Capital Raise with these proceeds, the Group (including GREA) receives a cash injection of US$48.5 million from the PIC’s subscription at NAV.

This equity will be invested by GREA into further development projects that are expected to meaningfully contribute to ESG impact, accelerated NAV growth and fee income generation to the Group as is contemplated under the Grit 2.0 strategy.”

Grit Real Estate acquires controlling stakes in GREA and APDM

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