TIDMGR1T
RNS Number : 6733I
Grit Real Estate Income Group
16 August 2021
GRIT REAL ESTATE INCOME GROUP LIMITED
(Registered in Guernsey)
(Registration number: 68739)
LSE share code: GR1T
SEM share code: DEL.N0000
ISIN: GG00BMDHST63
LEI: 21380084LCGHJRS8CN05
("Grit" or the "Company" and, together with its subsidiaries, the "Group" )
OPERATIONAL AND PORTFOLIO UPDATE TO 30 JUNE 2021
The board of directors (the "Board") of Grit Real Estate Income
Group Limited is pleased to provide the following operational and
portfolio update to 30 June 2021.
Bronwyn Knight, CEO of Grit Real Estate Income Group Limited,
commented:
"The Group is continuing to focus on further enhancing its
strong rent collections and delivering value from our proactive
tenant and asset management initiatives, despite the uncertainty
caused by Covid-19. This has resulted in improving the collection
rate for the six months to 30 June 2021 to 93.6%, from 91.4% at 31
December 2020, and reducing our portfolio vacancy rate to 5.3% at
30 June 2021, from 8.0% at 31 December 2020. We expect improved
leasing activity, particularly at the Group's retail assets, to
result in continued vacancy improvements over the remainder of
2021.
Our corporate accommodation, industrial and office sector assets
remain materially unaffected to date, which collectively represent
over 51% of Grit's economic interest in property assets at 31
December 2020.
We are encouraged to see Mauritian borders partially opened from
15 July 2021 with remaining border restrictions planned to be
lifted from 1 October 2021, upon which the island's hospitality
sector is expected to return to normal operations. Both of Grit's
Mauritian hospitality tenants have received strong government
support, including liquidity support, from the Mauritian Investment
Corporation, which is now supporting the resumption of lease
payments to Grit. Club Med has been granted lease concessions
pertaining to Cap Skirring, Senegal resort for the period 1 January
2021 to October 2021, upon which time the resort is expected to
reopen with the resumption of regular international flight arrivals
to Senegal.
The Board remains confident of delivering superior total returns
for our shareholders in the medium to longer term and is well
positioned to capitalise on the significant recovery potential
across its unique high-quality portfolio of properties leased to
multinational tenants with rents collected predominantly in US$,
Euro or pegged currencies. We also see significant further
potential value creation from the assets and development pipeline
within Gateway Real Estate Africa, in which Grit has an 19.98%
equity interest."
The Board expects to provide an update on its financials and
dividend guidance in early September 2021. Grit will publish its
annual results for the year ended 30 June 2021 on Friday, 15
October 2021. As a result of the extended impact of Covid-19,
timing of the recovery in property valuations across the portfolio
remains uncertain, with further weakness in retail sector
valuations expected for the year to 30 June 2021, although this is
expected to be tempered by the valuations across o ur corporate
accommodation, industrial and office sector assets, as well as our
increasing confidence in the outlook for the remainder of 2021 in
our hospital assets .
Resilient portfolio performing well
As at the 30 June 2021, the Group's high-quality property assets
have a weighted average lease expiry ("WALE") of 4.8 years (June
2020: 5.1 years), a weighted average contracted lease escalation of
3.7% p.a. (June 2020: 2.7% p.a.) and are underpinned by a wide
range of blue-chip multinational tenants across a variety of
sectors. Grit's property portfolio comprises a total of 54 assets
(including 26 properties held in Letlole La Rona in Botswana) with
rentals predominantly collected monthly, of which 92.7% are
collected in US$, Euro or pegged currencies.
Rent collection
-- 103.8% of Grit attributable contracted rental revenue
collected for the month of June 2021, improving the collection rate
for the six months to 30 June 2021 to 93.6% (to 31 December 2020:
91.4%).
-- For the financial year to June 2021, the Group has collected
92.5% of the value of its contracted rental revenue. Over this same
period, the Group has provided rent concessions, resulting in
reduced revenues of 5.6% and rent deferrals of a further 2.3% of
contracted rental revenue.
Total July 2020 to June
Office Retail Corp. Accom. Hospitality Light Industrial 2021
------------------------- ------- ------- ------------- ------------ ----------------- -------------------------
Contracted rent 100% 100% 100% 100% 100% 100%
Rent deferrals 0% (0.3%) 0% (11.2%) 0% (2.3%)
Rent concessions (2.3%) (8.9%) (5.5%) (6.5%) 0% (5.6%)
Expected collection rate
* 97.7% 90.8% 94.5% 82.3% 100% 92.1%
Actual Collection rate
(as % of contracted
rent) 100.0% 90.2% 99.2% 77.2% 100.3% 92.5%
Movement in debtors
balances (excl. agreed
deferrals) (2.7%) 0.6% (4.7%) 5.1% (0.3%) (0.4%)
------------------------- ------- ------- ------------- ------------ ----------------- -------------------------
* Expected collection value after adjusting for agreed rent
deferrals and rent concessions.
EPRA vacancy
The Group's vacancy rate reduced to 5.3% at 30 June 2021 (31
December 2020: 8.0%) predominantly as a result of two new leases to
Total in Commodity House Phase 1 and a number of leases signed in
AnfaPlace Mall ("AnfaPlace") and the three retail malls in
Zambia
T he retail segment still accounts for over 75% of the reported
Group vacancy, of which AnfaPlace is the predominant contributor.
Strong leasing activity is expected to result in continued vacancy
improvements over the remainder of 2021.
Office, corporate accommodation and light industrial sectors
Corporate accommodation, industrial and office sector assets,
which collectively represent over 51% of Grit's economic interest
in property assets at 31 December 2020, remain materially
unaffected to date.
Grit has experienced limited tenant turnover in its Ghanaian
office portfolio and continues to work with Vale in relation to
their corporate accommodation needs in relation to a possible
divestment of their mining operations in Mozambique.
Hospitality sector
Hospitality assets constituted 24.7% of Grit's economic interest
in property assets at 31 December 2020. The Company does not have
direct occupancy and operational cost exposure in the hospitality
sector as a result of its fully servicing triple net lease rental
contracts with international leisure operators.
-- Mauritian borders were partially opened from 15 July 2021 to
resort restricted tourist travel. The Mauritian government
announced that the remaining border restrictions are to be lifted
from 1 October 2021 upon which the island's hospitality sector is
expected to return to normal operations. Both of Grit's Mauritian
operators have received strong government support including
liquidity support from the Mauritian Investment Corporation, which
is now supporting the resumption of lease payments to Grit.
o The Lux Group are up to date on current rentals and have
repaid over c.50% of arrears (rent deferrals granted in 2020) in
respect of the Tamassa resort.
o The remaining three Mauritian hotels in Grit's portfolio are
tenanted to the New Mauritius Hotels Group (NMH), owned by a large
Mauritian conglomerate, who have resumed partial rental payments.
Grit has granted limited tenant support through:
-- Providing cashflow deferrals of c.50% of monthly rental
value, retrospectively applied for the period 1 December 2020 until
the earlier of, reopening of the Mauritian borders without major
restrictions or 1 December 2021. Such cashflow deferral will be
collected over the subsequent 48-month period.
-- Club Med have been granted lease concessions pertaining to
Cap Skirring, Senegal resort for the period 1 January 2021 to
October 2021 upon which time the resort is expected to reopen.
Retail sector
Retail assets constituted 22.9% of Grit's economic interest in
property assets at 31 December 2020 and are split between an
enclosed shopping mall in Morocco (AnfaPlace) and convenience
shopping and service orientated strip malls.
-- Grit has provided a combination of concessions and rent
deferrals to tenants in AnfaPlace in anticipation of the asset
returning to normalised levels of trade post the 2019 redevelopment
and the more recent Covid disruptions. Morocco has increasingly
lifted domestic restrictions resulting in encouraging Anfa footfall
statistics in May, June and July 2021, which are substantially
higher than 2020 comparatives and c.20% higher than pre 2019
redevelopment levels
-- Further progress on lease renewals in Mukuba Mall, Zambia
have been made after 88% of the leases expired in March 2020. As at
30 June 2021 the mall is 98.51% let.
-- Cosmo Mall (Lusaka, Zambia) and Mall de Tete (Tete,
Mozambique) continue to experience elevated levels of vacancies,
however the Group expects improved leasing activity through to 31
December 2021.
Gateway Real Estate Africa Developments
Through its 19.98% equity interest in Gateway Real Estate Africa
(" GREA"), the private African property development company
co-founded by Grit, the Group has a minority interest in and
exposure to GREA's accretive pipeline of development projects,
assets and returns and has access to its attractive completed
assets. Strong progress has been made by GREA in the 12 months to
30 June 2021, including:
-- OBO Ethiopia corporate accommodation: Near completion of a
112-unit diplomatic residential building predominantly tenanted to
OBO, a division of the US state department, which is now being
readied for occupation in mid-September 2021. Estimated total
project cost of c.US$54 million.
-- OBO Kenya diplomatic accommodation: The construction on a
90-unit diplomatic apartment and town house community predominantly
tenanted to OBO, a division of the US state department, commenced
at the end of 2020 with expected completion date in Q1 2022.
Estimated total project cost of c. US$48.5 million.
-- Metroplex Shopping Mall, Uganda: Redevelopment of the prime
13,000m2 gross lettable area ("GLA") shopping mall in a prime
location in Kampala in Uganda was completed in May 2021 at a cost
of US$19.9 million. The prime shopping mall is now anchored by
Carrefour and is positioned as a primary shopping destination,
dining and entertainment hub.
-- The Precinct, Mauritius: Commencement of a landmark c.10
000m2 GLA grade-A office development in Grand Baie in Q2 2021.
Targeted completion Q4 2022. Estimated total project cost of c.
US$31 million.
The Group sees significant further potential value creation from
the assets and development pipeline within GREA going forward.
By Order of the Board
16 August 2021
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU no. 596/2014) (as amended) as it forms part of UK
domestic law by virtue of the European union (withdrawal) act 2018
and other implementing measures. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Grit Real Estate Income Group Limited
Bronwyn Knight, Chief Executive Officer +230 269 7090
Darren Veenhuis, Chief Strategy Officer and Investor
Relations +44 779 512 3402
Maitland/AMO - Communications Adviser
James Benjamin +44 7747 113 930
Grit-maitland@maitland.co.uk
finnCap Ltd - UK Financial Adviser
William Marle / Teddy Whiley (Corporate Finance) +44 20 7220 5000
Mark Whitfeld / Pauline Tribe (Sales) +44 20 3772 4697
Monica Tepes (Research) +44 20 3772 4698
Perigeum Capital Ltd - SEM Authorised Representative
and Sponsor
Shamin A. Sookia +230 402 0894
Kesaven Moothoosamy +230 402 0898
Capital Markets Brokers Ltd - Sponsor Broker
Neetusha Aubeeluck +230 402 0285
NOTES:
Grit Real Estate Income Group Limited is the leading pan-African
real estate company focused on investing in and actively managing a
diversified portfolio of assets in carefully selected African
countries (excluding South Africa). These high-quality assets are
underpinned by predominantly US$ and Euro denominated long-term
leases with a wide range of blue-chip multi-national tenant
covenants across a diverse range of robust property sectors.
The Company is committed to delivering strong and sustainable
income for shareholders, with the potential for income and capital
growth. The Company is targeting net total shareholder return
inclusive of NAV growth of 12.0%+ p.a.*
The Company holds its primary listing on the Main Market of the
London Stock Exchange (LSE: GR1T and a secondary listing on the
Stock Exchange of Mauritius (SEM: DEL.N0000).
Further information on the Company is available at
http://grit.group/
* These are targets only and not a profit forecast and there can
be no assurance that they will be met. Any forward-looking
statements and the assumptions underlying such statements are the
responsibility of the Board of Directors and have not been reviewed
or reported on by the Company's external auditors.
Directors: Peter Todd+ (Chairman), Bronwyn Knight (Chief
Executive Officer)*, Leon van de Moortele (Chief Financial
Officer)*, David Love+, Sir Samuel Esson Jonah+, Nomzamo Radebe,
Catherine McIlraith+, Jonathan Crichton+, Cross Kgosidiile (+) and
Bright Laaka (Permanent Alternate Director to Nomzamo Radebe).
(* Executive Director) (+ independent Non-Executive
Director)
Company secretary : Intercontinental Fund Services Limited
Company secretary address : Level 5, Alexander House, 35
Cybercity, Ebene, 72201, Mauritius
Registered address : PO Box 186, Royal Chambers, St Julian's
Avenue, St Peter Port, Guernsey GY1 4HP
Registrar and transfer agent (Mauritius) : Intercontinental
Secretarial Services Limited
UK Transfer secretary : Link Asset Services Limited
Mauritian Sponsoring broker : Capital Markets Brokers Ltd
SEM authorised representative and sponsor : Perigeum Capital
Ltd
This notice is issued pursuant to the FCA Listing Rules and SEM
Listing Rule 15.24 and the Mauritian Securities Act 2005. The Board
of the Company accepts full responsibility for the accuracy of the
information contained in this communiqué.
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