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GRIT REAL ESTATE INCOME GROUP LIMITED - GRIT Announces Intention To Seek Listing On London Stock Exchange

Release Date: 17/07/2018 08:00
Code(s): GTR     PDF:  
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GRIT Announces Intention To Seek Listing On London Stock Exchange

GRIT REAL ESTATE INCOME GROUP LIMITED

(previously known as Mara Delta Property Holdings Limited)

(Registered by continuation in the Republic of Mauritius)

(Registration number: C128881 C1/GBL)

SEM share code: DEL.N0000

JSE share code: GTR

ISIN: MU0473N00036

(“Grit” or the “Company”)


NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, INTO THE UNITED
STATES, AUSTRALIA, CANADA OR JAPAN OR TO ANY NATIONAL, RESIDENT OR CITIZEN OF THE
UNITED STATES, AUSTRALIA, CANADA OR JAPAN

This announcement is an advertisement and does not constitute a prospectus for the purposes of
Section 85 of the Financial Services and Markets Act 2000 of the United Kingdom, as amended, or
for the purposes of the South African Companies Act and of the Mauritian Securities Act 2005 and
investors must only subscribe for or purchase any shares referred to in this announcement on the
basis of information contained in the Prospectus to be published by Grit Real Estate Income Group
Limited in due course and not in reliance on this announcement. When made generally available,
copies of the Prospectus may, subject to any applicable law, be obtained from the registered office
of the Company and from the Company's website www.grit.group.

17 July 2018

For Immediate Release                                                                         

           GRIT ANNOUNCES INTENTION TO SEEK LISTING ON LONDON STOCK EXCHANGE

Grit Real Estate Income Group Limited (“Grit” or “the Company” or together with its subsidiaries “the
Group”), a leading pan-African income real estate company focused on real estate investment assets
in pre-selected African countries (excluding South Africa), today announces its intention to seek a
listing on the Official List of the United Kingdom Listing Authority and admission to trading on the main
market for listed securities of the London Stock Exchange ("Admission"), in conjunction with an offer
for subscription in the UK and a private placement of its Ordinary Shares in the UK, South Africa and
Mauritius (together the "Issue").

Details of the Issue

    •    The Company will issue up to 250 million new Ordinary Shares pursuant to the Issue.

    •    The indicative price for the offer has been set at US$1.43 per Ordinary Share which is
         equivalent to the EPRA Net Asset Value1 per Ordinary Share of US$1.43 as at 31 March 2018.

1
 Net Asset Value calculated in accordance with the Best Practice Recommendations published by the European Public Real
Estate Association in January 2014.


    •    The Company’s 214 million existing Ordinary Shares currently trade on the main board of the
         Johannesburg Stock Exchange ("JSE") and the Official Market of the Stock Exchange of
         Mauritius Ltd ("SEM"). Application will be made to the UK Listing Authority for the Company’s
         existing and to be issued Ordinary Shares to be admitted to the Official List with a standard
         listing. Application will also be made for the existing and to be issued Ordinary Shares to be
         admitted to trading on the London Stock Exchange’s main market for listed securities.

    •    Applications will also be made for the Ordinary Shares to be issued pursuant to the Issue to
         be admitted to the main board for listed securities of the JSE and to the Official Market of the
         SEM.

    •    The Issue is expected to raise net proceeds of at least US$120 million. The net proceeds of the
         Issue will be used to acquire assets in Ghana and Mozambique, in addition to other existing
         and new territories, as well as reduce the Group’s overall level of gearing.

    •    Initial Admission of the Company’s Ordinary Shares to the London Stock Exchange is expected
         in July 2018.

    •    AXYS Corporate Advisory is acting as lead transaction adviser and Perigeum Capital is acting
         as the Mauritian transaction adviser. finnCap Limited is acting as UK financial adviser and joint
         UK placing agent. Baden Hill, a trading name of Northland Capital Partners Limited and Exotix
         Partners LLP are acting as joint UK placing agents. PSG Capital is acting as sponsor and placing
         agent in South Africa.

Commenting on today’s announcement, Bronwyn Corbett, Chief Executive Officer, said;

“Our planned listing on the London Stock Exchange will create a compelling opportunity for UK and
other equity investors to gain exposure to the African real estate sector, which offers some of the best
returns in the global property market. We have a proven track record of generating income from our
selective and diversified range of assets, built through our close and detailed understanding of the
region’s property investment environment. The listing will support our aim to grow our portfolio
further and become the leading real estate owner on the African continent outside South Africa.”

Key Grit Highlights

    •    A track record of returns and strong dividend yields
         - Grit is targeting a US Dollar total return of approximately 12.00% per annum2
         - Eight dividend distributions since its launch in 2014
         - Weighted average cost of debt of 5.7% as at 30 June 2018
         - The target dividend in relation to the six months ended 30 June 2018 is approximately
             US$5.9 cents per Share2
         - Rental income predominantly generated in US$ and Euros
         - Bulk of income paid out to shareholders as semi-annual dividends

2
 This is a target only and is not guaranteed. It is based on a number of bases and assumptions which may or may not
materialise.


       •   Strong focus on selected African countries with strong fundamentals and strength of
           counterparty
           - Economic growth in sub-Saharan Africa averages more than 5% per annum since 2000,
               driving rapid urbanisation and a growing middle class
           - Increased demand for modern properties from domestic and international businesses

       •   A selective portfolio of quality assets, diversified across sectors, jurisdictions and tenants
           - Currently present in seven African markets (Botswana, Kenya, Mauritius, Morocco,
               Mozambique, Ghana and Zambia)
           - Other markets targeted or under consideration include Senegal and the Seychelles
           - Grit has a self-imposed soft concentration limit of 25% of gross assets per operational
               jurisdiction. Diversified by sector with retail, office, hospitality, light industrial and
               corporate accommodation assets

       •   Experienced management with in-depth practical experience of the Company’s existing and
           targeted jurisdictions
           - Management with over 65 years combined African real estate experience
           - Key executives significantly invested in the Company
           - Robust processes in place and strong competency to manage the portfolio of properties

       •   A customer base of international tenants with long-term leases
           - Existing portfolio has a Weighted Average Lease Term of 7.0 years as at 30 June 2018
           - Core tenants include international blue-chip companies such as Vodacom (part of
               Vodafone Group), Barclays, KPMG, BP and the British Council, and leading South African
               retailers with pan-African operations such as Shoprite and Game
           - Current low vacancy rate of 2.8% as at 30 June 2018

       •   Significant pipeline of attractive developments and assets identified
           - Selective expansion into new jurisdictions will generate additional revenue flows from
               completed, high-quality assets and further diversification
           - Existing network of developers, property owners and tenants position the Company
               advantageously for emerging opportunities



For additional information, please contact

Grit                                                       +230 269 7090

Helet Lerner                                               +27 87 806 2723
Morné Reinders                                             +27 87 806 2723


Citigate Dewe Rogerson

Jos Bieneman                                               0207 282 1053
David Westover                                             0207 282 2886
Ellen Wilton                                               0207 282 2849

finnCap

William Marle                                              020 7220 0557
Scott Mathieson                                            020 7220 0568

PSG Capital

David Tosi                                                 +27 21 887 9602

Perigeum Capital

Shamin A. Sookia                                           +230 402 0890



NOTE TO EDITORS

About Grit

Grit is a leading pan-African real estate company focused on real estate investment assets in pre-
selected African countries (excluding South Africa), with these assets underpinned by predominantly
US$ and Euro denominated long-term leases with high quality tenants delivering strong and
sustainable income.

The Company was incorporated in 2012 and currently has a dual primary listing on the Official Market
of the Stock Exchange of Mauritius Ltd and the main board of the Johannesburg Stock Exchange. Since
listing on the Johannesburg Stock Exchange in 2014, Grit’s assets have increased from two properties
to 20 properties and the Company is the first dual listed pan-African real estate group of its kind.

Grit’s current portfolio comprises 20 income producing properties in six countries (plus one vacant
land plot held for development and a 6.25% equity investment in a listed Botswana property group)
with, as at 30 June 2018:

•         an aggregate valuation of approximately US$588.5 million and an estimated property net
          initial yield of 8.1%;
•         308,105m² of gross lettable space;
•         a vacancy rate of 2.8%, largely due to the impact of strategic vacancies resulting from a major
          refurbishment project at Anfa Place Shopping Center in Morocco. Vacancies across the
          remaining assets remain negligible; and
•         a weighted average lease expiry of 7.0 years.

Within the next five years, Grit is aiming to become the leading real estate owner on the African
continent outside of South Africa, focusing on income-producing assets with strong counterparties to
seek to ensure consistent growth of Shareholder value.

Grit's investment strategy is built around the following core principles:
    •    to grow the portfolio based on quality hard currency long-term leases and strong
         counterparties;
    •    to focus on countries with existing/pending REIT structures; and
    •    to develop and maintain strategic partnerships in existing jurisdictions that will secure pipeline
         and strengthen in-country resources.

Grit seeks opportunities in high-yielding properties in sound African jurisdictions that are anchored
by high quality tenants. Grit considers key criteria such as the ability to conduct business in hard
currency, repatriation of funds, political risk, currency risk, secure land tenure and debt raising ability
in the first instance before proceeding further with any investment opportunity.

Important notice

The content of this announcement, which has been prepared by and is the sole responsibility of the Company,
has been approved by finnCap Limited (“finnCap”) solely for the purposes of section 21(2)(b) of the Financial
Services and Markets Act 2000 (as amended) ("FSMA").

This announcement is an advertisement and does not constitute a prospectus and investors must only
subscribe for or purchase any shares referred to in this announcement on the basis of information contained
in the Prospectus to be published by the Company in due course and not in reliance on this announcement.
When made generally available, copies of the Prospectus may, subject to any applicable law, be obtained from
the registered office of the Company. This announcement does not constitute and may not be construed as, an
offer to sell or an invitation to purchase, investments of any description, a recommendation regarding the Issue
or the provision of investment advice by any party. No information set out in this announcement or referred to
in other written or oral form is intended to form the basis of any contract of sale, investment decision or any
decision to purchase shares in the Company.

This announcement does not constitute a prospectus for the purposes of the South African Companies Act and
will not be filed with the South African Companies and Intellectual Property Commission in terms of the South
African Companies Act. This announcement has not been prepared in terms of the JSE Listings Requirements.
This announcement also does not constitute a prospectus for the purposes of the Mauritian Securities Act 2005
and will not be filed with the Mauritian Financial Services Commission in terms of the Mauritian Securities Act
2005. This announcement has not been prepared in terms of the SEM Listing Rules. The information contained
in this announcement is given at the date of its publication (unless otherwise marked) and is subject to updating,
revision and amendment when the Prospectus is published.

Each of finnCap, Baden Hill, a trading name of Northland Capital Partners Limited, ("Baden Hill") and Exotix
Partners LLP ("Exotix"), is authorised and regulated by the Financial Conduct Authority, is acting only for the
Company in connection with the matters described in this announcement and is not acting for or advising any
other person, or treating any other person as its client, in relation thereto and will not be responsible for
providing the regulatory protection afforded to clients of finnCap, Baden Hill or Exotix or advice to any other
person in relation to the matters contained herein.

PSG Capital, which is authorised and regulated in South Africa by the JSE, is acting exclusively for the Company
and for no-one else in connection with the in connection with the matters described in this announcement and
is not acting for or advising any other person, or treating any other person as its client, in relation thereto and
will not be responsible for providing the regulatory protection afforded to clients of PSG Capital or advice to any
other person in relation to the matters contained herein.
Perigeum Capital Ltd (“Perigeum Capital”), which is regulated in Mauritius by the Mauritian Financial Services
Commission, is acting exclusively for the Company and for no-one else in connection with the matters described
in this announcement and is not acting for or advising any other person, or treating any other person as its client,
in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of
Perigeum Capital or advice to any other person in relation to the matters contained herein.

The shares of the Company will be offered only outside of the United States, pursuant to the provisions of
Regulation S of the US Securities Act of 1933, as amended (the “US Securities Act”). These shares will not be
registered under the US Securities Act, and may not be offered or sold in the United States absent registration
or an applicable exemption from the registration requirements. Moreover, the shares of the Company have not
been, nor will they be, registered under the applicable securities laws of Australia, Canada or Japan. Further, the
Company will not be registered under the US Investment Company Act of 1940, as amended. Subject to certain
exceptions, the shares of the Company may not be offered or sold in the United States, Australia, Canada or
Japan or to, or for the account or benefit of, any national, resident or citizen of the United States, Australia,
Canada or Japan. The Issue, and the distribution of this announcement, in other jurisdictions may be restricted
by law and persons into whose possession this announcement comes should inform themselves about, and
observe, any such restrictions.

The value of investments may go down as well as up and all of the value of an investor's investment in the
Company will be at risk. Past performance is not a guide to future performance.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements".
These forward-looking statements can be identified by the use of forward-looking terminology, including the
terms “believes”, “estimates”, “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in each case,
their negative or other variations or comparable terminology. All statements other than statements of historical
facts included in this announcement, including, without limitation, those regarding the Company’s financial
position, strategy, plans, proposed acquisitions and objectives, are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future
financial results and operational performance may differ materially from the results and performance expressed
in, or implied by, the statements. These factors include but are not limited to those described in the Prospectus.
These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as
a guide to future performance. The Company, finnCap, Baden Hill, Exotix, PSG Capital and Perigeum Capital
expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained
herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such
statements are based unless required to do so by the FSMA, the Prospectus Rules of the Financial Conduct
Authority or other applicable laws, regulations or rules.

None of the Company, finnCap, Baden Hill, Exotix, PSG Capital, Perigeum Capital or any of their respective
affiliates, accepts any responsibility or liability whatsoever for or makes any representation or warranty, express
or implied, as to this announcement, including the truth, accuracy or completeness of the information in this
announcement (or whether any information has been omitted from the announcement) or any other
information relating to the Company or associated companies, whether written, oral or in a visual or electronic
form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the
announcement or its contents or otherwise arising in connection therewith. The Company, finnCap, Baden Hill,
Exotix, Perigeum Capital and PSG Capital, and their respective affiliates, accordingly disclaim all and any liability
whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement
or its contents or otherwise arising in connection therewith.

Sponsor: PSG Capital

Date: 17/07/2018 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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