fy2019 results presentation - grit · 2020. 1. 29. · sectoral split (fy2019)1 retail office...
TRANSCRIPT
FY2019 Results Presentation
FOR THE YEAR ENDED 30 JUNE 2019
Ι 2
BRONWYN CORBETTChief Executive OfficerBCom (Acc), CA(SA)
LEON VAN DE MOORTELEChief Finance OfficerBcompt (Hons), CA(SA)
Proceedings
Introduction
Highlights
Portfolio Overview
Outlook
Q&A
Annexures
Financial Review
Ι 3
Grit is a leading pan-African (ex South Africa) real estate company focused on investing in and actively managing a diversified portfolio of assets
underpinned by predominantly US$ and Euro long-term leases with high quality multi-national tenants
Grit has a full suite of on-the-ground capabilities and has a proven ability to generate attractive African returns for a sound risk profile given the quality
of tenants and security of cash flows
Ι 4
Evolution of the Grit Group Strategy
Targeted 12% US$ total return* including secure and growing distributions underpinned by high quality hard currency leases and contracted rental escalations
PROPERTY INVESTMENT
PROPERTY DEVELOPMENTUp to 20% of GAV** exposed to a combination of risk mitigated development pre funding strategies and equity exposure in Gateway Delta where pre and post funding strategies are expected to unlock significant potential for NAV growth. The Company will seek to mitigate any delivery risk through strategic partnerships and strong commercial agreements where the risk is transferred to third parties.
ASSET MANAGEMENT & CO-INVESTMENTOpportunities to co invest into direct real estate portfolios.Asset Management fees charged on full asset value.
A leading Pan-African (ex South Africa) real estate group focused on identifying, unlocking and delivering superior returns by focusing on three primary areas to achieve this:
* This is a target only and not a profit forecast and there can be no assurance that it 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.
** Measured at the time of investment.
Ι 5
De-risked African Investment Strategy
Marginsof
Safety
01Repatriation
of funds
Political risk& macro-
economics
Land tenureAbility to raise debt
Counterparty
02 03
04 05 06Hard currency
relationships• Multi-bank strategy• Supportive anchor shareholders• Ability to access pipeline• Blue-chip multinational tenants
quality portfolio• Geographic & sector diversification• Low vacancy & long-term leases • Target 50% in investment grade countries• In-country asset & property management
risk mitigants• Sustainable hard currency income • Political Risk Insurance• Margins of safety • Proven ability to raise capital
talented people• Internal, strong & experienced executive
management• High quality new hires• Continuous staff development
v
02 03
Ι 6
37.7%
21.9%
13.9%
15.6%
6.8%
3.8%
Geographic Split (FY2019)1
Mozambique
Mauritius*
Morocco*
Zambia
Ghana
Kenya
Botswana*
34.5%
26.0%
20.0%
15.2%
3.5%
Sectoral Split (FY2019)1
Retail OfficeHospitality Corp. AccommLight Industrial
PORTFOLIO HIGHLIGHTS
* as at 30 June 2019
US$825.2massets2
93.6%Multinational
tenants
95.4%income hard
currency
97.1%EPRA
Occupancy
6.3 years
WALE/WAULT (by GLA)
2.8%weighted
average lease escalation
FINANCIAL HIGHLIGHTS
40.6%PROPERTY LTV
c8.5%current US$
dividend yield
6.44%WACD
12%US$ targeted total return
INVESTMENT HIGHLIGHTS
Our High-quality TenantsGrit Real Estate Income Group at a glance
2 total income-producing assets
1 Split by Asset Value, Grit proportionate ownership
Ongoing sectoral & geographic diversification to optimisereturns & mitigate risk.
*36% of Grit’s portfolio is in Investment Grade African countries
Highlights
Ι 8
Total Shareholder Return from Portfolio Performance1
12.4%
FY2019 Highlights (as at 30 June 2019)
Robust financial and operational performance
Weighted Ave. Annualised Lease
Escalation8
Net Property Income growth4Dividend Yield3
SEM – 8.8%JSE – 9.6%LSE – 8.8%
EPRA NAV2
Property LTV5 Leasing Activity6
New 5 year lease with Exxon Mobil, new 10 year
lease with Anadarko
Hard Currency7
6. 91.4% of expiring GLA renewed / re-leased over the 12 month period
2. EPRA NAV excludes deferred tax on Property
3. Based on dividend of US$12.20cps, 30 June 2019 exchange rates and share prices on the respective exchanges
5. Excluding corporate facilities 8. Driven by movements in CPI and PPI
4. US$32.318m (FY2019) vs. US$25.653m (FY2018)
1. Portfolio Performance excludes Corporate activity costs in relation to the LSE listing in July 2018
7. Hard or pegged currency rental income
US$1.471
FY2018: US$1.457
+25.97%
FY2018: +52.4%
40.6%
FY2018: 43.7%
95.4%
FY2018: 93.0%
2.8%
FY2018: 3.1%
Ι 9
Peer PerformanceTarget of 12% total USD return for Grit for FY20
3.9 3.9 3.74.1
8.7
9.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
Global Americas AsiaPacific Europe Middle East Africa GRIT
Dividend Yield (%)
2015 2016 2017 2018 2019
Grit
Source: National Association of Real Estate Investment Trusts (as at 04 September 2019) - Returns in USD terms
Global Americas Asia/Pacific Europe Middle East /Africa
Grit dividend yield calculated using USD-equivalent SEM price as at 30 August 2019. * Based on last issue price of US$1.43.
Ι 10
Execution of Strategy
We Said We Delivered What’s Next
Finance targeted acquisitions (US$73M)
Listing proceeds successfully deployed, GIPAV US$825M+
c. US$470M Pipeline identified for near-term conversion
Grit strategy is resilient to challenging country macros
Uninterrupted collections & increased recent leasing activity
Balanced focus on existing geographies, key accounts and
new opportunities
Reduce group level gearing (51%) Group LTV currently 43%Target medium term LTV
c.35-40%
Pursue Standard Listing on Main Market of the LSE
First Pan-African Real Estate company to list on the LSE
Well positioned for Premium Listing in 2020
Target a growing dividend distribution > 8% yield
Delivered 11th annual US$ distribution (>8.5% yield)
Targeting faster NAV growth (12% total return)
Portfolio Overview
Ι 12
Asset Value Update
• Gross Income Producing Asset Value
• US$825.23 million (+28.5%)
• Acquisitions completed:
• Acacia Estate (Mozambique) Aug 18
• CADS II (Ghana) Sep 18
• 5th Avenue (Ghana) Dec 18
• Additional 25% shareholding in Mukuba Mall
(Zambia) Mar 2019
• 20 additional units at VDE Corporate
Accommodation Compound including
remaining 15.5 hectares of land for
development (Mozambique) Jun 2019
1. Includes post period end (PPE) acquisitions2. FY17 includes restated figures as per financials3. Includes property loans receivable
210.4
296.7
490.4
696.8
825.23
0
100
200
300
400
500
600
700
800
900
FY15 FY16 FY17 FY18 + PPE FY19
US$
m
Gross Income Producing Asset Value3
2
1
Ι 13
34.5%
26.0%
20.0%
15.2%
3.5%
0.4% 0.4%
Sectoral Split (FY2019)1
Retail Office Hospitality
Corp. Accomm Light Industrial Property Held
Other Investment
Portfolio Characteristics Ongoing sectoral & geographic diversification to optimise returns & mitigate risk
37.7%
21.9%
13.9%
15.6%
6.8%
3.8%
0.4%
Geographic Split (FY2019)1
Mozambique Mauritius* Morocco*Zambia Ghana KenyaBotswana*
1 Split by Asset Value, Grit proportionate ownership
*36% of Grit’s portfolio is in Investment Grade African countries
Multinational Tenants1
93.6%
Hard Currency3
95.4%
Contracted Escalation2
2.8%
WALE4
6.3 years
1. Forbes 2000, Other Global & pan African tenant (by revenue)
2. Weighted average annual escalation
3. Hard or pegged currency rental income
4. Weighted Average Lease Expiry (by GLA)
EPRA Occupancy
97.1%
KEY METRICS
1 Split by Asset Value, Grit proportionate ownership
Ι 14
Portfolio Key Metrics – Geographic * at 30 June 2019
1. Value as at 30 June 2019 at Grit proportionate ownership. Portfolio value includes land values for Imperial Ph2 and Buffalo Mall Ph2.2. Based on EPRA cost to income ratio calculation methodology 3. Vacancy is measured as a percentage of Total Estimated Rental Value, excludes those units under rental guarantee4. Excluding corporate facilities
Morocco Mozambique Ghana Mauritius Kenya Zambia Botswana Total
Number of Properties/ Investments 1 9 3 5 3 3 1 25
Grit attributed Asset Value (USD '000) 1 106,148 287,841 51,824 167,096 28,899 118,750 3,100 763,657
Weighted Average Property Cap rate 7.8% 8.1% 8.5% 6.9% 7.8% 7.4% 7.6%
WALE *by GLA (years) 3.7 4.0 3.1 11.3 8.3 1.9 6.33
Weighted Average Lease Escalations (income) 3.3% 3.6% 3.3% 0.8% 3.6% 2.2% 2.8%
GRIT attributed Weighted Avg US$ Rental per m2 per month
$36.79 $26.06 $35.13 $13.77 $11.68 $19.32 $22.8
Full GLA (m2) 31,934 84,086 16,971 120,046 19,860 65,957 338,854
Grit attributed GLA (m2) 31,934 84,086 10,905 69,907 16,781 47,096 260,709
Operating cost to income ratio2 61.9% 21.8% 10.6% 3.1% 18.0% 16.9% 17.0%
EPRA Vacancies3 (%) 12.9% 1.4% 9.9% 0.3% 0.0% 0.2% 2.9%
Weighted average cost of property debt (%) 4.5% 8.5% 8.8% 4.0% 7.8% 6.6% 6.3%
Debt to Property Value4 (%) 42.4% 39.5% 38.5% 42.9% 38.0% 30.0% 40.6%
Ι 15
Portfolio Key Metrics – Sectoral * at 30 June 2019
1. Value as at 30 June 2019 at Grit proportionate ownership. Portfolio value includes land values for Imperial Ph2 and Buffalo Mall Ph2.2. Based on EPRA cost to income ratio calculation methodology 3. Vacancy is measured as a percentage of Total Estimated Rental Value, excludes those units under rental guarantee4. Excluding corporate facilities
Retail Office Light Industrial HospitalityCorporate
AccommodationHeld for
DevelopmentOther
InvestmentsTotal
Number of Properties/ Investments 7 8 2 4 2 1 1 25
Grit attributed Asset Value (USD '000) 1 263,379 198,471 26,973 152,784 115,700 3,250 3,100 763,657
Weighted Average Property Cap rate 7.5% 8.0% 8.6% 6.9% 8.4% - - 7.6%
WALE *by GLA (years) 2.9 4.5 5.9 11.5 4.5 - - 6.33
Weighted Average Lease Escalations (income) 2.6% 3.9% 3.0% 0.8% 3.2% - - 2.8%
GRIT attributed Weighted Avg US$ Rental per m2 per month
$24.49 $31.89 $10.60 $13.88 $23.43 - - $22.8
Full GLA (m2) 120,401 51,646 19,558 111,777 35,471 - - 338,854
Grit attributed GLA (m2) 98,462 45,580 19,558 61,638 35,471 -
- 260,709
Operating cost to income ratio2 36.0% 10.8% 3.6% 0.2% 20.0%-
- 17.0%
EPRA Vacancies3 (%) 4.8% 4.8% 0.0% 0.0% 0.0% - - 2.9%
Weighted average cost of property debt (%) 6.5% 8.0% 6.5% 4.0% 8.2% - - 6.3%
Debt to Property Value4 (%) 42.0% 44.1% 28.3% 42.2% 32.3% - - 40.6%
Ι 16
Rank1 Key Tenant Industry Income (% of Group Total) Tenant Grading Lease Covenant Lease Currency
1 Beachcomber Hospitality 11.8% Other Global Triple Net EUR
2 Anadarko Oil & Gas Exploration 8.5% Forbes 2000 Traditional USD
3 Vodacom Telecommunications 8.0% Forbes 2000 Double Net USD
4 Lux Tamassa Hospitality 6.8% Other Global Triple Net EUR
5 Vale Mining 6.0% Forbes 2000 Traditional USD
6 US Embassy Consular 5.0% Other Global Traditional USD
7 Shoprite Retail 3.3% Forbes 2000 Gross USD/ZMW
8 Tullow Ghana limited Oil & Gas Exploration 2.7% Other Global Traditional USD
9 Imperial Logistics Logistics 2.7% Pan African Triple Net USD
10 Game / Massmart Retail 2.4% Forbes 2000 Gross USD
11 Barclays Financial Services 2.0% Forbes 2000 Traditional USD/MUR
12 International Retail Morocco Retail 1.9% Other Global Traditional MAD
13 GCNET Communication 1.8% Other Global Traditional USD
14 Hollard Insurance 1.5% Other Global Traditional USD
15 Exxon Mobil Oil & Gas Exploration 1.4% Forbes 2000 Traditional USD
Total 65.8%
Top 15 Tenants (as at 30 June 2019)
Majority of portfolio income generated from strength of multinational tenancies
1. Ranked by income
Ι 17
Leasing Update – Key Tenants * At 30 June 2019
• New 5-year lease in Commodity House Phase 2 in Maputo, Mozambique• c.1873m2 office space lease while residual space in building (995m2) currently under active asset management
activity • Exxon Mobil granted first option on any further Grit controlled office space in Commodity House Phase 1 & 2
• Lease concluded with Vale whereby new 5-year term agreed for existing 102 corporate accommodation units and an additional newly developed 40 two-bedroom and 20 three-bedroom units has been concluded effective 1 June 2019
• New 10-year office lease resulting in an increase in GLA with Anadarko to 1910m2 in Commodity House Phase 1 building in Maputo, Mozambique
• Renewal secured pursuing an active asset management strategy and an exit of an existing local tenant
• VIP Spar (1780m2) introduced as anchor tenant in Zimpeto Square shopping mall.
• New five-year lease from 1 April 2019• Concessions on rental rate in favour of higher quality
tenant
• New Macau Casino (947m2) introduced to Mall de Teteon 1 April 2019 on a new five-year lease
• In line with the Group’s strategy of increasing entertainment and service offerings in similar centres
Ι 18
Portfolio Highlight: Morocco
Anfa Place Mall
• Significant redevelopment of the Company’s flagship retail asset• Total capital cost of US$25.09 million (inclusive of VAT)• 30 June 2019 (pre-launch) valuation of US$106.1m – double-digit value uplift (+15% vs. Dec ‘18)• 30 June 2019 (pre-launch) vacancy of 12.9% – on-track for post-launch targeted vacancy of 9.4%• Successful relaunch on 12 September 2019, not fully reflected in current year valuations*
Key New Tenancies
Alpha 55 2144m2
Orchestra 433m2
Intimissimi 81.40m2
Kwaddro 263.2m2
BEFORE AFTER BEFORE AFTER
*Provides upside potential both from asset valuation and income generation prospects in future reporting periods
Financial Review
Ι 20
FY2019 Highlights (as at 30 June 2019)
Robust performance
Property cost to income6
Debt refinance4WACD3EPRA NAV growth2
Rental income growthNet Property Income
growthAdmin cost to Total
Asset Value5
Adjusted EPRA earnings1
2. EPRA NAV excludes deferred tax on Property
3. As a result of movements in LIBOR. Mozambique refinance expected to cause a decrease in the WACD to below 6.0%
6. EPRA cost ratio
4. On Mozambique portfolio, effective interest rate reduced by 1.14%
1. Includes adjustments for deferred tax, unrealised FX movements and straight line leasing adjustments
5. Medium term target of 0.8%
US$9.92 cps
FY2018: US$9.96 cps (-0.4%)
+1.0%
FY2019: US$1.471FY2018: US$1.457
6.44%
FY2018: 5.75%
US$140 million facility post year-end
+35.58%
FY2019: US$43,558FY2018: US$32,128
+25.97%
FY2019: US$32.318mFY2018: US$25.653m
1.7%
FY2018: 1.3%
17.0%
FY2018: 15.6% (+1.4%)
Ι 21
EPRA NAV Bridge – FY19
* EPRA NAV cum dividend
Corporate Activity Portfolio Performance
# Other non-cash items include non-distributable profits/(loss), non-controlling interest share in profit, movement in foreign currency translation reserve & treasury shares
Ι 22
Distributable Income
4.65
5.585.95 6.07
5.25
6.64
6.176.12 6.12 6.95
0
2
4
6
8
10
12
14
FY15 FY16 FY17 FY18 FY19
US$
Cen
ts p
er s
har
e (C
PS)
Interim Dividend Final Dividend
11.2911.75
12.07 12.19
30 June 2019US$’000
Basic Earnings attributable to the owners of the parent 28,035
Add Back non-cash items:
- Straight-line leasing (non-cash rental) & right of use amortization 853
- Total fair value adjustment on investment properties owned (15,637)
- Fair value adjustments included under income from associates (6,921)
- Fair value adjustment on other investments 1,846
- Unrealised foreign exchange gains or losses (non-cash) 5,162
- Fair value adjustment on other financial asset & instruments 527
- Share based payments 156
- Movement in deferred tax attributable to the owners of the parent 13,500
- Depreciation and amortization 311
Items added back
- Acquisition costs not capitalized 1,328
- Anfa costs capitalised 1,696
- LSE listing costs and reserve release 1,642
Other cash generation
- VAT and tax credits utilized 1,652
- Rental concessions for capital projects 503
TOTAL DISTRIBUTABLE EARNINGS 34,654
Distributable earnings per share (US$ cps) 12.20
Weighted average shares in issue (‘000) 284,077
Final Distribution declared per share US$6.95 cps
+4.1%+2.7% +1.0%
1. Includes special dividend for FY17
1
12.20
+0.1%
Ι 23
6.22%
5.78% 5.75%
6.44%
5.0%
5.4%
5.8%
6.2%
6.6%
7.0%
FY16 FY17 FY18 FY19 PostFY19
Key Financial Metrics
41.9%
38.8%
43.7%
40.6%
36.0%
37.0%
38.0%
39.0%
40.0%
41.0%
42.0%
43.0%
44.0%
45.0%
FY16 FY17 FY18 FY19
1.61.8 2.1
2.6
0.0
1.0
2.0
3.0
FY16 FY17 FY18 FY19
22.9%28.4%
15.6% 17.0%
0.0%
10.0%
20.0%
30.0%
FY16 FY17 FY18 FY19
1.6% 1.5%1.3%
1.7%
0.0%
0.5%
1.0%
1.5%
2.0%
FY16 FY17 FY18 FY19
Inte
rest
Co
ver
Op
ex
to In
com
e in
cl.
asso
ciat
es
Ad
min
co
st t
o A
sse
t va
lue
WEIGHTED AVE. COST OF DEBTKEY RATIOSPROPERTY LOAN TO VALUE
NET EUR EXPOSURE
21.7
43.954.9
62.3
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
FY16 FY17 FY18 FY19
EUR
(‘0
00
s)
1. Represents new targeted WACD post Mozambique refinance in Sept ’19
1
Ι 24
Debt Financing Overview
13.0%
14.4%
28.2%
36.7%
DEBT EXPIRY PROFILE (FY2019) MULTI BANK STRATEGY (FY2019)
45.1
32.6
11.1
25.4 27.2
13.9
30.1
0.4
17.0
76.4 69.4
-
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
Jun 2019 Sep2019
Oct 2019 Mar2020
May2020
Dec2020
May2021
Sep2021
Feb2022
Apr 2022 PostJune2022
US$
(‘0
00
s)
(Corporate facility)
DEBT EXPIRY PROFILE (POST-REFINANCE)
45.1
30.1
0.4 11.1
17.0 25.4
76.4
143.1
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
Jun 2019 May 2021 Sep 2021 Oct 2021 Feb 2022 Mar 2022 Apr 2022 Post June2022
US$
(‘0
00
s)
Currently being refinanced
<5.0%
POST BALANCE SHEET EVENT
• Mozambique Syndication Refinance • US$140 million facility• WACD from 8.57% to 7.43% (-1.14%) • 4 year term • Investment drawdowns = US$100m• Future headroom for acquisitions = US$27m
Ι 25
GROUP
For the 12 months ended 30 June 201930 June 2019
(US$’m)30 June 2018
(US$’m)Movement
Gross rental income 43.6 32.1 35.6%
Straight-line rental income accrual -0.8 1.1 -174.2%
Revenue 42.7 33.2 28.6%
Property operating expenses -10.4 -7.6 37.3%
Net property income 32.3 25.7 26.0%
Other income 0.3 0.0 2944.4%
Administrative expenses (including corporate structuring costs) -15.3 -14.7 4.2%
Profit from operations 17.3 11.0 57.3%
Total fair value adjustment on investment properties 21.4 13.8 55.2%
Total other fair value adjustments -1.3 -0.9 53.1%
Impairment of loan / financial asset -1.1 - -
Share-based payment expense -0.2 -0.3 -44.7%
Share of profits from associates 20.6 21.0 -2.3%
Foreign currency (losses) / gains -1.4 1.1 -224.0%
Profit before interest and taxation 55.3 45.8 20.8%
Interest income 7.9 4.4 80.5%
Finance costs -23.7 -19.7 20.7%
Profit for the period before tax 39.5 30.5 29.5%
Taxation -13.4 -4.8 182.3%
Profit for the period after tax 26.1 25.7 1.3%
Non controlling interests 1.9 2.9 -34.5%
Profit attributable to Equity Shareholders 28.0 28.6 -2.1%
Statement of Comprehensive Income
Ι 26
INCOME PRODUCING ASSETS
As at 30 June 201930 June 2019
(US$’m)30 June 2018
(US$’m)30 June 2019
(US$’m)31 Dec 2018
(US$’m)Movement
Assets
Non-current assets
Investment properties 573.7 383.1 573.7 383.1 49.8%
Deposits paid on investment properties 8.5 11.1 8.5 11.1 -23.4%
Other investments 3.0 4.2 3.0 4.2 -28.6%
Investments in associates 150.6 165.3 183.8 201.3 -8.7%
Other loans receivable 29.2 42.9 29.2 42.1 -30.6%
Related Party Loans Receivable 25.3 0.1 23.8 - 100%
Other non-current assets 23.2 12.0 0.7 0.5 40%
Total non-current assets 813.6 618.6 822.7 642.3 28.1%
Total current assets 50.3 32.9 2.5 - 100.0%
Total assets 863.9 651.6 825.2 642.3 28.5%
Equity and liabilities
Total equity attributable to ordinary shareholders
Ordinary share capital 443.3 328.4
Treasury shares reserve -18.4 -14.8
Reserves & Retained earnings -34.9 -34.2
Equity attributable to owners of the Company 389.9 279.4
Non-Controlling interests 4.6 -3.9
Total equity 394.5 275.4
Liabilities
Non-current liabilities
Redeemable preference shares 12.8 12.8
Interest-bearing borrowings 174.2 207.1
Other non-current liabilities 54.2 20.9
Total non-current liabilities 241.2 240.9
Current liabilities
Interest-bearing borrowings 171.9 99.0
Other current liabilities 56.3 36.2
Total current liabilities 228.2 135.3
Total liabilities 469.3 376.1
Total equity and liabilities 863.9 651.6
Condensed Statement of Financial Position
Outlook
Ι 28
SummaryKey Takeaways
Pipeline
Extensive pipeline of over US$470m1 of near-
term opportunities
Existing Portfolio
Performing Stronglyand expected to continue in
FY2020
Progressive Dividend Policy
11consecutive distribution
payments made
Listing Structure
Premium Listingintended in 2020, Secondary listing on JSE once complete
Economies of Scale
In-country expertise potential to leverage existing
infrastructure
1. These are targets only and are not guaranteed. These targets are based on a number of bases and assumptions which may or may not materialize.
Robust Platform
Substantial investmentin market-leading team and
platform
Ι 29
Pipeline CharacteristicsIdentified near term acquisition targets valued at c. US$ 470 million spread across multiple sectors with existing and new global tenants
4%
26%
15%
20%
35%
0%
8%
23%
15%
29%
22%
3%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
Industrial Office Corporate Accommodation Hospitality Retail Specialised
Sector Exposure (%)
Existing Existing + Target Acquisitions
Ι 30
Medium Term Policies & GuidanceGroup focus areas
Development exposures
Up to 20% of Group GAV
at the time of investment
Payout RatioDividends
Progressive Dividend Policy
Target Total Return Focus
12%¹Minimum with the potential for
incremental development returns over medium term
Share Buyback policy
Up to 4.9% of issued share capital
LTV target
Between 35% and 40%
1. These are targets only and are not guaranteed. These targets are based on a number of bases and assumptions which may or may not materialize.
Target a reduced ratio to below 90% over the
medium term
ANNEXURES
Ι 32
3. Income guarantee from Developer1. Value presented proportional to ownership interest held, 100% GLA reported2. Vacancy Rates as at 30 June 2019
Property Portfolio
Location Maputo
Anchor tenant
Global Oil & Gas Corporate
Sector Office
Land title Freehold (50+50)
GLA1 7 528m2
EPRA
Vacancy ²0.0%
Valuation1 US$46.2m
Commodity House Phase 1
Location Maputo
Anchor tenant
Exxon Mobil
Sector Office
Land title Freehold (50+50)
GLA1 3 168m2
EPRA
Vacancy ²0.0%3
Valuation1 US$17.2m
Commodity House Phase 2
Location Tete
Anchor tenants
Shoprite, Jet, Pep
Sector Retail
Land title Freehold
GLA1 11 581m2
EPRA Vacancy ²
0.0%3
Valuation1 US$25.4m
Mall de Tete
Location Maputo
Anchor tenant
KPMG, Hollard & BP
Sector Office
Land title Freehold (50+50)
GLA1 5 051m2
EPRA
Vacancy ²6.2%
Valuation1 US$20.8m
Hollard Building
Location Maputo
Anchor tenant
Vodacom
Sector Office
Land title Freehold (50+50)
GLA1 10 659m2
EPRA
Vacancy ²0.0%
Valuation1 US$48.1m
Vodacom Building
Location Pemba
Anchor tenant
Bollore Africa Logistics
Sector Light industrial
Land title Freehold
GLA1 5 856m2
EPRA
Vacancy ²0.0%
Valuation1 US$6.8m
Bollore
Ι 33
Property Portfolio
Location Tete
Anchor tenants
Vale & Barloworld
Sector Corp. Accomm
Land title Freehold
GLA1 17 071m2
EPRA
Vacancy ²0.0%
Valuation1 US$49.9m
VDE Housing Estate
Location Grand Baie
Anchor tenant
Beachcomber
Sector Hospitality
Land title Leasehold
GLA1/No of. rooms
23 266m2
(238 rooms)
EPRA
Vacancy ²0.0%
Valuation¹ US$26.8m
Mauricia Resort & Spa (44.4% ownership)
Location Pointe aux Canonniers
Anchor tenant
Beachcomber
Sector Hospitality
Land title Leasehold
GLA1/No of. rooms
25 248m2
(284 rooms)
EPRA
Vacancy ²0.0%
Valuation¹ US$32.4m
Canonnier Resort & Spa (44.4% ownership)
Location Maputo
Anchor tenant
VIP Spar
Sector Retail
Land title Freehold (50+50)
GLA1 4 771m2
EPRA
Vacancy ²30.4%
Valuation1 US$7.6m
Zimpeto Square
Location Maputo
Anchor tenant
US State Department
Sector Corp. Accomm
Land title Leasehold
GLA1 18 400m2
EPRA Vacancy ²
0.0%
Valuation3 US$65.8m
Acacia Estate (80.1% ownership*)
LocationPointe Aux Piments
Anchor tenant:
Beachcomber
Sector Hospitality
Land title Leasehold
GLA1/No of. rooms
41 696m2
(294 rooms)
EPRA
Vacancy ²0.0%
Valuation¹ US$39.5m
Victoria Resort & Spa (44.4% ownership)
3. Income guarantee from Developer1. Value presented proportional to ownership interest held, 100% GLA reported2. Vacancy Rates as at 30 June 2019
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Property Portfolio
Location Bel Ombre
Anchor tenant
Lux Island Resorts
Sector Hospitality
Land title Leasehold
GLA1/No of. rooms
21 567m2
(214 rooms)
EPRA
Vacancy ²0.0%
Valuation1 US$54.1m
Tamassa Resort
Location Kitwe
Anchor tenant
Shoprite, Game, Pick n Pay
Sector Retail
Land title Leasehold
GLA1 28 236m2
(100%)
EPRA Vacancy ²
0.4%
Valuation3 US$69.1m
Mukuba Mall (75% ownership*)
Location Naivasha
Anchor tenant
Tuskys
Sector Retail
Land title Leasehold
GLA1 6 158m2 (100%)
EPRA Vacancy ²
1.4%
Valuation1 US$5.4m
Buffalo Mall (50% ownership*)
Location Ebene
Anchor tenant
Barclays Bank
Sector Office
Land title Leasehold
GLA1: 8 269m2
EPRA Vacancy ²
4.6%
Valuation1 US$14.3m
Barclays House
Location Ndola
Anchor tenant
Shoprite
Sector Retail
Land title Leasehold
GLA1 11 923m2 (100%)
EPRA Vacancy ²
0.1%
Valuation¹ US$12.3m
Kafubu Mall (50% ownership*)
Location Lusaka
Anchor tenant
Shoprite, Game
Sector Retail
Land title Leasehold
GLA1 25 798m2 (100%)
EPRA Vacancy ²
0.0%
Valuation¹ US$37.4m
Cosmopolitan Mall (50% ownership*)
3. Income guarantee from Developer1. Value presented proportional to ownership interest held, 100% GLA reported2. Vacancy Rates as at 30 June 2019
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Property Portfolio
Location Nairobi
Anchor tenant
Imperial Health Sciences
Sector Light Industrial
Land title Leasehold
GLA1 13 702m2
EPRA Vacancy ²
0.0%
Valuation1 US$23.5m
Imperial Phase 1
Location Accra
Anchor tenant
Tullow Oil
Sector Offices
Land title Leasehold
GLA1 7 262m2 (100%)
EPRAVacancy ²
0.0%
Valuation1 US$18.2m
CADS II Building (50% ownership*)
LocationCasablanca,Morocco
Anchor tenants
Carrefour, M&S, H&M, LC Waikiki
Sector Retail
Land titleFreehold
GLA1 31 934m2
EPRA Vacancy ²
12.9%
Valuation1 US$106.1m
Anfa Mall
Location Accra
Anchor tenants
Hollard
Sector Offices
Land title Leasehold
GLA1 4 639m2
EPRA Vacancy ²
26.0%
Valuation¹ US$11.7m ¹
Capital Place (47.5% ownership*)
Location Accra
Anchor tenant
IT PPP
Sector Offices
Land title Leasehold
GLA1: 5 070m2
EPRA Vacancy ²
8.3%
Valuation1 US$21.9m
5th Avenue Corporate Offices
3. Income guarantee from Developer1. Value presented proportional to ownership interest held, 100% GLA reported2. Vacancy Rates as at 30 June 2019
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Acquisition Timeline
Ι 37
Bronwyn Corbett
Chief Executive Officer
& Co-founder
B.Comm (Acc) (Univ. of Natal, PMB), CA(SA)
Bronwyn is a founding member and CEO of Grit Real Estate Income Group, the largest pan-African focused realestate group listed on the LSE, JSE and SEM (stock exchanges in London (UK), Johannesburg (South Africa) and PortLouis (Mauritius) respectively). Bronwyn has over 14 years’ experience in the real estate investment sector. Sheworked in a real estate investment firm for 4 years as Financial Director before joining Motseng InvestmentHoldings in April 2009 as CFO. Together with the CEO, she was instrumental in growing the company’s direct realestate exposure to ZAR2 billion within 3 years, before listing the portfolio on the JSE as Delta Property Fund –where she held the positions of CFO and CIO. Bronwyn was part of the executive team that grew Delta PropertyFund to a portfolio valued at ZAR12 billion in 4 years and converted the structure to a REIT. In 2014, she co-founded Delta International Property where she was appointed CEO. Under Bronwyn’s leadership, Grit hasconsistently achieved Dollar-based distribution exceeding 7%. She has driven the growth of the portfolio fromUS$140 million and two assets, to c.US$800 million and 25 assets across seven jurisdictions.
Leon van de Moortele
Chief Finance Officer
BCompt (Hons), CA(SA)
Leon joined Grit in April 2015 as CFO, where he has utilised his tax structuring knowledge and experience inoperating in Africa to expand the asset base of the group. After completing articles with PwC, Leon moved to theGlobal Risk Management Services within PwC, where he become the Senior Manager in charge of DataManagement. In 2004, he moved to Solenta Aviation where he became Group Finance Director within 18 months.During his tenure as Group Finance Director, the group expanded from 12 aircraft to 48 aircraft, operating in 8African countries (South Africa, Mozambique, Algeria, Ghana, Gabon, Kenya, Tanzania and Cote d’Ivoire).
Executive Members of the Board
Ι 38
Non-Executive Members of the Board
Peter Todd
Independent Non-Executive Chairman
Other Listed Directorships: 1
Appointed to the board on
14 August 2014
Appointed as chairman on 12 April 2018
Peter is a qualified attorney and began his career as the senior tax manager at Arthur Andersen and Associates inJohannesburg. He joined TWS Rubin Ferguson in 1993 as a tax partner and was instrumental in listing severalcompanies on the JSE.
In 2000, Peter established Osiris Group in the British Virgin Islands and Mauritius to provide internationalcorporate finance and administrative services to global clients. Peter has significant understanding of the propertyindustry in the UK, South Africa and the rest of Africa.
Ian Macleod
Senior Independent Non-Executive Director
Other Listed Directorships: 2
Appointed to the board on
30 June 2015
Ian holds a BCom (Honours) in Real Estate Investment, Valuation and Development and has over 46 years ofexperience with financial institutions, including Standard Bank of South Africa and Nedbank with a specific focuson Real Estate Credit Risk.
He has extensive knowledge of the real estate sector’s key role players, business sector and geographic nodes. Ianhas managed portfolios in excess of ZAR80 billion during changing economic cycles and managing problematicproperties in economic downturns. Ian is a former Head of Credit for Real Estate for Standard Bank South AfricaLimited.
Ι 39
Non-Executive Members of the Board
David Love
Independent Non-Executive Director
Other Listed Directorships: 0
Appointed to the board on
4 December 2018
David Love is a Fellow Chartered Accountant, qualifying with Deloitte, and holds a BCom and LLB (Hons First) inLand Law, Equity and Trusts. He has over 19 years’ experience in the real estate investment sector.
He has been instrumental in the completion of a number of high profile European real estate transactionsincluding the listing of Picton Property Income Limited on the LSE and the formation of a £1.4b UK PropertyAuthorised Investment Fund. David is currently the CFO of Knight Frank Investment Management.
Catherine McIlraith
Independent Non-Executive Director
Other Listed Directorships: 7
Appointed to the board on 24 November 2017
Catherine holds a Bachelor of Accountancy has been a member of the South African Institute of CharteredAccountants since 1992. She served her articles at Ernst & Young in Johannesburg and then joined the InvestmentBanking industry. Catherine has held senior positions at Ridge Corporate Finance, BoE NatWest and BoE MerchantBank in Johannesburg. In 2004 she joined Investec Bank Mauritius where she was Head of Banking until 2010.
Catherine held various independent non-executive board positions in Mauritius including AfrAsia Bank Ltd, LesGaz Industriels Ltd and The Mauritius Development Investment Trust Co Ltd. She has also been a member of theFinancial Reporting Council (FRC) and is a Fellow Member of the Mauritius Institute of Directors.
Ι 40
Non-Executive Members of the Board
Sir Samuel Esson Jonah, KBE, OSG
Independent Non-Executive Director
Other Listed Directorships: 1
Appointed to the board on
21 February 2019
Sir Samuel Jonah is one of Africa’s leading businessmen and internationally recognised as a leading businessexecutive. He obtained a Master’s degree in Management from Imperial College, London following which heworked for Ashanti Goldfields and became CEO of the company in 1986.
Sir Samuel Jonah was elected Foreign Member of the United States National Academy of Engineering in 2018.
An Honorary Knighthood was conferred on him by Her Majesty the Queen in 2003 and in 2006 he was awardedGhana’s highest national award, the Companion of the Order of the Star.
Nomfundo NomkosiNomzamo Radebe
Non-Executive Director
Other Listed Directorships: 1
Appointed to the board on 24 November 2017
Nomzamo Radebe is a qualified Chartered Accountant who has furthered her studies in real estate, with asuccessful career spanning over 20 years.
Nomzamo is the Chief Executive Officer of Excellerate Real Estate Services. She is a former Chief InvestmentOfficer of Pareto Limited, and prior to this, she worked as a Director and in the Sasol Group treasury unit as aTreasury Operations Manager. Nomzamo was awarded the IPM Business Leader of the year 2016 and the Five StarWoman award by the Women Property Network in 2009.
Ι 41
Non-Executive Members of the Board
Bright Laaka
Independent Non-Executive Director (Permanent Alternate)
Other Listed Directorships: 0
Appointed to the board on 29 November 2018
Bright has 16 years’ experience in Business Development, Sales and Marketing. He holds a BSc (Agric), MSCProduction Physiology and an MBA in Entrepreneurship.
Bright is the founder and CEO of Rural Development Alliance Group in South Africa. He is a member of the SABRICS Agribusiness, a technical advisory and business development working group, as well as Alpha AfricaFoundation, a non-profit organisation that primarily works in rural areas to improve the livelihood of communitymembers.
Bright is also a former New Business Development Manager for two multinational companies listed on the NewYork Stock Exchange.
This report has been prepared by Grit Real Estate Income Group Limited ("Grit" or the “Company”) solely for your information and should not be considered to be an offer or solicitation of an offer to buy or sell orsubscribe for any securities, financial instruments or any rights attaching to such securities or financial instruments. In particular, this report does not constitute an offer to sell, or the solicitation of an offer to acquire orsubscribe for, securities in any jurisdiction where such offer or solicitation is unlawful.
All information and statistics provided in this presentation relating to targeted acquisitions or post-targeted acquisitions status is predicated on information available to the Company at the time of printing of thispresentation. Such information may be subject to change depending on final negotiations and documentation related to such targeted acquisition.
None of the directors, officers or employees of Grit make any representation or warranty, express or implied, as to the accuracy or completeness of the information or opinions contained in this report.
This report is a summary only, and does not include all material information about Grit. This report contains certain statements which are, or may be deemed to be, 'forward-looking statements'. By their nature, theseforward-looking statements and the facts contained therein are subject to a number of known and unknown risks, uncertainties and contingencies, many of which are beyond Grit’s control or influence, and actualresults and events could differ materially from those currently being anticipated as reflected in such statements. These forward-looking statements speak only as of the date of this publication. Past performance shouldnot be taken as an indication or guarantee of future results and no representation or warranty, express or implied, is made regarding future performance. Except as required by any applicable law or regulation, theCompany expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this publication to reflect any change in Grit's expectations or anychange in events, conditions or circumstances on which any such statement is based. Accordingly, undue reliance should not be placed on any such forward-looking statements.
Forward-looking statements have not been reviewed by external auditors and are the responsibility of the Board of Directors of the Company.
All targets mentioned in this presentation are targets only and are not guaranteed. These targets are based on a number of bases and assumptions. which may or may not materialize and have not been assessed orvalidated by the auditors. Nothing in this presentation should be construed as a profit forecast.Nothing in this report should be viewed, or construed, as "advice", as that term is used in the South African Financial Markets Act, 2012, and/or Financial Advisory and Intermediary Services Act, 2002 and/or theequivalent legislation in the United Kingdom, United States of America or in the Republic of Mauritius.
Disclaimer
Thank YouGrit Real Estate Income Group
Reg. No. C128881
3rd floor, La Croisette Shopping Centre, Grand Baie 30517, Mauritius
Level 3, Alexander House, 35 Cybercity Ebene 72201, Mauritius
T +230 269 7090E [email protected]