Grit Real Estate Income Group Ltd. said that it aims to raise around $215.6 million via the issue of up to 414.6 million new shares through an open offer and share placing at a premium price. The pan-African real-estate company, which is listed in the U.K. and Mauritius, said that each share has been priced at 52 U.S. cents, which represents a premium of around 4% to the average closing price. The net proceeds will reduce the company’s debt and provide future capital for further expansion in its core and expanded business. The acquisition, an approval at the general meeting will provide investors with increased exposures to de-risked African real estate development returns. As a result of the expected improvement in group loan-to-value to less than 45%, the board will target the resumption of a fully covered dividend of between US$5 and 6 cents per share for the financial year ending 30 June 2022, equating to greater than 9.6% yield on the issue price.
GREA’s investment pipeline further provides strong potential for significant capital growth because of their higher yielding, pre-let, and fully funded development assets that are critical infrastructure to tenants and in strong and resilient sectors with higher barriers to entry. GREA does not develop speculatively but rather provides de-risked development solutions on the strength of tenant led real estate requirements. Post the implementation of the transaction, Grit will be ideally positioned to implement a debt consolidation strategy that is expected to result in lower cost and longer-term funding, as well as an acceleration of its asset recycling strategy that will reduce its exposure to retail assets on the continent.