Grit’s Step-Up to A Premium Listing Expected to Boost Both Business and Liquidity

  • February 23, 2021 10:43 AM GMT
  • Team Kalkine
Grit’s Step-Up to A Premium Listing Expected to Boost Both Business and Liquidity

Summary

  • Grit’s application for a step-up to a Premium Listing was accepted in January this year
  • Benefits of the Premium Listing will support its sustained growth and the creation of stakeholder value in the long-term

 

Founded in 2012, Grit Real Estate Income Group has carved a niche for itself as a leading pan-African real estate company investing in and actively managing a diversified portfolio of 54 assets across five asset classes located in eight African countries.

Operations are diversified across tenants, sectors, and regions, spreading from Mozambique to Morocco and from Mauritius to Senegal.

A key differentiator for Grit is its focus on tenant strength, with 88.7% of the revenue earned from multinational corporates including Vodacom, Carrefour, Club Med, Exxon Mobil, BP, Tullow Oil, Lux Resorts, and the US Department of State’s Bureau of Overseas Building Operations. These leases provide a hard-currency underpin to the portfolio, as 93% of revenue is earned in either US$ or Euro (or pegged currencies), significantly reducing exchange rate volatility.

In 2018 Grit became the first pan-African group to list on the main market of the London Stock Exchange when it raised US$132 million in an initial public offering.

Continuously evolving 

Operating across multiple jurisdictions brings with it a particular set of corporate governance challenges. Numerous research articles point to companies with sound corporate governance principles attracting a premium from investors, especially so in emerging and frontier markets.

Since inception, Grit has prided itself on following due process, particularly when it comes to due diligence and establishing itself in a new territory as well as with the acquisition of assets. Apart from macro-economic considerations such as a viable, growing economy and political stability, other considerations would include currency risk, the ability to repatriate funds as well as the security of land tenure.

Grit’s investment model and governance structures were significantly tested during the Mozambican debt crisis of 2016, where the Company continued to operate and repatriate dividends without interruption.

As part of Grit’s ongoing corporate evolution, the Group set out in 2020 to apply for a step-up to a Premium Listing on the London Stock Exchange, one of the world’s most governed exchanges.

Issuers listed in the Premium Listing segment are obliged to meet the UK's top standards, which are higher than the EU minimum requirements. This offers investors with best-in-class corporate governance and protections.

The Company further believed that apart from greater governance assurance, a Premium Listing would support FTSE index inclusion and greater liquidity in its share over time.

Corporate domiciliation in Guernsey 

In January this year, Grit’s application for a step-up to a Premium Listing was accepted. This migration, coupled with the Group’s transfer to a Premium Listing represents an important step towards inclusion in the FTSE indices. In turn, this is expected to raise Grit’s profile with investors, improve liquidity in the Company’s shares and place Grit in an enhanced position to fund its accretive investment pipeline. 

Business benefits 

Grit’s elevated transparency in governance is expected to attract interest from a number of large multinational corporations, sovereign wealth funds and development funding institutions.

Collaboration could involve bespoke development of corporate accommodation, corporate offices, data centres, logistics and warehouse centres as well as healthcare clinics and hospitals. In other instances, Grit may partner with large multinationals wishing to unlock their balance sheets through sale and leaseback transactions.

The Company is also exploring a number of co-investment opportunities with sovereign wealth funds where Grit will provide asset management services in addition to being a part-investor in the asset.

Today Grit is proud to have made it to the Premium segment of the LSE and believes that the benefits of this listing will support its sustained growth and the creation of stakeholder value in the long-term. 

 

Ends.

 


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