Grit Real Estate Income Group has secured funding to conclude the acquisition and redevelopment of the Orbit Africa warehousing and manufacturing facility in Nairobi, on a sale and leaseback basis.
The Kshs. 5 billion light industrial warehouse acquisition will be settled through a Kshs. 2.5 billion in senior debt finance negotiated with the International Finance Corporation (IFC) and another Kshs. 2.5 billion through a perpetual note issuance.
According to contractual documents on the Grit transaction, the deal is structured on a sale and leaseback basis, meaning Orbit Products Africa will sell and then lease back the facility from Grit for over 25 years, with an option to extend it for another 10 years.
GRIT CEO Bronwyn Knight noted that the investment and redevelopment project will create a long-lasting social, economic, and environmental benefits for investor.
Olaf Schmidt, IFC’s Manager for real estate, says the loan will help to further develop vital manufacturing infrastructure in Kenya.
Sachen Chandaria, Executive Director of OPAL added that the strategic partnership with Grit will help Orbit expand operations and product offering.
The real estate commercial office sector recorded average rental yields decline of 6.9% from 7% recorded in 2020, and 0.3% points decline from 7.2% recorded in third quarter of 2020 according to statistics by Centum Investments.