It’s taken a loan, two additional financing partners and two years’ worth of discussions to make it possible. Grit CEO Bronwyn Knight. Image: Supplied Africa-focused property fund Grit Real Estate Income Group will be stretching its map of Africa after finally managing to secure funding to buy an Orbit Products Africa Limited (Opal) light industrial warehouse in Nairobi, Kenya for $53.6 million (about R796 million).
On Wednesday, Grit – which has listings in London and Mauritius – said an issuance of perpetual note from Ethos Mezzanine Partners GP and BluePeak Private Capital, and a loan from the International Finance Corporation (IFC), a member of the World Bank Group, will be financing the deal.
The perpetual note issuance could translate into as much as $31.5 million – of which $28.6 million will go towards the deal – while the IFC loan will add another $25 million towards the purchase.
“The funding arrangements mark an important step-change in Grit’s business by not only confirming Grit’s long-term partnership with the IFC, but also introducing two respected and well-established project finance partners to Grit,” Grit CEO Bronwyn Knight said in a statement.
“The perpetual note issuance is conditional upon certain remaining conditions precedent which are expected to be fulfilled in the near future,” the company stated.
Despite delisting from the JSE last year and having a presence in eight African countries, except South Africa, the company still has strong links to the country. Its largest South African shareholder is the Public Investment Corporation (PIC), which owns about 25%, followed by the Eskom Pension Fund, which owns about 5%.
Read: Grit still has strong SA links, despite JSE delisting
The purchase – which is on a leaseback basis – will tie the Mauritius-based property fund into long-term partnerships that will see it joined at the hip with not only Opal, but the IFC and its financing partners.
“This Orbit sale and leaseback transaction and facilities upgrade is indicative of the reliable, secure and attractive opportunities with robust prospects for long-term profitable growth that we are exploring on the continent,” Knight said. The deal will see the company acquire a manufacturing facility with gross lettable area of 29 243m 2 and a total land lot of 80 570m 2 . The warehouse will be leased back to Opal – a contract manufacturer for Colgate-Palmolive and Unilever – on a 25-year US-dollar-denominated triple net lease. Opal will have […]