Grit fund-raising ‘shows UK investors back Africa property’

Pan-African property fund Grit Real Estate has raised $132m on the eve of its debut on the main market of the London Stock Exchange (LSE).

This showed that British investors had a growing interest in African real estate, while South African interest has been subdued, Grit CEO Bronwyn Corbett said.

Corbett said she had chosen to pursue an LSE listing because she believed it would be easier to raise funds in the UK than in SA in 2018.

“Since we started it’s been difficult to attract South African investors. They saw Africa as a risky continent wherein to invest and did not look at African markets individually.

“Much of the investment that could have gone to Grit had been spent in other parts of the world, such as eastern Europe,” Corbett said.

The funds were raised from emerging and frontier markets investors through the placement of 92,373,610 ordinary shares at $1.43 a share.

Frontier markets are countries that are too small to be considered as emerging markets or are not as developed as emerging markets. Many of them were in Africa, Corbett said.

The company was expected to join a number of UK indices following the listing and would have a market capitalisation of about R5.2bn on listing.

Grit, the first Mauritiandomiciled company to list in London, would also keep primary listings on the LSE, the JSE and the Stock Exchange of Mauritius, Corbett said.

South African investors were initially cautious about buying into Grit when it inwardly listed on the JSE’s AltX in 2014. The fund was then called Delta International and had $142m in assets. Its assets are now worth about $588.5m.

Keillen Ndlovu, head of listed property funds at Stanlib, said that there had not been a substantial amount of investable property stock in Africa for a number of years.

However, Grit had spent the past four years building up a sizeable portfolio that was focused on properties with long, dollar-denominated leases.

Grit owns hotels, shopping centres, offices and distribution centres in countries such as Botswana, Mauritius Mozambique, Ghana and Morocco.