Gritty road to list in London

It hasn’t been smooth-sailing for Grit, the JSE’s only rest-of-Africa-focused real estate company, since its market debut four years ago.

However, the lack of liquidity in Grit’s stock on the JSE and the Stock Exchange of Mauritius meant investors tended to ignore the company’s promise of US dollar-based income.

Grit chief executive Bronwyn Corbett is upping the ante on the company’s efforts to convince global investors about Africa’s growth prospects.

Grit is planning to list on London Stock Exchange’s (LSE) main board on July 31, a move expected to put it on the radar of international institutional investors.

“We want to diversify our shareholder base and put back the liquidity for our existing shareholders.

“It’s also about allowing the international investment community access to the African continent,” Corbett tells Moneyweb.

Garreth Elston, the portfolio manager at Reitway Global, says Grit’s LSE listing is a good move to boost liquidity, given its focus on frontier markets.

“Grit needed to go where investors are putting money in frontier markets and that is pretty much London.

“Investors are scattered around the globe but they are concentrated in London,” says Elston.

“The London listing was part of the final piece of the puzzle they needed to bring to address market concerns about liquidity.”

After listing on the LSE, Corbett expects Grit to be included on the FTSE Frontier 50 Index, which will expose its stock to index-tracking funds, helping it compete for institutional money in the UK.

Asked how Grit will entice global investors when it has struggled to attract backers from the African continent, Corbett says the drawcard will be Grit’s dividend yield that is higher than the yield offered by European property funds.

“We have a 9% US dollar-dividend yield growing by at least 3% per year.

“Some of our peer groups in London are sitting on a US dollar-dividend yield of 6%.”

Beyond offering dividend yields, Corbett says it’s also about giving international investors exposure to its $600 million-worth (R7.9 billion) property portfolio of retail, industrial, office and hotel assets based in Botswana, Kenya, Mauritius, Morocco, Mozambique, Ghana and Zambia.

Moneyweb

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