Interim Results Presentation - Grit · Interim Results Presentation FOR THE 6 MONTHS ENDED 31...
Transcript of Interim Results Presentation - Grit · Interim Results Presentation FOR THE 6 MONTHS ENDED 31...
Interim Results PresentationFOR THE 6 MONTHS ENDED 31 DECEMBER 2017
Ι 2
Group Review
Market Overview
Portfolio Overview
H1 FY18 Financial Review
Case Studies
Looking Ahead
Q&A
Proceedings
Ι 3
Grit Team Presenters
Bronwyn CorbettChief Executive OfficerB.Comm (Acc) (Univ. of Natal, PMB), CA(SA)
Leon van de MoorteleChief Finance OfficerBCompt (Hons), CA(SA)
Left to right: Greg Pearson (Group Director), Moira van der Westhuizen (Chief Integration Officer), Bronwyn Corbett (CEO), Heidi Rix (Group General Manager), Leon van de Moortele (CFO)
Ι 4
Africa Macro Roundup
Morocco➢ Dirham allowed to trade within a
band of +/- 2.5% around its peg➢ Real GDP growth of 4.6% in 2017
compared to 1.2% in 2016
que➢ Higher natural gas prices and FDI
inflows are expected to propel solid GDP growth
➢ Anadarko’s liquefied natural-gas project in the north of the nation approved, estimated at about $20 billion
Mauritius➢ GDP growth rates are projected to
increase to 4.2% in 2018 and 4.3% in 2019
➢ Tourism arrivals increase by +5.2% y/y in December 2017
Zambia➢ B3 rating affirmed by Moody’s and
outlook to ‘stable’ from ‘negative’
Kenya➢ Kenya's presidential rerun handed
over victory to Uhuru Kenyatta
Botswana➢ S&P to maintain Botswana’s
sovereign credit rating at A-; raises
outlook to ‘stable’ from ‘negative’
RwandaSenegal
Approved Jurisdictions
➢ The IMF expects Ghana to grow at 8.9% in real terms in 2018
Target Jurisdiction
Seychelles
Ι 5
GroupOverview
Victoria Beachcomber Resort & Spa, Mauritius
Ι 6
Interim Results Highlights
US$6.07cpswithin forecast
1. Weighted Average Lease Expiry
96.1%5
Due to fluctuating vacancies in re-
development at Anfa
7.4 years 5.69%3
-9 bps vs. FY17
Nil As per guidance
8.6% on the SEM
9.6% on the JSE
2. Weighted Average Cost of Debt3. As at 31 December 2017
44.8%6
Post transfer of recent acquisitions
US$152.7 cps4
+2.1% from FY17
4. US$158.7 cps pre dividend
H1 FY18 Distribution WALE1 WACD2 NAV
Dividend Yield Portfolio Occupancy Property LTV Capital Raised
6. Excluding revolver facilities5. 98.7%, excluding vacancies at Anfa re-development
Ι 7
Improved liquidity through dual-listing on the JSE Main Board and SEM Official Market Market capitalisation: US$302m*Dividend yield: 8.6% (SEM); 9.6% (JSE)*Free Float: 45.9% (as per JSE)
Attractive and sustainable hard currency income stream8 declared distributions in line with Management guidanceSemi-annual dividend payments
Geographic diversification into growing African countries, ex-SAFirst-mover advantage and unique investment product offering48.6% of portfolio in investment grade countries
Investment into high income-yielding real estate assets with global top-grade tenants20 properties; Total GLA: 295,853m²Assets value of US$592m; Occupancy rate of 96.1%WALE: 7.4 years
Supportive shareholdersNew investments by African pension funds and foreign institutional investors
Strong management expertiseSupported by expanding in-country asset and property management teams
Grit – At A Glance
*As at 03 February 2018
Ι 8
Marginsof
Safety
01
Hard currencyRepatriation
of funds
Political risk& macro-
economicsLand tenure
Ability to raise debt
Counterparty
02 03 04 05 06
Risk Mitigation
Ι 9
team• Strong & experienced management• Internal management committee
• In-country asset & property management• Supportive shareholders & counterparties
strength• Robust portfolio• Sound track record of ability to raise capital
consistency• Hard currency returns underpinned by solid
property fundamentals• High occupancy rates & quality tenants
growth• Expansion & diversification of portfolio• Shareholder value & returns • Existing expertise
v
“Grit is passion and perseverance, for very long term goals. It’s the day in, day out”
Ι 10
Market Overview
Commodity House Phase 2, Mozambique
Ι 11
Shareholder Base
7%
37%
15%
37%
1%3%
Shareholders By Type
Management & Staff
Investment Holding Companies
Mutual Funds
Pension Funds
Insurance Companies
Retails
• New institutional shareholders from the UK and Ghana
• New investments by African Pension Funds
• Increased participation by retail investors and improvements in liquidity
• Anchor shareholders:
▪ 32% Public Investment Corporation / Government Employees
▪ 11% Delta Property Fund Ltd
▪ 11% Drive In Trading Proprietary Ltd
▪ 7% Management & Staff
▪ 5% Eskom Pension & Provident Fund
Register %
South Africa 67
Mauritius 33
TOTAL 100
As at 31 December 2017
Ι 12
1. For period H1 FY18
Note: All other figures as at 03 Feb 2018
Grit in Figures
Price
JSE: ZAR 15.60 (US$1.29)
SEM: US$1.45
Discount to NAV
JSE: 15.4%SEM: 5.0%
Market
Capitalisation
JSE: ZAR3.3bnSEM: US$302m
Free Float
JSE: 45.9%SEM: Not reported
Trading Frequency1
JSE: 74%SEM: 56%
Average Daily
Volume Traded1
JSE: 36,600SEM: 24,574
0
100
200
300
400
500
600
700
800
900
1,000
1,100
Nu
mb
er o
f Sh
ares
Tra
ded
(‘0
00
s)
Liquidity of Grit Shares
JSE Volume SEM Volume
• SEM-10 Index inclusion since 04 October 2017
• Inclusion in Cloud Atlas AMI series BIG 50 EX-SA index, effective since 16 January 2018
• Cloud Atlas AMI Real Estate ex-South Africa ETF upcoming (with Grit as a key constituent in the underlying index)
Ι 13
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
H1 FY17 H1 FY18
Trading Frequency
JSE SEM
0
5
10
15
20
25
30
35
40
H1 FY17 H1 FY18
USD
(‘0
00
s)
Avg. Daily Value Traded (SEM)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
H1 FY17 H1 FY18
Nu
mb
er o
f Sh
ares
(‘0
00
s)
Total Volume Traded
JSE SEM
Grit Trading Statistics
TRADINGFREQUENCY
H1FY17
H1FY18
JSE 54.8% 73.8%
SEM 2.4% 55.6%
TOTAL TURNOVER
JSE (ZAR) 66,174,871 74,439,561
SEM (USD) 124,852 4,186,706
AVERAGE DAILY VALUE TRADED
JSE (ZAR) 525,197 590,790
SEM (USD) 999 33,764
TOTAL VOLUME TRADED(# OF SHARES)
JSE 3,478,039 4,611,634
SEM 72,500 3,047,221
As at 31 January 2018
480
500
520
540
560
580
600
H1 FY17 H1 FY18
ZAR
(‘0
00
s)
Avg. Daily Value Traded (JSE)
Ι 14 Source: National Association of Real Estate Investment Trusts (as at 26 Jan 2018); Returns in USD terms
Target of 12% total USD return for Grit
for FY18
Target of8.25% dividend yield and 3.75%
NAV growth
0
1
2
3
4
5
6
7
8
9
10
Global Americas Asia/Pacific Europe Middle East/ Africa Grit
Dividend Yield (%)
2015 2016 2017
Differentiating Grit from Global REITs
Ι 15 Mauricia Beachcomber Resort & Spa, Mauritius
Portfolio Overview
Ι 16
ZIMPETO SQUARECOMMODITY HOUSE
HOLLARD
BOLLORE
ANFA PLACE SHOPPING CENTER
VDE HOUSING ESTATE
MUKUBA MALL (50%)
KAFUBU MALL (50%)
COSMOPOLITAN MALL (50%)
BUFFALO MALL (50%)
VODACOM
BARCLAYS HOUSE
MALL DE TETE IMPERIAL:
LUX:
Tamassa
BEACHCOMBER
RETAILLIGHT INDUSTRIAL
HOSPITALITYCORPORATERESIDENTIAL
HELD FOR DEVELOPMENT
LLR (6.25%)
• Properties are owned at 100% unless specified otherwise;• Commodity House Phase 2 is a building developed on the same site as the existing Commodity House Phase 1 (previously 3412 Julius Nyerere) in Maputo
RETAIL COMMERCIAL LIGHT INDUSTRIAL
HOSPITALITYCORPORATE ACCOMMODATION
LISTED EQUITY
Mauricia (44%)
Canonnier (44%)
Victoria (44%)
Phase 1
Phase 2 (held for
development)
KenyaMozambique Morocco ZambiaMauritius Botswana
Portfolio Overview
Phase 1
Phase 2
Ι 17
As at 31 January 2018 Retail Commercial Light Industrial HospitalityCorporate
AccommodationHeld for
DevelopmentTotal
Number of Properties 7 5 2 4 1 1 20
Property Value/Acquisition Price (US$ m)
235.5 143.6 24.9 136.9 34.3 8.1 US$583.5m3
Weighted Average Capitalisation Rate (%) 7.0 8.4 9.4 7.5 10.8 n/a 7.8%
WALE (years) 4.3 8.8 7.2 12.1 2.7 n/a 7.4 years
Weighted Average Lease Escalations (%) 3.9 3.6 1.9 1.1 3.2 n/a 3.0%
Weighted Average Gross US$ Rental per m² per month1 22.5 28.6 10.7 17.8 22.9 n/a
US$21.1/m² pm
Gross Lettable Area [GLA] (m2) 83,963 35,316 19,934 57,397 12,966 n/a 209,576 m2
Full GLA (m2) 120,712 35,316 19,934 106,925 12,966 n/a 295,853 m2
Operating Cost to Income ratio1 (%) 30.8 6.1 3.0 0.0 12.2 n/a 15.3%
Vacancies (%) 1.2 0.3 0.0 0.0 0.0 18.6 3.9%
Weighted Average Cost of Property Debt1 (%) 5.6 6.6 10.6 4.3 0.1 n/a 5.8%
Debt to Property Value2 (%) 46.6 47.2 34.3 46.2 34.2 n/a 44.8%
1. Half year end 31 December 20172. Excluding revolver facilities 3. Excludes listed investments, loans receivables and other financial assets
Portfolio Key Metrics
Ι 18
32.8%
20.3%
4.3%
24.2%
17.8%
0.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Diversification of Portfolio
Note: Split by asset value
Geographical Split of Property Sectoral Split of Property
H1 FY18FY17FY16FY15H1 FY18FY17FY16FY15
Mozambique Zambia Kenya Mauritius Morocco Botswana
29.3%
38.2%
4.5%
21.9%
5.5%
0.6%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Commercial Retail Light Industrial Hospitality CorporateAccommodation
Listed Equity
Ι 19
Rank Key Tenants Industry JurisdictionGLA
(% of Group Total)
Income(% of Group
Total)
LeaseCovenant
Lease Currency
1 Hospitality 18% 14% Triple Net EUR
2 Mining 5% 10% Gross USD
3 Hospitality 10% 9% Triple Net EUR
4 Telecom. 5% 9% Double Net USD
5 Retail 8% 7% Gross USD
Note: Ranked by Income
Key Tenants Schedule
Ι 20
Rank Key Tenants Industry JurisdictionGLA
(% of Group Total)
Income(% of Group
Total)
LeaseCovenant
Lease Currency
6Oil & Gas
Exploration2% 5% Gross USD
7 Retail 5% 5% Gross USD / ZMW
8 Retail 4% 4% Gross USD / ZMW
9 Logistics 7% 4% Triple Net USD
10 Retail 2% 4% Gross MAD
Key Tenants Schedule (Cont.)
Note: Ranked by Income
Ι 21
H1 FY18 Financial Review
Cosmopolitan Mall, Zambia
Ι 22
NAV per share (US$ cps)
H1 FY18: 158.7
FY17: 150.9
Loan to Value
H1 FY18: 49.2%
FY17: 41.6%
GROUP
H1 FY18 FY17
US$m US$m Movement
Assets
Non-current assetsTotal Property Investments 592.4 507.6 16.7%
Other non-current assets 28.4 26.5 7.2%
Total non-current assets 620.9 534.1 16.3%
Total current assets 50.9 51.0 -0.2%
Total assets 671.7 585.2 14.8%
Equity and liabilities
Total equity attributable to equity holders
Share capital 320.0 320.0 -
Foreign currency translation reserve 2.7 1.1 145.5%
Antecedent dividend reserve - 1.3
Retained (loss)/income 8.3 (7.6)
Total equity attributable to equity holders 331.0 314.7 5.2%
Liabilities
Non-current liabilities
Preference shares 12.8 12.8 -
Interest-bearing borrowings 261.5 187.4 39.5%
Other non-current liabilities 1.3 1.1 18.2%
Total non-current liabilities 275.6 201.4 36.8%
Total current liabilities 65.1 69.1 -5.8%
Total liabilities 340.8 270.4 26.0%
Total equity and liabilities 671.7 585.2 14.8%
Statement ofFinancial Position
Ι 23
Property Investment Updates
Ι 23
210.4
295.0
507.6
592.4
0.0
100.0
200.0
300.0
400.0
500.0
600.0
2015 2016 2017 as at 31-Aug-17
Total Property Investment Value (US$m)
• Total Property Investments
• US$592m (+16.7%)
• Transfers completed:
• Imperial Distribution Centre
(Kenya), August 17
• Beachcomber Hotels
(Mauritius), August 17
• Commodity House Phase 2
(Mozambique) development
completed, November 17
• 6.25% stake in Letlole La Rona
Limited (Botswana)
FY15 FY16 FY17 H1 FY18
Ι 24
Evolution Of NAV Per Share
+2.08%
Ι 25
Debt Summary
Barclays House, Mauritius
Ι 26
70.6%
28.4%
0.9%0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
USD EUR MZN
2017 2018
Debt Currency Exposure Investment Currency Exposure
Debt Summary
60.1%
39.9%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
USD EUR
2017 2018
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
FY17 H1 FY18
EUR
('0
00
s)
Net EUR Exposure
-29.6%
Ι 27
6.94%
6.22%
5.78%
5.69%
0.2%
0.4%
0.6%
0.8%
1.0%
1.2%
1.4%
1.6%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
FY2015 FY2016 FY2017 HY2018
Weighted Average Cost of Debt
WACD Libor
H1 FY18FY17FY16FY15
Debt Summary (Cont.)
Ι 28
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Feb 18 Apr 18 Jul 18 Sep 18 Nov 18 Feb 19 Mar-19 Sep 19 Mar 20 Dec 20 2021onwards
US$
(‘0
00
s)Debt Expiry Profile
Debt Expiry Profile
Ι 29
Multi-Bank Strategy
31.5%
23.1%
17.1%
13.2%
10.4%
3.8%
1.0%0.0% 0.0%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
Bank of China Standard Bank Investec Bank State BankMauritius
Barclays Afrasia Bank Banco Unico Rockcastle /Standard Bank
Nedbank SouthAfrica
Debt Provider
FY17 H1 FY18
Ι 30
H1 FY18 Distributable Income
Cannonier Beachcomber Resort & Spa, Mauritius
Ι 31
Distributable Income Movement
Distributable Income MovementH1 FY18
US$mH2 FY17
US$mH1 FY17
US$m
Rental Income 15.2 13.6 10.7
Share in profit from associates (excluding non-cash items)
5.5 2.7 2.5
Operating expenses (2.7) (4.2) (2.9)
Other Income 1.6 1.9 1.4
Admin Expenses (3.2) (2.6) (3.0)
Amortisation of Intangible Assets 0.0 (0.2) 0.3
Interest Income 3.8 1.7 0.3
Interest Expense (8.8) (6.7) (4.3)
Realised Exchange Gains 0.2 0.1 1.9
Current Tax - 0.9 (0.9)
Antecedant Dividend - 1.3 0.9
Tax credits utilised 1.1 - -
Profits (retained)/released 0.2 (0.2) 0.1
Distributable Earnings Attributable to Shareholders
12.7 8.3 6.8
Dividend per share (US$ cps) 6.07 5.95 6.12
Weighted Average Cost of Debt
H1 FY18: 5.69%H2 FY17: 5.78%
Admin Cost to Asset Value
H1 FY18: 1.1%H2 FY17: 1.1%
Operating Costs to Income
H1 FY18: 15.3%H2 FY17: 27.5%
Ι 32
Dividend History
• Distribution: +2.0% vs H2 FY17
• Full year dividend within 3-5%
target range
• Full year dividend:
H1 FY18 - US$6.07 cps
H2 FY17 - US$5.95 cps
11.29 11.75 12.07
6.07
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
FY15 FY16 FY17 H1 FY18
US$
Cen
ts p
er s
har
e (c
ps)
Target
+4.1%+2.7%
Ι 33
Case Studies
Hollard, Mozambique
Ι 34Ι 34
Grit’s Transformational Strategy
• Grit is committed to supporting the underlying economies of its operations and to
being a responsible corporate citizen.
• Empowering local communities within all areas of Grit’s operations and
stakeholders, through employment, knowledge transfer and best practice policies.
• The implementation of Grit’s transformational strategy will secure investor
support from local and international DFIs for future capital raises, enabling Grit
to:
• grow the company’s investment base;
• enhance liquidity; and
• ultimately create value for all shareholders.
• Grit’s transformational partner will be actively involved in the improvement of
Grit’s operations, including but not limited to:
• Adding strategic insight to the Grit executive;
• Devising property management strategies;
• Driving inroads to new investment jurisdictions; and
• Pipeline development.
Ι 35
Margins of Safety Opportunities Investment Strategy
Hard currency leasesAccra as a regional
economic and logistics hubGrit as the preferred
corporate real estate partner
Proven ability to repatriate funds
Accretive transactionsEnhanced distribution to
shareholders
Insurance against political risk
Ghana as an economic powerhouse in Africa
Regional Diversification
Security around land tenure
Increased WALE Sustainable income streams
Ability to secure debt Cost effective funding Accessing local capital market
with a unique investment offering
Tax Efficient Structuring
REIT legislation(expected mid-2018)
Investment vehicle for local pension funds and insurance
companies Strategic partnerships
and in-country resources
Leveraging off local expertise; Knowledge
Transfer
Developing an internally managed leading property
portfolio
Investment into Ghana is ramping up, with upcoming developments such as the new airport due for completion in April 2018
Ι 36
Margins of Safety Opportunities Investment Strategy
Hard currency leasesStable local currency partially pegged to a
basket of hard currencies
Grit as a key corporate real estate partner; Target hard
currency leases
Proven ability to repatriate funds
Accretive transactionsEnhanced distribution to
shareholders
Insurance against political risk
Investment Grade jurisdiction
Platform for growth in Botswana and the region
Security around land tenure
Freehold and long-dated leasehold assets
Sustainable income streams
Ability to secure debt Cost effective funding Accessing local capital market
with a unique investment offering
Strategic partnerships and in-country
resources
Leveraging off local expertise; Knowledge
Transfer
Developing an internally managed leading property
portfolio
Botswana is the country with the highest Investment Grade rating in Africa, with an S&P A- rating with and a Moody’s A2 rating
Ι 37
Anfa Place Shopping Center
Ι 37
Current Revitalisation Project Status• Required Vacancy Creation for layout
improvements: +/- 95% complete• Required Tenancy Relocation Commitment
for improved tenancy mix: +/- 85% complete
• Authority Project Approval: In process
Key Tenancies Successfully Relocated for Project Objective• Body Shop• La Vie en Rose• Gymbo – National Moroccan Children’s
Entertainment Brand • Jennyfer
New Tenants Secured via Project• LC Waikiki (Global Turkish Brand)• Samsung• Marwa (National Moroccan Brand)• Ipanema• Colins• Youride• The Doorz (National Moroccan Brand)• Fauchon• Chili’s• Long John Silver• Kiabi Regional Offices• 2793m² of offers under negotiation
Existing Tenancies to Expand as Part of Project• New Yorker• Terranova• McDonalds
Key Tenancies in Process of Reconfiguration or Relocation• Marks & Spencer• Beauty Success (Global French Brand)• Charles & Keith• Burger King• Domino’s Pizza• Kosebasi
Ι 38
• Country diversification into new
jurisdictions with promising growth
prospects
• Introducing new shareholders at
NAV
• Expansion of international brands,
tenant base and relationships
• Asset growth through new
accretive acquisitions
• Asset diversification whilst
ensuring secure, hard currency
leases
• Target 12% total USD return: 8.25%
dividend yield and 3.75% NAV
growth
• Forecast dividend growth 3% - 5%
Looking ahead
Ι 39
Grit Real Estate Income GroupReg. No. C128881
3rd floor, La Croisette Shopping Centre, Grand Baie 30517, MauritiusLevel 5, Alexander House, 35 Cybercity Ebene 72201, Mauritius
T: +230 269 7090E: [email protected]
Thank You
Ι 40
Annexure
Ι 41
July 2014Acquisition of Anfa Place Shopping Center (Morocco) for US$114.68m
July 2014Acquired Anadarko Building (Mozambique) as its 1st asset for US$32.5m
July 2014Completion of inward listing on the JSE Limited’s ALT-X board as Delta International
Acquisition of Assets Key Events
Timeline - 2014
41
Ι 42
Acquisition of Assets Key Events
Timeline - 2015
March 2015Debut on Mauritius Stock Exchange (SEM) and migration from BSX
Maiden distribution of US$6.63cps
April 2015Introduction of the Public Investment Corporation as Anchor Shareholder in US$42.0m capital raise
April 2015Acquisition of Hollard/KPMG (Mozambique) building for US$14.9m
May 2015Acquired the Vodacom Building (Mozambique) US$49m
June 2015Maiden issue of shares on the SEM
August 2015Acquisition of ZimpetoSquare (Mozambique) For US$10.2m
August 2015Paid distribution of US$4.65cps, taking FY2015 distribution to a total of US$11.28cps
Ι 43
Acquisition of Assets Key Events
Timeline - 2015 (Cont.)
November 2015Delta Africa and Pivotal merger announcement and formation of Mara Delta
December 2015Acquired Kafubu Mall and MukubaMall (Zambia)US$40.6m
Ι 44
Acquisition of Assets Key Events
Timeline - 2016
April 2016Acquisition of Buffalo Mall (Kenya) & Bollore Warehouse (Mozambique)Combined: US$14.8m
March 2016Acquisition of Barclays House (Mauritius)US$13.6m
May 2016Delta Africa officially becomes Mara Delta –the largest pan African income fund listed on the JSE and SEM
December 2016Leaseback acquisition of a 44.4% stake in Beachcomber Hospitality Investments (BHI), owner of 3 luxury resorts in Mauritius for US$83.4m
March 2016Paid distribution of US$6.17cps for sixmonth period ended 31 December 2015
October 2016Paid distribution of US$5.58cps,taking FY2016 distribution to a totalof US$11.75 cps
Ι 45
March 2017Leaseback acquisition of Tamassa Resort (Mauritius) from Lux Resorts for US$24.2m
June 2017 Raised US$121 million by way of a rights offer at an issue price of US$1.40 per share, significantly increasing market cap and asset value to c.US$600 million
Timeline - 2017
Acquisition of Assets Key Events
March 2017Paid fifth distribution of US$6.12cps
June 2017 Sixth distribution – clean out dividend for period 1 Jan 17 to 30 Apr 17 of US$4.57cps prior to rights offer
June 2017Acquisition of Cosmopolitan Mall (Zambia) for US$37.2m
July 2017Shareholders approved Grit’s rebrand and name change, reflecting the Group’s current reality and future growth ambitions
August 2017Acquisition of Imperial Distribution (Kenya) for US$18m
October 2017Inclusion into the SEM-10 Index
Ι 46
Bronwyn CorbettChief Executive Officer
B.Comm (Acc) (Univ. of Natal, PMB), CA(SA)
Bronwyn is a founding member and CEO of Grit Real Estate Income Group, the largest pan-African focused real estate group listed on the JSE and SEM (stock exchanges in South Africa and Mauritius respectively). Bronwyn has over 10 years’ experience in the real estate investment sector. She worked in a real estate investment firm for 4 years as Financial Director before joining Motseng Investment Holdings in April 2009 as CFO. Together with the CEO, she was instrumental in growing the company’s direct real estate exposure to ZAR2 billion in 3 years, before listing the portfolio on the JSE as Delta Property Fund – where she held the positions of CFO and CIO. Bronwyn was part of the executive team that grew Delta Property Fund to a portfolio valued at ZAR12 billion in 4 years and converting the structure to a REIT. In 2014, she co-founded Delta International Property where she was appointed CEO. Under Bronwyn’s leadership, Grit has consistently achieved Dollar-based distribution forecasts exceeding 7%. She has driven the growth of the portfolio from US$140 million and two assets, to approximately US$590 million and 20 assets across five jurisdictions.
Leon van de MoorteleChief Finance Officer
BCompt (Hons), CA(SA)
Leon joined Grit in April 2015, as CFO, where he has utilised his tax structuring knowledge and experience in operatingin Africa to expand the asset base of the group. After completing articles with PwC, Leon moved to the Global RiskManagement Services within PwC, where he become the Senior Manager in charge of Data Management. In 2004, hemoved to Solenta Aviation where he became Group Finance Director within 18 months. During his tenure as GroupFinance Director, the group expanded from 12 aircraft to 48 aircraft, operating in 8 African countries (including SouthAfrica, Mozambique, Algeria, Ghana, Gabon, Kenya, Tanzania and Cote d’Ivoire). He joined Grit in April 2015, as CFO,where he has continued to utilise his tax structuring knowledge and experience in operating in Africa to expand the
asset base of the group
Greg PearsonGroup Director
MCMI, Elec Eng.
Greg Pearson is a founder member of Grit and has been instrumental in sustaining its rapid growth since inception in2014. Prior to Grit, Greg was responsible for expanding AECOM's African footprint. His hands-on experience hasallowed him to develop an expansive strategic business network with local and global developers as well as influentialindustry players on the continent and beyond. He has successfully completed a series of developments across theoffice, retail, leisure, education and healthcare sectors. Greg is registered with the Chartered Management Instituteand a graduate of Kingston University, London.
Executive Team
Ι 47
Heidi RixGroup General Manager
B.Comm LLB
Heidi joined Grit as Chief Operating Officer in May 2016. She has 19 years’ commercial and real estate experience and is an admitted attorney holding BComm and LLB degrees in addition to specialised real estate sector qualifications. Heidi has recently taken on an expanded role as Group General Manager. Before joining Grit, Heidi from Broll Property Group where she was a Group Director and Managing Director of their Investor Services Division. In this capacity, Heidi was responsible for the Asset Management, Property Management and Retail Leasing businesses at Broll. Her expertise include asset management, investment management, portfolio management, portfolio and management structures and performance management, lease management models, value optimisation of property assets, property acquisitions and disposals, real estate development projects (Greenfield opportunities), redevelopment/refurbishment projects (Brownfield opportunities) and portfolio analysis and due diligence. Prior to joining Broll, Heidi successfully managed her own property investment consulting business for over two years and held previous positions in the industry as a director for Atterbury Asset Managers as well as General Manager for RMB Properties (Pty) Ltd (now known as Eris Property Group).
Moira van der WesthuizenChief Integration Officer
B.Comm (Hons), CA(SA)
Moira joined Grit in May 2016 as the Chief Integration Officer. She holds a B Com (Honours) degree from the University of South Africa and is a qualified Chartered Accountant with more than two decades’ experience in auditing, finance and business, including managing her own practice before partnering with an audit and accounting practice in 2005. In 2008 Moira relocated to Mauritius where she worked for Investec Bank and later the CCI Group as Group Financial Controller before joining Grit. As CIO, Moira oversees the co-ordination of all interacting systems within the Group and its extended environments, ensuring the business is internally and externally coherent and congruent. This is achieved through the effective integration of all business systems and processes with other stakeholders, including corporate partners and statutory bodies. Moira is responsible for making recommendations to the social and ethics committee, a sub-committee of the board, on all matters related to Grit’s corporate social investment (CSI) programme.
Jaco van ZylDeputy Chief Financial
Officer
BCompt (Hons), BCom, CA(SA)
Jaco holds a BCom Degree from the North-West University, a BCompt Honours Degree from the University of South Africa and he is a qualified Chartered Accountant. After completing articles he moved to Federal Airlines as Financial Manager and ultimately assumed responsibility of the full finance function of the South African and Mozambican operations. In January 2012 he joined JSE-listed group, Sentula Mining’s exploration drilling division Geosearch as the Financial Manager and developed into the CFO for of the Geosearch group. Here his African experience expanded further into Mauritius, Botswana and Mozambique. Since joining Grit in February 2016, Jaco has assumed responsibility for the groups reporting and treasury function, effectively flowing funds within the Grit structure and maintaining debt facilities.
Executive Team
Ι 48
Sandile NomveteBoard Chairman
Listed Directorships: 3
Appointed to the board on
14 August 2014
Sandile is a graduate of the Property Development Programme from the University of Cape Town Graduate School of Business and holds an executive Development Programme and Finance for non-Financial Managers Diploma from WITS Graduate School of Business. Sandile co-founded Motseng Investment Holdings which eventually listed as a REIT in 2012 as Delta Property Fund ("Delta SA"). In his position as CEO, Sandile has grown the fund from a portfolio of assets valued at R2.1 billion in 2012, to R11.8 billion as at 28 February 2017. He has over 15 years of experience in executive positions, with his entrepreneurial and forward-thinking persona propelling him into becoming one of South Africa’s leading business executives. Sandile serves as a non-executive director on KAP Industrial Holdings.
Peter ToddLead Independent Director
Listed Directorships: 3
Appointed to the board on
14 August 2014
Peter is a qualified attorney and began his career as the senior tax manager at Arthur Anderson and Associates in Johannesburg. He joined TWS Rubin Ferguson in 1993 as a tax partner and was instrumental in listing six companies on the JSE. In 2000, Peter established Osiris International Trustees Limited in the British Virgin Islands (“BVI”) to provide international trust and corporate administrative services to global clients, as well as Drake Fund Advisors which assists with the setup and administration of hedge funds in the BVI and Cayman Islands. He held a non-executive director position at Redefine International Limited from the initial listing for some 9 years and has been involved in the property industry for many years.
Chandra GujadhurIndependent Non-Executive Director
Listed Directorships: 1
Appointed to the board on
11 March 2015
Chandra is the Chairman and co-founder of Apex Fund Services (Mauritius) Limited. He is also a member of the Institute of Chartered of Accountants in England and Wales and an associate member of the Society of Trust and Estate Practitioners, has long standing experience in the auditing of offshore funds, fund structuring and tax planning. He was previously a member of the Accounting and Auditing task team of the Corporate Governance Committee of Mauritius and the Chairman and member of the Consultative Sub-Committee on the drawing up of the New Listing Rules of the Stock Exchange of Mauritius. He retired as a senior partner with Deloitte at the end of September 2006, after 18 years, to assume the responsibility of Managing director at Apex Mauritius. As a board member of numerous India and Africa focused funds and companies he has gained extensive experience and knowledge on key industries in India and Africa and their principal capital markets
Members of the Board
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Ian MacleodIndependent Non-Executive Director
Listed Directorships: 2
Appointed to the board on
1 July 2015
Ian holds a BCom (Honours) in Real Estate Investment, Valuation and Development and has over 43 years of experience with financial institutions, including Standard Bank of South Africa and Nedbank with a specific focus on Real Estate Credit Risk. He has extensive knowledge of the real estate sector’s key role players, business sector and geographic nodes. Ian has managed portfolios in excess of R80 billion during changing economic cycles and managing problematic properties in economic downturns. It is Ian’s expertise and knowledge that have seen him previously hold the position of Head of Credit for Real Estate.
Matshepo MoreIndependent Non-Executive Director
Listed Directorships: 3
Appointed to the board on
7 February 2017
Matshepo is a Chartered Accountant and holds a Certificate in Theory of Accounting and a Bachelor of Business Science in Finance. Matshepo served her articles at Deloitte, specialising in financial institutions, before being seconded to New York to handle a large asset management company. She was promoted to audit manager on her return to SA. Matshepo left Deloitte to join the PIC in 2009, where she was appointed as Finance Manager. In 2011, she was appointed CFO of the PIC, where she is responsible for the Corporation’s finances, ensuring that the PIC
complies with the Public Finance Management Act (PFMA), which regulates financial management of all public entities in the national government and provincial governments. Matshepo is a member of the Financial Reporting Standards Council, a statutory body responsible for issuing financial reporting standards in South Africa and she also serves on the board of IRBA.
Nomzamo RadebeNon-Executive Director
Listed Directorships: 1
Appointed to the board on 24 November 2017
Nomzamo is the Chief Executive Officer of JHI Properties, one of South Africa’s leading property services companies. Her personal affiliations include registration with the South African Institute of Chartered Accountants (SAICA), and membership of the Institute of Directors of Southern Africa, the South African Property Owners Association (SAPOA), South African Council of Shopping Centres and Women’s Property Network (WPN). She is a former chief investment officer of Pareto Limited, a well-established property company and a leader in the retail property industry in South Africa. Prior to joining Pareto, Nomzamo worked in the National Treasury’s Asset and Liability Unit (within the Asset Management division) where her key responsibilities included the monitoring of the financial performance of state-owned enterprises, the facilitation of Government’s restructuring initiatives for SOE’s and the promulgation of the Auditing Profession Act. Between 2001 and 2004 she worked in the Sasol Group treasury unit as a Treasury Operations Manager, playing an important role in managing the company’s treasury risks and developing treasury management systems. She completed her articles with KPMG Inc.
Members of the Board
Ι 50
Catherine McIlraithIndependent Non-Executive Director
Listed Directorships: 4
Appointed to the board on 24 November 2017
Catherine is a Mauritian citizen and holds a Bachelor of Accountancy degree from the University of the Witwatersrand, Johannesburg, South Africa and has been a member of the South African Institute of Chartered Accountants since 1992. She served her Articles at Ernst & Young in Johannesburg. She then joined the Investment Banking industry and has held senior positions in corporate and specialized finance for Ridge Corporate Finance, BoE NatWest and BoE Merchant Bank in Johannesburg. She returned to Mauritius in 2004 to join Investec Bank where she was Head of Banking until 2010. She has been an independent non-executive director and a member of various committees for several public and private companies in Mauritius including AfrAsia Bank Limited, Les Gaz Industriels Limited and The Mauritius Development Investment Trust Co Limited. She has also been a member of the Financial Reporting Council (FRC). Her current board memberships as an independent non-executive director are CIEL Limited, Anchor Capital (Mauritius) Limited and Astoria Investments Limited. Catherine is a Fellow Member of the Mauritius Institute of Directors.
Members of the Board
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Property Portfolio
Location: Pemba, Mozambique
Anchor tenant:
Bollore Africa Logistics
Sector: Light industrial
Land title: Leasehold
GLA: 6 374m2
Parking bays:
10
Valuation: US$6.5 M
Location: Maputo,Mozambique
Anchor tenant:
Retail Masters
Sector: Retail
Land title:Leasehold (50+50)
GLA: 4 764m2
Parking bays:
136
Valuation: US$11.0 M
Location: Maputo,Mozambique
Anchor tenant:
Vodacom
Sector: Office
Land title:Leasehold (50+50)
GLA: 10 995m2
Parking bays:
336
Valuation: US$49.5 M
Location: Maputo,Mozambique
Anchor tenant:
KPMG, Hollard & BP
Sector: Office
Land title:Leasehold(50+50)
GLA: 4 945m2
Parking bays:
99
Valuation: US$19.0 M
Location: Maputo,Mozambique
Anchor tenant:
Anadarko Petroleum
Sector: Office
Land title:Leasehold(50+50)
GLA: 7 805m2
Parking bays:
185
Valuation: US$43.1M
Commodity House Phase 1 Hollard Building Vodacom Building
Zimpeto Square Bollore
* Value presented proportional to ownership interest held
Location: Tete, Mozambique
Anchor tenants:
Shoprite, Choppies
Sector: Retail
Land title: Leasehold
GLA: 11 571m2
Parking bays:
419
Valuation: US$24.2 M
Mall de Tete
51
Ι 52
Property Portfolio (Cont.)
Location: Pointe aux Canonniers,Mauritius
Anchor tenant:
Beachcomber
Sector: Hospitality
Land title: Leasehold
No of. rooms:
284
Valuation: US$27.2 M*
Location: Pointe Aux Piments, Mauritius
Anchor tenant:
Beachcomber
Sector: Hospitality
Land title: Leasehold
No of. rooms:
294
Valuation: US$38.3 M*
Location: Grand Baie, Mauritius
Anchor tenant:
Beachcomber
Sector: Hospitality
Land title: Leasehold
No of. rooms:
238
Valuation: US$26.0 M*
Mauricia Resort & Spa (44.4% ownership*) Victoria Resort & Spa (44.4% ownership*) Canonnier Resort & Spa (44.4% ownership*)
* Value presented proportional to ownership interest held
Location: Tete, Mozambique
Anchor tenants:
Vale and Barloworld
Sector:Corporate Residential
Land title Leasehold
No of units:
83 x 3 bed villas40 x 2 bed apartments
Valuation: US$34.3 M
VDE Housing Estate
Location: Ebene, Mauritius
Anchor tenant:
Barclays Bank
Sector: Office
Land title: Leasehold
GLA: 7 700m2
Parking bays:
150
Valuation: US$14.6 M
Barclays House
Location: Bel Ombre, Mauritius
Anchor tenant:
Lux Island Resorts
Sector: Hospitality
Land title: Leasehold
No of. rooms:
214
Valuation: US$45.4 M
Tamassa Resort
52
Ι 53
Property Portfolio (Cont.)
Location: Nairobi, Kenya
Anchor tenant:
Imperial Health Sciences
Sector: Light Industrial
Land title: Leasehold
GLA: 13 560m2
Parking bays:
N/A
Valuation: US$18.4 M
Location: Naivasha, Kenya
Anchor tenant:
Tuskys
Sector: Retail
Land title: Leasehold
GLA: 6 615m2 (100%)
Parking bays:
250
Valuation: US$5.9 M*
Buffalo Mall (50.0% ownership*) Imperial Warehouse
* Value presented proportional to ownership interest held
Location: Casablanca,Morocco
Anchor tenants:
Carrefour, M&S, H&M, LC Waikiki
Sector: Retail
Land title:Freehold
GLA: 30 879m2
Parking bays:
1 148
Valuation: US$105.6 M
Anfa Place Shopping Center
Location: Ndola, Zambia
Anchor tenant:
Shoprite
Sector: Retail
Land title: Leasehold
GLA: 12 142m2 (100%)
Parking bays:
180
Valuation: US$12.5 M*
Kafubu Mall (50% ownership*)
Location: Lusaka, Zambia
Anchor tenant:
Shoprite, Game
Sector: Retail
Land title: Leasehold
GLA: 26 512m2 (100%)
Parking bays:
1300
Valuation: US$39.5 M*
Location: Kitwe, Zambia
Anchor tenant:
Shoprite, Game, Pick n Pay
Sector: Retail
Land title: Freehold
GLA: 28 230m2 (100%)
Parking bays:
670
Valuation: US$36.8 M*
Mukuba Mall (50% ownership*) Cosmopolitan Mall (50% ownership*)
53
This report has been issued and approved for use by you solely for your information and should not be considered to be an offer or solicitation of an offer to buy or sell or subscribe for any securities, financial instruments orany rights attaching to such securities or financial instruments.
This report is intended for use by professional and business investors only.
The information and opinions have been compiled from reliable sources but neither Grit Real Estate Income Group (“Grit”), nor its directors, officers or employees accept any liability for loss arising from the use of thisinformation or the accuracy of it. Any forecasts, opinions or estimates constitute assessments given at the date of this report only.
There can be no reliance on the fact that future results or events will be consistent with past performances or the results, opinions, forecasts or estimates provided in this report. The past performance and the opinions andestimates given in this report, expressed or implied, should not be seen as a guarantee of future performance. This report is subject to change and its accuracy is not guaranteed. The value of securities can rise or falldepending on currency exchange fluctuations which can affect the value positively or negatively.
Investors should seek professional advice of whether to invest in the securities discussed in this report
Grit securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold, directly or indirectly, in the United States of America,unless they have been registered under the Act or the investor has exemption from the Securities Act. Grit does not intend to register its securities under the Securities Act or to conduct a public offering of the securities inthe United States of America. Should securities be offered in the future, in the United States of America, any offering of securities will be made only to qualified institutional buyers in accordance with Rule 144 A under theSecurities Act or in other transactions exempt from, or not subject to, the registration requirements of the Securities Act and applicable state or local securities laws. Outside the United States of America, any future offeringof securities will be made in accordance with applicable regulations and under securities legislation.
In member states of the European Economic Area (“EEA”) which have implemented the Prospectus Directive (each, a “Relevant Member State”), this presentation is directed exclusively at persons who are qualified investorswithin the meaning of the Prospectus Directive (“Qualified Investors”). For these purposes, the expression Prospectus Directive means Directive 2003/71/EC (and amendments thereto, including Directive 2010/73/EU, to theextent implemented in a Relevant Member State), and includes any relevant implementing measure in the Relevant Member State.
In the United Kingdom this presentation is only being distributed to, and is only directed at, Qualified Investors who are (i) investment professionals falling within Article 19(5) of the UK Financial Services and Markets Act2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth entities falling within Article 49(2)(a) to (d) of the Order, or (iii) other persons to whom it may otherwise be lawfully communicated (all such personstogether being referred to as “relevant persons”). Persons who do not fall within the category of relevant persons should not take any action on the basis of this presentation and should not act or rely on it.
Nothing in this presentation should be viewed, or construed, as "advice", as that term is used in the South African Financial Markets Act, 2012, and/or Financial Advisory and Intermediary Services Act, 2002 and/or theequivalent legislation in the United States of America.
This publication is confidential for the information of the addressee only (or the audience) and may not be reproduced in whole or in part, copies circulated or distributed to another party.
Disclaimer
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