GUERNSEY - Grit Real Estate Income Group Limited (LSE:GR1T), a pan-African real estate company, has completed a $100 million recapitalization for its subsidiary, Gateway Real Estate Africa (GREA). The Public Investment Corporation of South Africa, on behalf of the Government Employees Pension Fund (GEPF), contributed $48.5 million to the recapitalization, which was finalized on Monday.
The investment by GEPF, a significant pension manager, underscores its recognition of GREA as a key growth platform for its real estate interests across Africa. In line with this strategic partnership, Mr. Zethu Msindo was appointed to GREA's board on November 12, 2024, bringing extensive financial services experience to the role.
The funds will primarily serve to reduce GREA's costlier debt and will be invested in development projects that align with the Grit 2.0 strategy. The strategy aims to accelerate net asset value growth and generate fee income while contributing to environmental, social, and governance (ESG) impact. Projects include specialized real estate like diplomatic housing, healthcare facilities, and business process outsourcing centers, with expected development yields exceeding 10%.
GREA has a proven track record of delivering award-winning developments despite challenges such as the pandemic-related supply chain disruptions. Notable projects include the Rosslyn Grove Diplomatic Residences in Nairobi and the Precinct office park, which is the first 5-star green-star rated commercial development in the Indian Ocean Island region and the first Eco Districts certified commercial node in Africa.
The recapitalization, effective as of November 27, 2024, is a strategic move to restructure Grit's real estate assets into sector-focused portfolios that promise higher yields and resilience. These portfolios will focus on sectors like light industrial, data centers, logistics, and healthcare, and will either be held as investments or sold to other investors.
Bronwyn Knight, CEO of Grit, highlighted the significance of the PIC's investment and ongoing commitment, which will expedite the formation of sector-specific sub-structures that are expected to be more profitable and impactful.
This development is based on a press release statement and does not include any promotional content or endorsements of the claims made within.
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