Grit Real Estate Income Group Limited · LSE:GR1T
Grit Real Estate Income — H1 2022 Earnings Presentation
55 slides from Grit Real Estate Income's earnings presentation, 2022
Slide 1: HY2022 Results
HY2022 Results For the six months ended 31 December 2021
Slide 2: Proceedings
Proceedings BRONWYN KNIGHT Introduction Chief Executive Officer BCom (Acc), CA(SA) Key Highlights • 2019 EY Entrepreneur of the Year Award Winner (Exceptional Category, Southern Africa) Portfolio Overview • 2015 Top CA(SA) under 35 Award Winner Financial Review Growth & Pipeline LEON VAN DE MOORTELE
Slide 3: We are THE Real Estate Ecosystem in Africa
We are THE Real Estate Ecosystem in Africa Ι 4
Slide 4: Values
Values g Gutsy Go Getters… Grateful Go Givers r Resilience & Results through Relationships and Reinvention i Innovation with Integrity t Tenacity through Teamwork and Trust
Slide 5: Exposure limit to Gateway Real Estate Africa
*Combined exposure to pre-funding developments and Grit’s equity ownership to Gateway Real Estate Africa not to exceed 20% of Gross asset value Ι 6
Slide 6: Grit at a glance
Our High-quality Grit at a glance GEOGRAPHIC SPLIT1 Tenants Geographic & sectoral diversification 3.1% 2.0% FINANCIAL HIGHLIGHTS # 3.7% Mozambique 4.9% Mauritius 41.4% 5.7% US$802.3m Zambia Morocco 6.2% 38.7% Group LTV WACD Income-producing assets Ghana 6.9% Kenya Botswana 10.9% PORTFOLIO HIGHLIGHTS
Slide 7: De-risked Investment Strategy
De-risked Investment Strategy 01 02 03 Margins 04 05 06 Political risk of Repatriation Ability to Hard currency of funds & macro- economics Safety Land tenure raise debt Counterparty CURRENCY TENANCY REPATRIATION COUNTRY OPERATIONAL OVEREXPOSURE POLITICAL RISK RISK RISK RISK RISK RISK RISK Prioritis
Slide 8: Highlights
TAMASSA RESORT MAURITIUS Highlights
Slide 9: HY2022 Highlights & Trends
HY2022 Highlights & Trends (31 December 2021) Solid operational performance in a challenging environment US$802.3m US$86.7cps 94.3% +0.8% (+0.1%) (US$104.2 pre dilution) (-0.4ppt) Total Income EPRA NRV per EPRA Occupancy Net Operating Income Producing Assets1 share2 rate3 (incl. Associates)4 HY2021:
Slide 10: HY22 Snapshot: Key themes
HY22 Snapshot: Key themes Strong cash collection and reduced LTV have paved the way for the Group to reinstate dividends in FY2022 IMPROVED LIQUIDITY STABILISED OPERATIONS BALANCE SHEET IMPROVING & UPDATE ON COMMITMENTS • Improving recovery outlook for • Placing of 146mln new Ordinary • Strong cash
Slide 11: Covid period impacts on valuation, collection and LTV
Covid period Impacts on valuation, collection and LTV Valuation impacts stabilising after significant impacts in 2020 and 2021 GROUP LTV Reported Total Value move (incl additions) Property 12m to 30 June’21 6m to 31 Dec’21 53.1% 41.4% Valuation 30 Jun 2021 31 Dec 2021 Balance 12M % 6M % 31 Dec’19 to
Slide 12: Hospitality sector: Improving outlook
Hospitality sector: Improving outlook Mauritius borders re-opened on 1 October 2021 and Club Med Senegal re-opened on 5 December 2021 • All hospitality assets are open and trading • Lux and NMH resumed rental • Club Med Cap Skirring experienced strong bookings payments from Oct 21, Club Med OPERATIO
Slide 13: Retail sector update
Retail sector update Significant letting activity across the portfolio with major tenants, reflecting strong demand for our high-quality retail assets MOROCCO – ANFAPLACE ZAMBIA – COSMO MALL • Turkish fashion retailer Colin’s • Turkish fashion retailer signed on as a new tenant in LC Waikiki opened
Slide 14: Asset Recycling & Industrial Asset focus
Asset Recycling & Industrial Asset focus The Group continues to progress its Asset Recycling Strategy (non-core/mature assets) in favour of reducing debt ABSA HOUSE ANFAPLACE MALL ORBIT WAREHOUSE • Binding transaction agreements • Continued engagement with • First round CP’s fulfilled, funds in sign
Slide 15: Capital Raise / GREA & APDM Acquisition Update
Capital Raise / GREA & APDM Acquisition Update Despite adverse market conditions, Grit concluded first phase of Placement OPEN OFFER, PLACING AND ACQUISITION SUMMARY • 22 November 2021: • Proposed Placing for cash and Share issuance for the Acquisition of GREA & APDM • 14 December 2021: • Majority G
Slide 16: Shareholder Base Evolution
Shareholder Base Evolution JSE shareholder contraction over time was the primary driver for JSE delisting and to concentrate liquidity through fewer exchanges Successful JSE de-listing Capital Raise with issue of shares 27.50 27.77 27.88 27.88 27.88 27.90 30.91 30.92 30.92 31.73 31.73 34.07 34.07 34
Slide 17: Portfolio overview
COMMODITY HOUSE MOZAMBIQUE Portfolio overview
Slide 18: Portfolio Characteristics (HY2022)
Portfolio Characteristics (HY2022) By Grit Economic By Grit proportionate interest consolidation 3.1% 2.0% 2.8% 1.7% 3.7% 3.4% KEY METRICS Mozambique 4.9% 4.4% Mauritius EPRA Occupancy1 5.5% 6.2% Zambia 94.3% 38.7% 39.2% Morocco 10.3% 1. Based on GRIT proportionate share GEOGRAPHIC 6.9% Ghana Kenya
Slide 19: EPRA Vacancy Bridge
EPRA Vacancy Bridge – 31 December 2021 Hospitality Light Industrial Corporate Accomodation LLR Office Retail 2.27% 0.21% 1.03% 0.42% 0.09% 0.67% 0.02% 0.72% 0.12% 0.54% 0.75% -3,465 m² 0.09% 0.06% -470 m² -792 m² 200 m² 0.18% 1,200 m² 0.61% 1.15% -2,717 m² -1,701 m² 1,078 m² 6.73% 4.45% 7.96% 5.34%
Slide 20: Income profile expiry
Income profile expiry Office Corporate Accommodation Retail Hospitality Light Industrial LLR1 100.00% 80.03% PERCENTAGE OF INCOME 66.33% 33.67% 31.81% 28.30% 28.58% 25.01% 19.97% 20.39% 18.56% 19.97% 19.57% 15.38% 15.32% 11.12% 10.69% 10.09% 7.76% 7.29% 6.97% 5.25% 4.56% 3.77% 3.16% 4.49% 1.60% 0.33
Slide 21: Top 15 Tenants
Top 15 Tenants (as at 31 December 2021) * Majority of portfolio income generated from strength of multinational tenancies Income Rank Tenant Industry (% of Group Total) Tenant Grading Lease Covenant Lease Currency 1 BEACHCOMBER Hospitality 11.1% OTHER GLOBAL Triple Net EUR 2 TOTAL Mining and Natural
Slide 22: Financial Review
CADS II Building GHANA Financial Review
Slide 23: Financial highlights
Financial highlights (as at 31 December 2021) 6 Months ended 6 Months ended Increase/ 31 Dec 2021 31 Dec 2020 Decrease Distributable earnings per share1 US$3.08 cps US$3.88 cps -20.6% Dividend per share US$2.50 cps US$1.50 cps +66.7% EPRA earnings per share1 US$2.56 cps US$3.09 cps -17.2% Property p
Slide 24: Loan to value (LTV)
Loan to value (“LTV”) Deleveraging and strengthening of the balance sheet is a strategic imperative in the medium term COVID-19 pandemic @ LSE Listing 2022 and Beyond 53.1% 51.4% 50.2% 50.2% 49.2% 49.3% Initiatives under consideration 43.4% 43.1% to further reduce LTV in the 41.4% 35% - 40.0% near a
Slide 25: EPRA Net Reinstatement Value evolution – HY22
EPRA Net Reinstatement Value evolution – HY22 Portfolio Performance # Other non-cash items include: ECL provisions, movement in foreign currency translation reserve, and deferred tax Ι 26
Slide 26: Key financial metrics
Key financial metrics Income producing assets (US$m), Group LTV (%), WACD (%) Revenue and Net income ($m) Interest cover (x) Revenue Comprehensive Income Group LTV WACD 24.1 23.6 24.1 2.3x 19.6 19.419.7 1,000.0 80.0% 15.3 2.1x 2.1x 2.1x 2.1x 10.3 900.0 860.1 849.2 6.4 70.0% 2.2 796.4 801.9 802.3 800
Slide 27: Debt Financing Update
Debt Financing Update – 31 December 2021 Debt reduction and Significant debt maturity extensions DEBT EXPIRY PROFILE - 31 Dec 2021 (US$m) MULTI BANK STRATEGY 47.1 140.8 2.1% 76.4 59.2 38.4 Settled in January Net 2.7% SBSA 5.8% BOC 5.5% SBM 34.2% Investec 9.8 10.1% 6.8 3.7 ABSA 2.4 0.9 0.9 0.9 0.9 0.
Slide 28: Drive In Trading (DiT) Loan Agreement Update
Drive In Trading (DiT) Loan Agreement Update The PIC and Grit are concluding negotiations on collapsing the DiT Loan agreement DIT STATUS • PIC loan to DiT, secured with 23.25m Grit shares, expires on 11 August 2022 • Grit guarantee 50% of the PIC exposure up to a maximum of US$17.5m PROPOSED RESOLU
Slide 29: Capital Commitments
Capital Commitments Upcoming Capital Commitments EUR1.2m Club Med Senegal by Aug 2022 Hospitals2 US$4.0m Redevelopment1 (EUR25 million by 2023 on phase 2 in next 12m unless renegotiated) DiT Settlement1 US$17.5m Orbit Phase 22 US$14.4m (pending approvals) equity commitment 1. To be funded from the c
Slide 30: Distributable Income
Distributable Income Distributable earnings withheld once again for the financial year ended 30 June 2021 IFRS Split from Split NCI GRIT YTD YTD Associate Economic Distributable IS earnings US$'000 US$'000 US$'000 US$'000 US$'000 12.07 12.19 12.20 Gross rental income 24,147 8,097 (3,583) 28,661 27,2
Slide 31: Statement of Financial Position
Statement of Financial Position Unaudited as at 31- Unaudited as at 30- Unaudited as at 31- 31-Dec-21 30-Jun-21 Abridged consolidated statement of financial position Dec-21 June-21 Dec-20 COMPOSITION OF INCOME PRODUCING ASSETS US$'000 US$'000 US$'000 USD'm USD'm Assets Investment properties 549.9 54
Slide 32: Statement of Comprehensive Income
Statement of Comprehensive Income Abridged consolidated statement of income statement Unaudited six months ended Unaudited six months ended 31-Dec-21 31-Dec-20 US$'000 US$'000 Gross property income 24,147 23,609 Property operating expenses (4,950) (4,037) Net property income 19,197 19,572 Other inco
Slide 33: Growth, Investment & Pipeline
ORBIT AFRICA KENYA Growth, Investment & Pipeline
Slide 34: Infrastructure Pipeline Developments
Infrastructure Pipeline Developments Focus on Infrastructure developments, namely Healthcare and Industrial in Mauritius and Kenya ORBIT AFRICA (PHASE 2) ST. HELENE CLINIC (38.35%) COROMANDEL HOSPITAL (38.35%) Target Completion Date Q4 2023 Target Completion Date Q1 2023 Target Completion Date Q1 20
Slide 35: Completed Development – Bollore Warehouse
Completed Development – Bollore Warehouse Successful completion of strategically-located industrial facility in Pemba, Mozambique Redevelopment of existing industrial facility to include new office space Project Description (c.1,470m²) and a new warehouse facility (3,540m²) Bollore Logistics took oc
Slide 36: Project Financing
Project Financing Successful project financing (>US$70M) over past half year period indicative of confidence from financiers in strength of pipeline US$25.0m ORBIT PH 1 & 2 US$31.5m ORBIT PH 1 & 2 ST HELENE CLINIC EUR12.7m ST HELENE CLINIC Ι 38
Slide 37: Strong GREA pipeline delivery
Strong GREA pipeline delivery Fully funded projects increasing exposures to data centres and embassy corporate accomodations June 2025 Further 2024 future June 2023 pipeline June 2022 Dec 2021 30 June 2021 NAV: $186 mln Ι 39
Slide 38: GREA Completed Projects
GREA COMPLETED PROJECTS LOS1.1 DATA CENTRE PROJECT, NIGERIA Week 30, 11/21 OBO, DIPLOMATIC RESIDENTIAL (US EMBASSY), ETHIOPIA METROPLEX REDEVELOPEMNT 10/21 10/21 Ι 40
Slide 39: GREA Projects Under Construction
GREA PROJECTS UNDER CONSTRUCTION ST HELENE, MAURITIUS Week 23, 15/11/21 APPOLONIA GHANA Week 19, 11/2021 FOR DELIVERY 2022 & 2023 Ι 41
Slide 40: GREA Projects Under Construction
GREA PROJECTS UNDER CONSTRUCTION THE PRECINCT, MAURITIUS Week 22, 15/11/21 OBO KENYA DIPLOMATIC HOUSING Weeks 44-56, 08/21 – 11/21 FOR DELIVERY 2022 & 2023 Ι 42
Slide 41: Sustainability
ST HELENE ARTEMIS HOSPITAL MAURITIUS Sustainability
Slide 42: Our sustainability agenda
Our sustainability agenda Grit has six major pillars that underpin our ESG strategy # MAJOR PILLARS 1 Managing our assets responsibly6, 7, 9, 11, 12, 13, 15 Designing and delivering environmentally-conscious and 2 efficient spaces6, 7, 9, 11, 12, 13, 15 3 Uplifting communities1, 2, 3, 4, 5, 14, 15 4
Slide 43: Our sustainability priorities
Our sustainability priorities - Grit has four KPIs that measure the impact of our ESG strategy 25% 25% > 40% > 65% Targets Reduction by 2025 Improvement by 2025 Women leadership positions Localised CARBON EMISSIONS BUILDING EFFICIENCY GENDER EQUALITY LOCAL REPRESENTATION • 15% reduction in • 9% redu
Slide 44: ESG 2022 focus areas
ESG 2022 focus areas • Deploy our Environmental Sustainability Management and Reporting Policy across our co-owned hospitality assets in Mauritius. • Identify and appoint an accredited consulting firm to assist with the formulation of our carbon offset strategy ENVIRONMENTAL and plan in order to rea
Slide 45: Closing remarks
ABSA HOUSE MAURITIUS Closing remarks
Slide 46: Dividend policy guidance
Dividend policy guidance USD2.50cps dividend paid for the 6 months to 31 December 2021 ➢ For the 6 months period to 31 December 2021, supported by the successful Placing and the Resumption robust operational performance, the Group has reported an LTV of 41.4% (from 53.1% at 30 of dividend June 2021)
Slide 47: Closing remarks and key focus areas
Closing remarks and key focus areas Collection focus, cost control, leasing and vacancy 1 management to protect the existing portfolio 2 Clear definition of our net zero carbon pathway Further strengthen the Group balance sheet and 3 liquidity Accelerating asset 20% recycling strategy and 4 reducing
Slide 48: Annexures
CAPITAL PLACE GHANA Annexures
Slide 49: COVID-19 Impact on Rental Collections
COVID-19 Impact on Rental Collections (Dec 2020 – Dec 2021) Continued high collection rates Total Total Corp. Light Office Retail Hospitality Jul 2020 to July 2021 Accomm Industrial Dec 2020 to Dec 2021 Contracted rent 100% 100% 100% 100% 100% 100% 100% Rent deferrals 0% (0.3%) 0% (11.2%) 0% (2.3%)
Slide 50: Corporate Awards and Accolades
Corporate Awards and Accolades Recognised for leadership, governance and compliance excellence 2020 API Top Africa Real Estate CEO SEP 2020 of the Year Award – Bronwyn Corbett (CEO) PWC (Mauritius) Corporate Reporting Awards 2020 Winner for OCT 2020 Corporate Governance– Grit Real Estate Income Grou
Slide 51: Portfolio Key Metrics – Geographic
Portfolio Key Metrics – Geographic (as at 31 December 2021) Other % Attributable to GRIT Morocco Mozambique Ghana Mauritius Kenya Zambia Botswana Senegal Total Investments Number of Properties/Investments 1 9 3 5 3 3 25 1 4 54 Grit attributed Asset Value (US$m) 77.8 296.2 41.9 160.7 33.1 86.6 25.5 2
Slide 52: Portfolio Key Metrics – Sectoral
Portfolio Key Metrics – Sectoral (as at 31 December 2021) Corporate Other % Attributable to GRIT Retail Office Light Industrial Hospitality LLR Grit Group Accommodation Investments Number of Properties/Investments 7 8 3 5 2 25 4 54 Grit attributed Asset Value (US$m) 189.0 193.0 37.7 169.3 128.3 25.5
Slide 53: EPRA Key Metrics – Sectoral & Geographic
EPRA Key Metrics – Sectoral & Geographic (as at 31 December 2021) EPRA EPRA COST RATIOS EPRA COST RATIOS IFRS EPRA VACANCY Sector GLA (m²) EPRA NIY TOPPED-UP (incl. direct (excl. direct NIY RATE NIY vacancy) vacancy) Office 52,478 7.2% 7.4% 7.3% 4.9% 11.0% 10.3% Retail 119,988 5.5% 5.6% 6.4% 12.5% 3
Slide 54: Disclaimer
Disclaimer This report has been prepared by Grit Real Estate Income Group Limited ("Grit" or the “Company”) 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 or any rights attachin
Slide 55: Thank You
THANK YOU Grit Real Estate Income Group Reg. No. C128881 T +230 269 7090 E ir@grit.group 3rd floor, La Croisette Shopping Centre, Grand Baie 30517, Mauritius Level 3, Alexander House, 35 Cybercity Ebene 72201, Mauritius
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