Grit Real Estate Income Group Limited · LSE:GR1T
Grit Real Estate Income — H1 2023 Earnings Presentation
56 slides from Grit Real Estate Income's earnings presentation, February 2023
Slide 1: HY2023 Results – From Income to Impact
FROM INCOME TO We are a family of Partnerships, Setting the Global Benchmark in Africa for Developing Smart Business Solutions & Impact Real Estate that goes Beyond Buildings! HY2023 RESULTS Six Months Ended 31 December 2022 FEBRUARY 2023 1
Slide 2: Today's venue: Environmentally Conscious Asset
Today’s venue: Environmentally Conscious Asset The Precinct in Grand Baie is the first office development in Mauritius and Indian Ocean Islands to achieve a 5-Star GBCSA Rating. 2
Slide 3: Highlights
HIGHLIGHTS 8
Slide 4: HY23 Snapshot: Key Themes
HY23 Snapshot: Key Themes Recovery continues in HY2023 amidst large refinance and interest rate risk hedging SIGNIFICANT STRONG BALANCE SHEET CORPORATE OPERATIONS IMPROVING ACTIVITY • Significant leasing activity (retail • Increased interest in GREA** • Stabilised balance sheet and office) to 35.01%
Slide 5: HY2023 Highlights & Trends
HY2023 Highlights & Trends (31 December 2022) Solid operational performance and recovering financial positions post pandemic Total Income Net Operating Income EPRA (+0.8PPT) Occupancy Rental Collection Producing Assets1 (incl. Associates)2 rate3 Rates4 US$832.8M US$29.6M 95.7% 108.4% (-2.8%) (+9.1%)
Slide 6: Acquisitions, Valuation and Forex and portfolio performance
Acquisitions, Valuation and Forex and portfolio performance Inclusive of Associates and GREA associates (DH Kenya and DH Ethiopia) Property performance for 6 months (June Reported Total Property Value move (June to Dec 2022) EPRA 22 to Dec 22)* Forex % Balance Total 6M Like-4-like NOI NOI Growth Cas
Slide 7: Asset Recycling Strategy
Asset Recycling Strategy Grit targets to dispose c.20% of its portfolio by December 2023 (US$160m of asset value). Mature and Non-Core assets (retail & hospitality) targeted for sale and recycling into IMPACT sectors Benefit 1: Benefit 2: Benefit 3 : Independent Short term Opportunity to asset valua
Slide 8: Asset Recycling Update
Asset Recycling Update The Group continues to progress its Asset Recycling Strategy (non-core/mature assets) in favour of reducing debt. ABSA HOUSE ORBIT LLR* BHI** • June 2022 at US$12.2m WAREHOUSE • June 2022 - 4.9% interest • December 2022 – Special property value (6.9% • July’22 - LLR* became a
Slide 9: GREA & APDM Acquisition Update
GREA & APDM Acquisition Update The acquisitions from Gateway Partners occur in 3 phases, securing a pathway to control Grit acquired a 77.95% controlling stake in APDM**, the external manager. PHASE 1 (15 April 2022) of GREA* and lifted its direct interest in GREA from 19.98% to 26.29%. Settled in c
Slide 10: Drive In Trading (DiT) Guarantee Unwind
Drive In Trading (DiT) Guarantee Unwind Execution of the structure’s unwind expected in Q2 2023. DiT HISTORIC STATUS – approved by shareholders in June 2017 • Grit guaranteed 50% of the PIC exposure up to a maximum of US$17.5m • PIC loan to DiT, secured with 23.25m Grit shares, facility expired Augu
Slide 11: Portfolio & Operations Overview
PORTFOLIO & OPERATIONS OVERVIEW 11
Slide 12: 60 Assets in 12 territories across Africa
We are MOROCCO (8.4%) AnfaPlace Mall BOTSWANA (1.8%) 18% interest in LLR Pan-African SENEGAL (3.0%) Club Med Cap Skirring MOZAMBIQUE (37.8%) Commodity House Phase I Resort KPMG/Hollard Building 60 Assets Vodacom Building GHANA (6.5%) Zimpeto Square Capital Place VDE Housing Estate in 12 territories
Slide 13: High Quality Tenants with long term leases
High Quality Tenants with long term leases Our Tenants Income Lease Rank Tenant Industry Lease Currency (% of Group Total) Covenant 1 VULCAN Mining and Natural Resources 9.4% Gross USD 2 TOTAL Mining and Natural Resources 9.4% Gross USD 3 US EMBASSY Consular 8.7% Gross USD 4 VODACOM Communications 6
Slide 14: Group EPRA Vacancy Bridge (31 December 2022)
Group EPRA* Vacancy Bridge (31 December 2022) EPRA vacancy excl retail Retail Office Corporate Accommodation Light Industrial 1.04% 31 Dec 2022 NOTES *- European Public Real Estate Association Vacancy methodology
Slide 15: EPRA excl. retail Vacancy Bridge
EPRA* excl. retail Vacancy Bridge (31 December 2022) 0.00% Good leasing activity in Office sector 0.08% Office Corporate Accommodation LLR Data Centre 0.52% six months to 31 Dec 2022 1.07% 0.7… 0.00% Office: 0.01% 0.13% Ø Commodity House 1 lease -740 0.00% 0.07% m² 0.22% 0.00% 0.0… extended (Total)
Slide 16: EPRA Vacancy Bridge - retail
EPRA* Vacancy Bridge - retail (31 December 2022) Retail significant leasing: Ø AnfaPlace Mall: Hudson Group lease Ø Cosmopolitan Mall - various leases Ø Kafubu – various leases NOTES *- European Public Real Estate Association Vacancy methodology
Slide 17: Income Profile Expiry
Income Profile Expiry Long duration lease contracts PROFILE OF INCOME EXPIRY Including LLR 100.00% WALE 4.6 years PERCENTAGE OF INCOME 64.06% 55.89% significant expiries beyond 60 months 43.35% 35.94% 35.54% 32.15% 27.53% 25.80% 25.12% 24.78% 22.95% 22.02% 19.02% 16.56% 15.61% 14.48% 14.35% 13.85% 1
Slide 18: Construction Projects Update
Construction Projects Update GREA continues to make good progress on de-risked developments KENYA - DH3 (ROSSLYN GROVE) MAURITIUS – THE PRECINCT MAURITIUS – CUREPIPE HOSPITAL MALI - DH4* • Delivery Date: July 2022 • Delivery Date: March 2023 • Delivery Date: March 2023 • Delivery Date: Q4 2025 • GLA
Slide 19: Financial Review
FINANCIAL REVIEW 19
Slide 20: Financial highlights (as at 31 December 2022)
Financial highlights (as at 31 December 2022) 6 Months ended 6 Months ended Increase/ 31 December 2022 31 December 2021 Decrease Adjusted EPRA* earnings per share US$1.02 cps US$1.80 cps (43.3%) Distributable earnings per share US$2.56 cps US$3.08 cps (16.9%) Dividend per share US$2.00 cps US$2.50 c
Slide 21: Acquisitions, Valuation and Forex and portfolio performance
Acquisitions, Valuation and Forex and portfolio performance Inclusive of Associates and GREA associates (DH Kenya and DH Ethiopia) Foreign Additions & Non cash Revenue Other Leasing Revenue exchange M&A (lease Recoveries HY2022 income activities HY2023 movement incentives etc) USD'000 USD'000 USD'00
Slide 22: Key Financial Metrics
Key Financial Metrics Income producing assets (US$m), Group LTV (%), WACD (%) Admin cost to asset value (%) Interest cover (x) Group LTV 2.3x 2.2% 2.1x 2.1x 2.1x 2.0x 1,000.0 80.0% 2.1% 1.9x 900.0 860.1 849.2 1.6% 1.6% 832.8 70.0% 1.5% 796.4 802.4 1.3% 800.0 60.0% 700.0 53.1% 642.3 49.3% 45.5% 50.0%
Slide 23: Interest Rate Risk Management
Interest Rate Risk Management HY2023 finance costs have materially increased as a result of global interest rate hikes GROUP WACD ALL DEBT -Interest Rate sensitivities (incl. hedges) WACD Change Cash WACD 8.20% CURRENT 8.1% 0.0% 7.5% 8.10% +200BPS 9.0% 0.9% 8.4% 7.70% +100BPS 8.5% 0.5% 7.9% +50BPS 8
Slide 24: Sustainability-linked Debt Refinance (October 2022)
Sustainability-linked Debt Refinance (October 2022) Largest Syndicated Sustainability-Linked Real Estate Debt Facility in Sub-Saharan Africa Up to US$306 million sustainability-linked term loan and revolving credit facility. Debt facility covers GRIT’s assets and debt facilities in Mozambique, Zambi
Slide 25: Distributable Income
Distributable Income Distributable earnings and dividends paid. IFRS YTD Extracted GRIT Split NCI GRIT YTD from Proportionate Economic IS Distributable Associates Income earnings statement 12.15 12.28 12.29 US$'000 US$'000 US$’000 US$'000 US$'000 US$'000 11.75 Gross rental income 26,914.0 7,340.0 34
Slide 26: EPRA Net Reinstatement Value Evolution – HY23
26 Ju n e2 Ju n 02 60.0 65.0 70.0 80.0 85.0 90.0 e2 2a 02 s re 65.0 70.0 75.0 75.080.0 85.0 90.0 2a po s re rte po d- r IF R De te d - S 70.0 ri v De ati IFRS ve 70.0 ri v fi n ati an ve cia fi n l… De ancia fe r l … (0.4) De re d fe r Tax (0.4) NOTES re d on Tax Pro on pe E P ro p P rti e s 9.8 R A
Slide 27: Strategy Update
STRATEGY UPDATE 27 27
Slide 28: Our Business Principals and Activities
Unlocking value for all our stakeholders, including the people of Africa CORE PRINCIPLES CORE ACTIVITIES DEEP LOCAL & INTERNATIONAL PROPERTY INVESTMENT RELATIONSHIPS (in completed, income Powerful and long lasting relationships producing assets) resulting in consistent delivery STRONG TENANTS Risk m
Slide 29: Grit 2.0 Executive Summary
Grit 2.0 Executive Summary Grit is a London listed specialist in African Impact real estate. The Group invests in, develops and creates smart solutions in resilient property sectors across the continent for its multinational clients, tenants and investors. Since inception in 2014, the pioneering Gro
Slide 30: GRIT 2.0 Strategy
GRIT 2.0 Strategy Specialist in African Impact Real Estate Publicly Listed Entity GR1T.LN PROPERTY INVESTING * REAL ESTATE SERVICES • Grit owned properties • Development Management • Co-owned properties (GREA, NOI • Facilities and Asset & management services Fees LLR) NAV • New Sector specialist fun
Slide 31: Dividend Policy Guidance
Dividend Policy Guidance Annualised dividend yield US$2.00cps interim dividend c12.5% calculated on guided full year dividend at current share price • Distribute at least 80% of distributable earnings, generated out of net operating income Dividend Policy from existing property assets. & Guidance •
Slide 32: ESG Overview
ENVIRONMENTAL SOCIAL GOVERNANCE Premium Listed on the London Stock NEW Gender equality: Exchange +40% DEVELOPMENTS according to IFC* of women employees in leadership positions Compliance with the UK Corporate Governance Code (2018) 14% reduction in electricity National Code of Corporate Governance u
Slide 33: Closing Remarks & Key Focus Areas
Closing Remarks & Key Focus Areas Collection focus, cost control, leasing and vacancy management to protect the existing portfolio 01 Clear definition of our net zero carbon pathway and attainment of ESG targets 02 Accelerating asset 20% recycling strategy and reducing exposure to retail sector & no
Slide 34: We Are Proudly
WE ARE PROUDLY More than 40% Achieved 45% 80% of our Above 48% of of women employees of women Development overall Grit staff are in leadership employed occupy Managers are women positions managerial women positions 33% 1:1 Gender Proud partnership Active contributors to of Board members Pay ratio (e
Slide 35: Beyond Buildings Impacting the Economy & Communities
Beyond Buildings Impacting the Economy & Communities MAURITIUS KENYA ETHIOPIA Workforce growth from Inception BuildHer US$10 000 421% (from 14 to 73) US$40 000 Covid support 52 470 30 women 90 locally local in a 12 month building skills employed suppliers development programme local people employed
Slide 36: Annexures
ANNEXURES 36 36 36
Slide 37: Grit 2.0 C-Suite Management
Grit 2.0 C-Suite Management Chief Executive Officer GREA Managing director GREA Chief Financial Officer Chief Finance Officer Chief Investment Officer
Slide 38: Shareholder Base Evolution
38 54.59 27.50 01/20 54.73 27.77 54.73 27.88 03/20 54.72 27.90 54.72 27.88 05/20 55.56 27.88 69.09 30.91 07/20 69.08 30.92 69.08 30.92 Successful JSE* De-listing 09/20 68.27 31.73 68.27 31.73 11/20 65.18 34.82 Shareholder Base Evolution 65.22 34.78 01/21 65.04 34.96 64.98 35.02 03/21 65.12 34.88 65.
Slide 39: Hospitality Sector: Improving Outlook
Hospitality Sector: Improving Outlook Hospitality recovered well in Mauritius and Senegal, with strong forward bookings • Deferred COVID rentals fully repaid in Q3 2022 BEACHCOMBER • Grit’s interest has been reduced from 44.42% to 27.01% after receipt of EUR14.9mln special dividend • SALE?? • 82% oc
Slide 40: Retail Sector Update
Retail Sector Update Retail pressure abating with strong letting activity across the portfolio with major tenants. AnfaPlace enjoying strong increases in footfall. ZAMBIA – KAFUBU, MUKUBA & MOROCCO – ANFAPLACE MALL COSMOPOLITAN MALL • Additional leases concluded for Hudson • Malls performing very we
Slide 41: Office Sector Update
Office Sector Update Mozambique has remained resilient while the Ghanaian office market is showing signs of re-leasing risks, although Grit has successfully filled vacated space. GHANA MOZAMBIQUE MAURITIUS • Bulk of revenue decline related to non- • Stable market outlook • Strong demand for high qua
Slide 42: Upcoming Capital Commitments
Upcoming Capital Commitments Club Med Senegal • EUR1.2m by August 2022 Upgrade • EUR9m in 2023 Club Med Senegal • EUR16m April - November 2024 Expansion DIT Settlement • US$17.5m (pending final regulatory approvals) • Phase 3 subject to Grit’s option GREA Acquisition Phase III • US$34.1m cash paymen
Slide 43: Animal welfare NGO partnership (All Life Matters)
A Mauritian animal welfare NGO that runs a veterinary clinic focussing on sterilisation of dogs and cats as the solution to managing the overpopulation of these animals in Mauritius, together with educating people on being responsible pet owners. All Life Matters also runs an animal sanctuary that p
Slide 44: Nurturing and Building Local Talent
44 Nurturing and Building Local Talent Our Family of Partnerships include ambassadors that share our believe that with guts, resilience, innovation and tenacity one will always Find Surprise Maphumulo the Way. It is our privilege to play a Surfer part in the pursuit of their passions and the many li
Slide 45: BuildHer women empowerment partnership
• As a women-led team, we understand the impact of females in the workplace. To empower disadvantaged women in Kenya, we have partnered the NGO BuildHer to sponsor female cohorts to undergo intensive training within the built environment. In addition to artisanal skills, these women also obtain fina
Slide 46: Statement of Financial Position
Statement of Financial Position ABRIDGED CONSOLIDATED STATEMENT OF Unaudited as at Audited as at Unaudited as at 31-Dec-22 30-Jun-22 FINANCIAL POSITION Composition of Income Producing Assets 31-Dec-22 30-Jun-22 31-Dec-21 US$'m US$'m US$'000 US$'000 US$'000 Assets Investment properties 609 604.5 Inve
Slide 47: Statement of Comprehensive Income
Statement of Comprehensive Income CONSOLIDATED STATEMENT OF INCOME Audited for the year ended Audited for the year ended STATEMENT 31-Dec-22 31-Dec-21 US$'000 US$'000 Gross property income 26,914 24,147 Property operating expenses (4,797) (4,950) Net property income 22,117 19,197 Other income 120 56
Slide 48: Corporate Awards & Accolades
Corporate Awards & Accolades Recognised for leadership, governance and compliance excellence. EPRA 2021 Best Practices First Mauritius-domiciled Recommendations 2018 SEP 2021 company listed on London Stock Compliance Bronze Award Exchange EY World Entrepreneur Award API Best Commercial Office 2019 (
Slide 49: GRIT Portfolio Snapshot
GRIT Portfolio Snapshot Kafubu Mall Cosmopolitan Mall Tamassa Resort Cannonier Beachcomber Resort & Spa Mauricia Beachcomber Victoria Beachcomber Club Med Cap Skirring Bollore Warehouse Resort & Spa Resort & Spa Imperial Warehouse Orbit Africa VDE Housing Estate Acacia Estate 49
Slide 50: GREA Portfolio Snapshot
GREA Portfolio Snapshot Acacia Estate Halliburton Anfaplace Mall Metroplex Mall Elevation Diplomatic Africa Data Center Lagos Rosslyn Grove The Precinct Residences Artemis Curepipe Hospital Adumuah Place Artemis Coromandel Hospital Diplomatic Housing Mali 50
Slide 51: African Property Development Managers (APDM)
AFRICAN PROPERTY DEVELOPMENT MANAGERS (“APDM”) A SPECIALIST PROVIDER OF WORLD CLASS TURN-KEY REAL ESTATE DEVELOPMENT PROJECTS ACROSS THE AFRICAN CONTINENT 51
Slide 52: APDM Development Pipeline
COMPLETED PROJECTS UNDER CONSTRUCTION APPROVED US$700m MOROCCO AnfaPlace Mall PIPELINE Pure Data Centers Development & Extended Pipeline MALI 12 DH Mali SENEGAL African Countries Club Med Senegal ETHIOPIA NIGERIA Elevation Africa Data Centre $237.1m GHANA Net Asset Value as at Dec Adumuah Place UGAN
Slide 53: Portfolio Key Metrics – Sectoral
Portfolio Key Metrics – Sectoral (as at 31 December 2022) Corporate % Attributable to GRIT Office Retail Hospitality Light Industrial Data Centre Medical LLR Total Accommodation Number of Properties/Investments 10 5 8 5 5 1 1 25 60 Grit attributed Asset Value (US$m) 211.94 157.28 198.67 129.17 80.89
Slide 54: Portfolio Key Metrics – Geographic
Portfolio Key Metrics – Geographic (as at 31 December 2022) % Attributable to GRIT Ghana Mauritius Mozambique Morocco Kenya Senegal Zambia Botswana Uganda Ethiopia Nigeria Mali * Number of Properties/Investments 4 6 10 1 6 1 3 25 1 1 1 1 60 Grit attributed Asset Value (US$m) $52.26 $120.67 $305.15 $
Slide 55: 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 56: Thank You
THANK YOU T +230 269 7090 | E ir@grit.group Unity Building, The Precinct, M2 Junction, B11 Fond du Sac Road, Grand Baie, 31301 Mauritius
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