Grit Real Estate Income Group Limited · LSE:GR1T
Grit Real Estate Income — FY2022 Earnings Presentation
67 slides from Grit Real Estate Income's earnings presentation, October 2022
Slide 1: FY2022 Results
FY2022 RESULTS For the Twelve Months Ended 30 June 2022 OCTOBER 2022
Slide 2: Contents
Contents Introduction Highlights Portfolio & Operations Overview Financial Review Strategy Update Annexures Chief Executive Officer BCom (Acc), CA(SA) • 2019 EY Entrepreneur of the Year Award Winner (Exceptional Chief Finance Officer Category, Southern Africa) Bcompt (Hons), CA(SA) • 2015 Top CA(SA)
Slide 3: Grit Magic
Grit Magic We have the GRIT to go where others fear to go. We’re pioneers, people centered, proudly African & woman led. We’re powered by purposeful impact through authentic partnerships. We’re a diverse team of spirited warriors, impassioned by the challenge of developing smart, sustainable busines
Slide 4: 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 positions women 33% 1:1 Gender Proud partnership Active contributors to of Board members Pay ratio (e
Slide 5: From Income to Impact
FROM INCOME TO We find opportunity deploying our Africa real estate expertise and experience to drive positive social and environmental change. Our solutions transcend just the buildings to benefit all current stakeholders and generations to come. 5
Slide 6: 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 7: Environmental Social Governance
ENVIRONMENTAL SOCIAL GOVERNANCE NEW Gender equality: National Code of Corporate Governance for DEVELOPMENTS +40% Mauritius 2016 according to IFC* of women employees in leadership positions 14% reduction in electricity Premium Listed on the London Stock Exchange usage, 17% reduction in water 77% usag
Slide 8: Highlights
Rosslyn Grove, Kenya HIGHLIGHTS 88
Slide 9: Environmentally Conscious Assets
Environmentally Conscious Assets The Precinct in Grand Baie is the first office development in Mauritius and Indian Ocean Islands to achieve a 5-Star GBCSA Rating. 9
Slide 10: FY22 Snapshot: Key Themes
FY22 Snapshot: Key Themes Strong cash collection and reduced LTV have paved the way for the Group to reinstate dividends in FY2022 SIGNIFICANT STABILISED BALANCE SHEET CORPORATE ACTIVITY OPERATIONS IMPROVING • Operations have continued to • Stabilized balance sheet & reduced • APDM* & GREA** acquisi
Slide 11: FY2022 Highlights & Trends
FY2022 Highlights & Trends (30 June 2022) Solid operational performance and recovering financial positions post pandemic US$856.7M +3.5% 95.3% 92.8% (+6.8%) (+0.6PPT) (+0.3PPT) Portfolio performing Valuations stabilising Vacancy improving Total Income Net Operating EPRA Occupancy Improving liquidity
Slide 12: Asset Recycling Strategy
Asset Recycling Strategy At the time of its FY21 Results Release, Grit undertook to dispose c.20% of its current portfolio by December 2023 (US$160m of assets). By October 2022, Grit has disposed of c.US$28.2m, which equates to 3.5% of its c.20% target and remains on track to achieve its target. Ben
Slide 13: 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 LLR* ORBIT WAREHOUSE ANFAPLACE MALL • 4.9% interest disposed of in June • Introduced LLR* as a 30% co- • Targeted for disposal • Concluded in June 2022
Slide 14: Shareholder Base Evolution
Shareholder Base Evolution Successful JSE* De-listing Capital Raise with issue of shares LSE** holders 27.50 27.77 27.88 27.90 27.88 27.88 30.91 30.92 30.92 31.73 31.73 34.11 34.11 34.07 34.07 34.07 34.78 34.82 34.88 34.88 34.96 34.97 35.02 have steadily 36.10 36.20 36.28 37.39 37.43 37.43 37.43 inc
Slide 15: Portfolio & Operations Overview
PORTFOLIO & OPERATIONS OVERVIEW 15 The Precinct, Mauritius
Slide 16: 59 Assets in 12 Territories Across Africa
We are MOROCCO (6.0%) AnfaPlace Mall BOTSWANA (2.9%) 25.1% interest in LLR Pan-African SENEGAL (2.9%) Club Med Cap Skirring MOZAMBIQUE (36.7%) Commodity House Phase I Resort KPMG/Hollard Building 59 Assets Vodacom Building GHANA (6.3%) Zimpeto Square Capital Place VDE Housing Estate in 12 territorie
Slide 17: High Quality Tenants & Long Term Leases
We Have High Quality Tenants & Long Term Leases * Key lease Portfolio attributes Robust blue-chip multinational tenant base, backed by guarantees USD / EURO denominated leases Inflation Linked lease escalations Parent Office guarantees & support 17
Slide 18: Top 15 Tenants
Top 15 Tenants1 (as at 30 June 2022) * Majority of portfolio income generated from strength of multinational tenancies. Income Rank Tenant Industry Tenant Grading Lease Covenant Lease Currency (% of Group Total) 1 TOTAL Mining and Natural Resources 9.8% FORBES Gross USD 2 BEACHCOMBER Hospitality 9.7
Slide 19: EPRA Vacancy Bridge
EPRA* Vacancy Bridge (30 June 2022) Retail: Decrease as a result of Anfaplace Shopping Center Buffalo Mall Mall de Tete Building Commodity House PH1 Zimpeto Square Metroplex Shopping Mall Cosmopolitan Mall Other successful take ups in Buffalo Mall by Chandarana and various leasings in AnfaPlace. 0.5
Slide 20: Hospitality Sector: Improving Outlook
Hospitality Sector: Improving Outlook Hospitality recovering well in Mauritius and Senegal, with strong forward bookings and a recovery in tourist arrivals. Club Med Cap Skirring set for refurbishment and expansion in 2023 and 2024 respectively. • All hotels open & trading with an average of >78% oc
Slide 21: 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 22: Light Industrial Sector Update
Light Industrial Sector Update Robust Light Industrial portfolio performing well. Bollore Warehouse redevelopment delivered in the year and Orbit Africa acquisition completed (redevelopment commencing November 2022). KENYA – ORBIT WAREHOUSE MOZAMBIQUE – BOLLORE • Acquisition completed March 2022 WAR
Slide 23: Corporate Accommodation Sector Update
Corporate Accommodation Sector Update Increasing exposure to Corporate Accommodation via Grit’s subsidiary Gateway Real Estate Africa, with DH1* Ethiopia and DH3* Kenya completed on time and on budget for key strategic tenant US Embassy (OBO). MOZAMBIQUE - ACACIA ESTATE ETHIOPIA - DH1 (ELEVATION) KE
Slide 24: Corporate Accommodation Sector Update
Corporate Accommodation Sector Update VDE* Housing Compound valuation continued to see valuation pressure (US$2.4m valuation decline or 4.1%). Grit is engaging with the mines new owners about the real estate requirements in a materially undersupplied region. MOZAMBIQUE - VDE* ESTATE • 100% Occupancy
Slide 25: 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 26: Alternative Sector Update
Alternative Sector Update Increasing exposure to alternative ‘futureproof’ sectors, namely Data Centres and Healthcare in Nigeria and Mauritius, delivered via increased shareholding in GREA, with further secured alternative assets in the pipeline. ADC Nigeria | Africa Data Centres Artemis Curepipe H
Slide 27: Income Profile Expiry
Income Profile Expiry VDE Housing Compound (Corporate Accommodation) represents the largest income expiry risk in the next 24 months 100.00% 72.51% 71.95% PERCENTAGE OF INCOME 66.88% 33.38% 31.44% 27.49% 24.41% 23.25% 20.18% 20.04% 18.53% 17.80% 17.43% 16.85% 16.10% 14.86% 11.74% 9.59% 9.47% 9.05% 8
Slide 28: Financial Review
FINANCIAL REVIEW 28 28 Adumuah Place, Ghana
Slide 29: Financial Highlights
Financial highlights (as at 30 June 2022) 12 Months ended 12 Months ended Increase/ 30 June 2022 30 June 2021 Decrease Adjusted EPRA* earnings per share1 US$3.13 cps US$4.91 cps (36.3%) Distributable earnings per share1 US$5.01 cps US$5.97 cps (14.8%) Dividend per share US$4.50 cps US$1.50 cps +200%
Slide 30: Distributable Income
Distributable Income Distributable earnings and dividends paid. Grit GRIT YTD Split from Split IFRS YTD Proportionate Economic Distributable Associate NCI I/S I/S earnings 12.07 12.19 12.20 11.75 US$'000 US$'000 US$'000 US$'00 US$'000 US$'000 0 Gross property income 50,766 16,613 67,379 (7,030) 60,3
Slide 31: Acquisitions, Valuation and Forex
Acquisitions, Valuation and Forex Valuation impacts stabilising after significant impacts in 2020 and 2021 TOTAL INCOME Property PRODUCING ASSETS Reported Total Value move (incl additions) FY2022 % move EPRA Portfolio 18M % 12M % Fair value* US$856.7m US$801.9m 31 Dec’19 to Jun'21 to 30 Balance Fore
Slide 32: NOI Stabilising Recovering
NOI Stabilising Recovering Retail recovering off a low base, acquisitions boost light industrial • Office market affected by Ghana tenant rotations. NOI drop relates to non-repeating tenant exit fee in prior year. Mozambique leasing activity encouraging, which continued Revenue Net Operating Income
Slide 33: EPRA Net Reinstatement Value Evolution – FY22
EPRA Net Reinstatement Value Evolution – FY22 Equity Dilution NOTES *- International Financial Reporting Standards ** - European Public Real Estate Association 33 *** - Non-Controlling Interest
Slide 34: Sustainability-linked Debt Refinance (October 2022)
Sustainability-linked Debt Refinance (October 2022) Grit concluded the largest Syndicated Sustainability-Linked Real Estate Debt Facility in Sub-Saharan Africa* with Standard Bank South Africa in mid October 2022. Up to US$306 million sustainability-linked term loan and revolving credit facility. De
Slide 35: Debt Financing Update
Debt Financing Update (Post October 2022 Syndication) Debt reduction and Significant debt maturity extensions. MULTI BANK STRATEGY DEBT HEDGING STRATEGY The Group currently has interest rate 0% 0% swaps and collars over notional debt 1% 0% SBSA* Syndication exposures of US$100 million that expire 3%
Slide 36: Market Risk Management
Market Risk Management Interest Rate risk Group transitions from LIBOR to SOFR with refinance Existing hedges Post refinance - % of int bearing borrowings US$100 million of notional interest rate USD 95.6% on EURIBOR or Libor hedges 4.4% on LIBOR* SOFR* US$18.8m US$408.5m New hedges US$100 million o
Slide 37: Loan to Value (LTV)
Loan to Value (“LTV”) Deleveraging and strengthening of the balance sheet is a strategic imperative in the medium term. (Property Valuation Analysis) COVID-19 pandemic @ LSE Listing 2022 and Beyond Initiatives under consideration to further 51.4% 50.2% 53.1% reduce LTV in the near and 46.7% medium t
Slide 38: Key Financial Metrics
Key Financial Metrics Income producing assets (US$m), Group LTV (%), WACD (%) Revenue and Net income ($m) Interest cover (x) Revenue Comprehensive Income Group LTV WACD 48.5 49.2 50.8 2.4x 900.0 856.7 80.00% 33.225.7 43.6 30 2.1x 2.1x 1.8x 1.8x 825.2 823.5 1.6 801.9 800.0 70.00% (63.1) (54.3) 700.0
Slide 39: Drive In Trading (DiT) Loan Agreement Update
Drive In Trading (DiT) Loan Agreement Update The PIC* and Grit have agreed to the collapsing of the DiT guarantee agreement. DiT HISTORIC STATUS • PIC loan to DiT, secured with 23.25m Grit shares, facility expired August 2022 • Grit guarantee 50% of the PIC exposure up to a maximum of US$17.5m Notes
Slide 40: Upcoming Capital Commitments
Upcoming Capital Commitments Club Med Senegal • EUR1.2m by August 2022 Redevelopment • EUR25m by 2024 • US$16m inclusive of VAT (expected) Orbit Africa Phase II • To be completed by April 2024 DIT Settlement • US$17.5m (pending approvals) • US$19.4m settled in August 2022 GREA Acquisition Phase II &
Slide 41: Strategy Update
STRATEGY UPDATE 4141
Slide 42: Our Business Model
Our Business Model 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 resulting in producing assets) consistent delivery ST
Slide 43: Holistic Solution to the Real Estate Needs of Clients
Holistic Solution to the Real Estate Needs of Clients Across the African Continent Group Exposure to Africa by Company Publicly GR1T.LN Listed Entity Development Head Office Support Real Estate Management Functions (Asset Management) Management (APDM*) 77.95% Existing Grit owned Co-Investment platfo
Slide 44: GREA APDM Acquisition Update
GREA APDM Acquisition Update Post lower than targeted equity raise, the acquisition from Gateway Partners was reshaped into 3 phases, locking in pathway to control Grit acquired a 77.95% controlling stake in APDM**, the external manager PHASE 1 of GREA* and lifted its direct interest in GREA from 19
Slide 45: GREA Project Delivery
GREA Project Delivery Fully funded projects increasing exposures to data centres and embassy corporate accommodations. AFRICA DATA CENTRES THE PRECINCT ADUMUAH PLACE ST HELENE CLINIC Location: Lagos, Nigeria Location: Grand Baie, Location: Appolonia City, Location: Curepipe, Mauritius Mauritius Ghan
Slide 46: Dividend Policy Guidance
Dividend Policy Guidance USD4.50cps dividend paid for financial year to 30 June 2022 • Declared a US$4.50cps dividend per share for FY2022, comprised of US$2.50cps in first half and final US$2.00cps final dividend Resumption of • Implies 12.67% dividend yield on current share price Dividend • Board
Slide 47: Closing Remarks & Key Focus Areas
Closing Remarks & Key Focus Areas Collection focus, cost control, leasing and vacancy management to protect the existing portfolio 01 Clear definition of our net zero carbon pathway and attainment of ESG targets 02 Accelerating asset 20% recycling strategy and reducing exposure to retail sector & no
Slide 48: Annexures
Artemis Curepipe Hospital, Mauritius ANNEXURES 48 48
Slide 49: ALM is currently home to
A Mauritian animal welfare NGO that runs a veterinary clinic focussing on sterilisation of dogs and cats as the solution to managing the overpopulation of these animals in Mauritius, together with educating people on being responsible pet owners. All Life Matters also runs an animal sanctuary that p
Slide 50: Nurturing and Building Local Talent
50 Nurturing and Building Local Talent Our Family of Partnerships include ambassadors that share our believe that with guts, resilience, innovation and tenacity one will always Find the Surprise Maphumulo Way. It is our privilege to play a part in Surfer the pursuit of their passions and the many li
Slide 51: Empowering women through BuildHer
• As a women-led team, we understand the impact of females in the workplace. To empower disadvantaged women in Kenya, we have partnered the NGO BuildHer to sponsor female cohorts to undergo intensive training within the built environment. In addition to artisanal skills, these women also obtain fina
Slide 52: Statement of Financial Position
Statement of Financial Position Audited as at 30-June Audited as at 30-June CONSOLIDATED STATEMENT OF FINANCIAL POSITION 2022 2021 2022 2021 Composition of Income Producing Assets US$'000 US$'000 US$'m US$'m Assets Investment properties 604.5 549.5 Non-current assets Investment property included wit
Slide 53: Statement of Comprehensive Income
Statement of Comprehensive Income CONSOLIDATED STATEMENT OF INCOME STATEMENT Audited for the year ended Audited for the year ended 30-Jun-22 30-Jun-21 US$'000 US$'000 Gross property income 50,766 49,217 Property operating expenses (8,656) (8,543) Net property income 42,110 40,674 Other income 80 169
Slide 54: Single asset platform in 2014 evolved into an internationally recognised group
Single asset platform in 2014 has evolved into an internationally recognised real estate investment group with an Africa focus 2014 4 employees, all South Operating from South Two assets valued at US$140 Operating in two countries JSE Alt-X listed (fledgeling board) African Africa million VS 2022 12
Slide 55: Corporate Awards & Accolades
Corporate Awards & Accolades Recognised for leadership, governance and compliance excellence. First Mauritius-domiciled company listed on London Stock 2018 Exchange EY World Entrepreneur Award (Exceptional Category) Bronwyn Knight 2019 2020 API Top Africa Real Estate CEO of the Year Award – SEP 2020
Slide 56: Corporate Awards & Accolades (Cont.)
Corporate Awards & Accolades (Cont.) Recognised for leadership, governance and compliance excellence. AIFA Awards Best Growing International Company – Grit JAN 2021 Real Estate Income Group EPRA 2021 Best Practices Recommendations Compliance Bronze SEP 2021 Award – Grit Real Estate Income Group SEP
Slide 57: Corporate Awards & Accolades (Cont.)
Corporate Awards & Accolades (Cont.) Recognised for leadership, governance and compliance excellence. SEP 2022 API Best High-End Residential Development - Rosslyn Grove SEP 2022 API Top Woman in Real Estate - Shevira Bissessor 57
Slide 58: 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 58
Slide 59: GREA Portfolio Snapshot
GREA Portfolio Snapshot Acacia Estate Halliburton Anfaplace Mall Metroplex Mall Elevation Diplomatic Residences Africa Data Center Lagos Rosslyn Grove The Precinct Artemis Curepipe Hospital Adumuah Place Artemis Coromandel Hospital Diplomatic Housing Mali 59
Slide 60: About GREA
About GREA Gateway Real Estate Africa was founded in 2018 as a private real estate development company with a permanent capital structure resident in Mauritius. It specializes in the turnkey construction of commercial real estate for multinational corporates and retailers who can enter into US dolla
Slide 61: GREA Completed Projects and Development Pipeline
COMPLETED PROJECTS UNDER CONSTRUCTION APPROVED US$700m MOROCCO AnfaPlace Mall PIPELINE Pure Data Centers Development & Extended Pipeline MALI 12 SENEGAL Club Med Senegal DH Mali African Countries ETHIOPIA NIGERIA Elevation Africa Data Centre $237.1m GHANA Adumuah Place Net Asset Value as at Dec UGAN
Slide 62: African Property Development Managers (APDM)
AFRICAN PROPERTY DEVELOPMENT MANAGERS (“APDM”) A SPECIALIST PROVIDER OF WORLD CLASS TURN-KEY REAL ESTATE DEVELOPMENT PROJECTS ACROSS THE AFRICAN CONTINENT 62
Slide 63: Portfolio Key Metrics – Geographic
Portfolio Key Metrics – Geographic (as at 30 June 2022) % Attributable to GRIT Ghana Mauritius Mozambique Morocco Kenya Senegal Zambia Botswana Uganda Ethiopia Nigeria Mali TOTAL Number of Properties/Investments 4 6 10 1 5 1 3 25 1 1 1 1 59 Grit attributed Asset Value (US$m) 51.3 151.3 301.1 71.5 76
Slide 64: Portfolio Key Metrics – Sectoral
Portfolio Key Metrics – Sectoral (as at 30 June 2022) Corporate % Attributable to GRIT Office Retail Hospitality Light Industrial Data Centre Medical LLR* TOTAL Accom. Number of Properties/Investments 10 4 8 5 5 1 1 25 59 Grit attributed Asset Value (US$m) 206.9 134.7 197.4 164.6 73.7 6.8 3.1 20.9 8
Slide 65: Glossary
Glossary The group presents certain alternative performance measures on the face of the income statement. These are non IFRS measures and supplement the IFRS information presented but uses industry-wide accepted EPRA best practice metrics. For further information please visit this link. A key measur
Slide 66: 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 67: Thank You
THANK YOU 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 OCTOBER 2022
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