The Government Employees Pension Fund (GEPF) has identified London-listed Grit Real Estate Income Group’s development subsidiary, Gateway Real Estate Africa (GREA), as a strategic platform for its rest-of-Africa real estate investments.
In addition, the GEPF, represented by the Public Investment Corporation of South Africa (PIC), injected US$48.5 million of cash equity as part of a US$100 million recapitalisation of GREA and appointed Zwethu Msindo as a representative to GREA’s Board.
The GEPF is Africa’s largest pension fund and a founder investor in GREA, represented by the PIC, Africa’s largest asset manager.
“GREA’s consistent performance since inception in 2018 has been recognised by the GEPF as strategic platform for its rest of Africa real estate investments. Their ongoing commitment through the US$48.5 million recapitalisation will accelerate our Grit 2.0 strategy considerably, expediting the formation of sector-specific sub-structures that are higher-yielding, more resilient, and with greater social impact, whilst earning development margins north of 10%,” commented CEO of Grit, Bronwyn Knight.
The US$48.5 million equity investment will initially be utilised to reduce the Group’s debt before being deployed by GREA through capital allocation into risk-mitigated development projects expected to contribute to NAV and income growth as well as its ESG impact under the Grit 2.0 strategy.
In terms of its 2.0 strategy, Grit has simplified its structure of core assets into four sectors including Bora Africa which houses its light industrial, data centres, logistics and warehouse assets, DH Africa, which houses the Group’s corporate accommodation, Healthcare Impact Africa for healthcare assets, and Office Park Africa (Grit’s commercial office portfolio).
“We are very excited to be partnering with Africa’s largest pension fund to unlock our significant pipeline of impact real estate assets and look forward to the input and guidance Mr Msindo will add to the board,” said Greg Pearson, Group MD and GREA CEO.
“GREA’s immediate pipeline opportunities include a further diplomatic housing development on behalf of the United States Bureau of Overseas Building Operations, and a second BPO centre in Nairobi, Kenya, on behalf of CCI Global.”
These portfolios will continue to focus on hard-currency leases and global or multinational tenants with equity investors and funders, with mandates for specific asset classes, allowed to co-invest at a sub-structure level.
