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Grit Real Estate expects more rental growth after interim jump

Grit listed on the standard market in London last July raising US$132mln and intends to move to the premium segment of the market by the end of 2019

Mozambique
Mozambique accounts for 38% of the portfolio

Africa-focused property investor Grit Real Estate Income Group Limited (LON:GR1T) expects to meet its income targets though property conditions in its markets aren’t easy.

"Given the strength of the group’s existing portfolio, the company expects to continue to deliver annual rental growth as well as possible capital value increases through yield compression," said Bronwyn Corbett, chief executive.

READ: GRIT Real Estate Income sees huge opportunity in African property

Gross rental income over the half-year rose by almost 26% to US$18.7mln, with distributable earnings flat at US$6.06c (US$6.07c).

Offices, retail and hospitality make up 80% of the 25-strong portfolio. 

Occupancy rates dropped 0.7% to 96% for the period ended December due to the Zimpeto Shopping Centre in Mozambique losing a tenant, though international supermarket Spar has now taken the space.

Grit expects the vacancy rate to improve significantly when the refurbishment of the Anfa Shopping Centre in Casablanca is completed in the middle of this year.

The redevelopment is on track and on budget but GRIT has taken a prudent approach on final costs and has held back some cash in the event of an overrun.

Lower Divi

Because of this, the interim dividend was reduced to US$5.25c (US$6.07c).

GRIT listed on the standard market n London last July raising US$132.2mln and repeated it intends to move to the premium segment of the market by the end of 2019.

“The company continues to deliver on its targets of annual income distribution and total annual return growth and is well positioned to capitalise on the significant potential growth from its unique high-quality portfolio of properties,” said Corbett.

Quick facts: Grit Real Estate Income Group

Price: 1.195 USD

LSE:GR1T
Market: LSE
Market Cap: $365.13 m
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Performance demonstrates 'robustness' of Grit Real Estate Income's business...

Capital Network analyst Ed Stacey talks through Grit Real Estate Income Group Ltd's (LON:GRIT) trading update for the year to June 2019. He says the company's on track to deliver its targeted 12% total shareholder return for the year and an increased dividend.

on 27/6/19

2 min read