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.
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.
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.