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Grit Real Estate Income Group

Grit Real Estate enters Senegalese property market with €11.6mln luxury hotel acquisition

Grit is investing €25mln into refurbishing the hotel, which is being leased back at an attractive yield to the seller, Club Med

club med cap skirring hotel
Grit wants to work with Club Med on some of its other properties across Africa

Grit Real Estate Income Group Limited (LON:GR1T) has bought a luxury hotel in Senegal for €11.6mln.

As part of the agreement, the seller, Club Med, will lease the Club Med Cap Skirring hotel back at a cost of €1.26mln a year.

On top of the purchase price, Grit is also to spend between €25-28mln renovating and expanding the property, with the works overseen by Club Med.

READ: Latest Grit research note from Capital Network

Once the works are completed, the rent will be recalculated so that Grit is still achieving a similar 8% yield.

Club Med, which is majority-owned by Chinese conglomerate Fosun, operates more than 70 all-inclusive resort villages in 26 countries

Grit wants to provide further “real estate solutions” to Club Med across the other African jurisdictions in which the latter operates.

 “We are pleased to be acquiring the Club Med Cap Skirring, a 4-trident hotel and resort village in the Republic of Senegal, adding one of Africa's most politically stable and fastest growing markets to Grit's current geographic footprint,” said chief executive Bronwyn Corbett.

“We are proud to have now added an eight country to our list jurisdictions in Africa and our 26th property to Grit's asset portfolio.

“The property is being acquired at an attractive yield and will be on let on a new long term 12-year lease to a strong tenant covenant.”

Grit shares were unchanged at US$1.38 on Wednesday afternoon.

Quick facts: Grit Real Estate Income Group

Price: $1.37

Market: LSE
Market Cap: $404.66 m
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