Investor deep dive
Grit Real Estate Income well placed to deliver attractive shareholder returns
GRIT Real Estate Income Group - Succeeding by design
GRIT Real Estate Income Group (LON:GR1T) is a pan-African (excluding South Africa) real estate company, generating high levels of US dollar and euro-denominated rental yield underpinned by a blue-chip tenant base.
The company has achieved good progress since its London Stock Exchange (LSE) listing in July 2018. Results for the half-year ended 31 December (released 14 February) showed gross rental income +25.9% year-on-year and group loan-to-value down to 43.4% (full-year to June 2018: 51.4%). Furthermore, the ratio of administration costs to asset value was reduced to 1.3% from 1.4%. We believe this can go below 1% as the portfolio continues to grow.
Performance has been achieved in spite of pockets of significant weakness in the African retail sector, highlighting the value of GRIT's diversification strategy. We provide some outlines of the strategy on page 2 (p2).
Grit targets a minimum total return in US dollars of 12%, which consists of an 8.25% dividend yield and at least 3.75% growth in net asset value (NAV). We argue that this model is solidly on track and offers an attractive proposition to investors. In addition, Grit has ongoing initiatives to deliver over and above the targeted minimum total return of 12%. We outline some of these initiatives on p2.
Quick facts: Grit Real Estate Income Group
Market Cap: $398.73 m
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