Grit Real Estate investing more in Botswana – Grit Real Estate Income is buying an additional 22.75% stake in Botswanan real estate company, Letlole La Rona Limited for US$ 13.8m (to be settled by issuing new ordinary shares in Grit). The vendor is Botswana Development Corporation Limited, a development finance institution founded in 1970, with the Government of Botswana as its sole shareholder. As the country’s main agency for development, BDC remains the biggest investor in Botswana with total assets of BWP 4.1 billion (c. US$ 394 million) as at 30 June 2018. Grit hopes that BDC can partner with the company in future investments.
This deal increases Grit’s overall shareholding in LLR from 6.25% to 30.0% and represents a significant expansion of Grit’s strategy in Botswana, a strong and politically sound economy and an investment grade country, which grew at 4.6% in real terms in 2018 and with one of the highest GDP per capita in Africa.
The new shares will be issued at US$ 1.40 per share (the most recently reported EPRA NAV, as at 30 June 2019 (exclusive of dividends of US$ 6.95 cents per share paid in November 2019).
Bronwyn Corbett, chief executive officer of Grit, said: “We are pleased to announce this further increase of our stake in LLR, which represents an opportunity to utilise LLR’s local expertise and to gain exposure to exciting asset management opportunities whilst significantly increasing our presence in Botswana, a key market for Grit’s future growth. I look forward to working with Chikuni Shenjere-Mutiswa and the LLR team to expand its leading property portfolio and creating further value for shareholders in both Grit and LLR.”
Chikuni Shenjere-Mutiswa, chief executive of LLR, said: “I’m proud of what LLR has achieved in the eight years since the company listed on the Botswana Stock Exchange. We are very excited about the prospects for the business through our collaboration with Grit as LLR becomes Grit’s partner of choice for real estate in Botswana and the wider region, delivering strong portfolio growth, as well as a sustainable income stream for shareholders.”
About LLR
LLR listed on the Botswana Stock Exchange on 15 June 2011 and is a key player in the real estate market in Botswana. At 30 June 2019, LLR owned 20 properties worth BWP 774 million (c. US$ 73 million), the majority of which are located in the greater Gaborone area. 56.2% of LLR’s portfolio was in the industrial sector, 30.3% in retail, 6.3% in commercial and 6.2% in residential.
LLR sold all its hospitality assets for BWP 235 million (c. US$ 22 million) in the financial year ended 2019, the proceeds of which will be deployed into LLR’s pipeline of yield-enhancing investment opportunities. As at 30 June 2019, LLR had a loan-to-value ratio of less than 35%.
Financial information
As at 30 June 2019, being the date of its last audited annual financial statements, the consolidated net asset value of LLR was BWP 744,056,542 (c. US$ 70,090,126) and profits after tax for the year ended 30 June 2019 was BWP 53,073,048 (c. US$ 4,990,145).
GR1T : Grit Real Estate investing in Botswana