Grit Real Estate Income Group, the pan-African property investor, has entered into an agreement to acquire a stake in a Moroccan real estate investment trust (REIT).
The REIT (or Organisme de Placement Collectif Immobilier (OPCI) as it is known in Morocco) will be made up of one asset – the mixed-use property Massira Corner, located in Casablanca, which is owned by Residence Massirat Al Houda (a subsidiary of Société Soprima).
Grit will buy a share in the OPCI/REIT from Residence Massirat Al Houda and intends to inject further equity into the vehicle from its key cornerstone investors.
Grit will then look to grow the asset base of the OPCI/REIT with a number of identified acquisitions in a bid to diversify the vehicle’s sector and tenant exposures.
The company said the introduction of co-investors was expected to provide a measured reduction in relation to Grit’s sole exposure to the vehicle going forward. The group expects to deliver meaningful returns to shareholders and co-investors in the OPCI/REIT vehicle through both income and capital appreciation from further potential capitalisation rate compression and identified asset management opportunities across the potential assets to be acquired.
Grit has identified two properties that are likely to be acquired by the OPCI/REIT. The first is Grit’s 350-room Club Med resort in Essaouira, Morocco, which is currently being developed and will be leased to Club Med on a 15-year fixed Euro lease and has an estimated development value of €87m.
The second is Grit’s Anfa Place Mall, which is located in Casablanca and is the company’s largest asset by value. Grit recent completed a refurbishment and repositioning programme on the asset.
The Massira Corner asset consists of gross lettable area of around 16,500 sqm and is anchored by Hotel Onomo on an initial lease period of nine years with 201 rooms and occupying 67% of the property. The rest is made up of ground floor retail let to brands such as H&M, Charles and Keith, Starbucks, Terranova and Cosmos.
Massira Corner, which was completed in 2018, is located on a prime, corner site of the “golden triangle” of downtown Casablanca.
Grit has stated that, subject to further due diligence and approval by the board, the acquisition price to be paid for the interest in the OPCI/REIT will be agreed at an acquisition yield that is accretive to shareholders of Grit.
The group hopes to complete the deal prior to 30 June 2020. The transaction is subject to a number of conditions precedent and the conclusion of binding agreements.
Bronwyn Corbett, chief executive of Grit, said: “I am excited by the opportunities for Grit to significantly and profitably grow the new REIT vehicle’s asset base in Morocco with the inclusion of further potential acquisitions. Furthermore, with the support of additional potential equity investors taking up shares in the new vehicle alongside Grit, the group expects to deliver meaningful returns to shareholders and co-investors in the OPCI/REIT vehicle through both income and capital appreciation from potential capitalisation rate compression and identified asset management opportunities across the potential assets to be acquired.”
GR1T : Grit Real Estate acquires stake in Moroccan REIT