Grit Real Estate

Guts, resilience, innovation and tenacity in Africa’s real estate markets



Running any developing business on the African continent demands a long list of qualities which extend much beyond the usual pre-requisites of a successful company. The continent is a mish-mash of frontier, emerging and maturing markets with countless jurisdictional regimes often punctuated by various macro challenges. Pan-African real estate group Mara Delta has experienced the full spectrum of these conditions since its formation in 2014, so when the company decided to undertake a corporate rebrand it was inspired by the skills it had drawn on over the last three and a half years operating across Africa’s sprawling real estate sector. 


“After much deliberation, months of work and spending lots of time with branding agencies the name Grit came to me while I was listening to a TED talk,” says CEO Bronwyn Corbett. 


“I listened to the concept of grit, which stood for guts, resilience, innovation and tenacity and it really resonated with what we are building on the continent.  


“It takes a sheer amount of grit to have done what we’ve done and the whole concept of grit is reflected in our work so far. Therefore, the name Grit absolutely made sense.” 


Grit’s strategy remains unchanged through the name change, which is built on the premise of establishing a diverse portfolio comprised of highly regarded blue-chip tenants. 


“We are continuing with our investment strategy from day one which is based on country diversification and not being overly exposed to a commodity driven country or a jurisdiction that is driven by the same factors as another country. 


“We want to have that diversification of country, to have that diversification of asset class, which means we are looking more for the strength of the tenant and the underlying lease, rather than a particular asset class.” 


Corbett believes it is this carefully defined strategy that has shaped the company’s success thus far in building a varied portfolio of industrial, office, residential and retail properties in Morocco, Mozambique, Kenya, Zambia, Mauritius and most recently Ghana. 




The group’s sustained progress in Mozambique is a perfect example of the grit concept in action, as the company has maintained its portfolio of $150 million in the face of increasing macro challenges in the Southern African nation. 


After two decades of large-scale socio-economic development, Mozambique’s economic growth has slowed in the last few years as a result of the global economic downturn and low-level political conflict. However, Grit has kept its faith in Mozambique and is reaping the rewards from it. 


“Mozambique has remained through these times our best performing portfolio and that is because of our investment strategy which centres on having very strong, international blue-chip tenants that have been quite sticky in the respect of macro challenges,” reveals Corbett. 


“For us we call Mozambique our country of true grit because it’s a really great case study. We bought this portfolio before their recent troubles and if you look now we’ve actually renewed several significant leases.” 


Grit has renewed its leases with Vodacom and KPMG for another 10 years each, increasing the firm’s overall lease expiry profile across the whole portfolio to eight years, which is longer than any other lease in Southern Africa. 


In a further show of commitment to the country, Grit has established a large corporate office in Mozambique containing a number of senior staff, and is fully expectant of a full economic recovery and more. 


Looking at the wider portfolio, Grit recently completed a $121 million capital raise to settle some pipeline acquisitions including a number of hospitality assets in Mauritius, its current Kenyan assets and an investment into a separate development company. 




Focusing on its transitions in Mauritius, Grit has been highly acute to the realities of the real estate market, and quickly identified that the retail market is challenged by obvious demographic factors, as the tiny Pacific island is home to only 1.2 million people. 


However, the Mauritian tourism industry is currently booming with visitor numbers rising 11% in 2016, taking a chunk out of the European tourism market as the region continues to struggle in the face of macro concerns. 


Consequently, Grit has built its portfolio around this burgeoning tourism sector on the island. “Mauritius has become an absolute hub for tourist activities in recent times,” confirms Corbett.  


“There are more flights coming into the island with Turkish Airlines flying in six days a week and Emirates Airlines flying two A380s a day, so we really looked at that sector quite closely.” 


What the company found was a collection of highly prominent owner-operator brands on the island that were keen to expand and renovate their existing facilities. Therefore, Grit was able to approach these brands with the offer of buying the assets on a lease-back basis, allowing them to continue with the operational running of the facilities. 


“Those have proven to be very good deals for us on the basis that we collect a triple-net lease rental cheque every month and we don’t have to get involved in any structural matters or other challenges on the assets.” 


One of these assets, the Tamassa Resort hotel closed out at 90% occupancy this year in a further sign of the industry’s growth. Yet it is the strength and size of the hotel operator LUX* that is crucial to Grit, as the brand is big enough to sustain the 15-year Euro-backed lease it agreed with LUX*. 


“Mauritius itself is very flush and it has a lot of liquidity on the Euro. We funded that deal at 3.75%, and we still predict annual growth on the leases of around 2%, so those really stand out as being very accretive, very good real estate transactions for ourselves.” 


London Stock Exchange 


One of Grit’s long-standing targets as a company has always been to list on the London Stock Exchange and having already listed on the Johannesburg Stock Exchange and the Stock Exchange of Mauritius, it has patiently waited for the perfect moment to list in London. 


“London has been something we have been looking at for some time,” reveals Corbett. “For us its key that we come in at the right market cap size. We are just over $200 million now but probably need to be around the $450 million mark to consider listing.” 


The major attractions to the LSE centre on it providing access to a new shareholder base thus bringing greater liquidity, but Corbett remains cautious of a London listing based on how previous African stocks have fared. Consequently, the firm is undertaking detailed market research to determine whether the flotation would bring compelling enough returns to the business. 


On a broader note, Corbett sees an ever-increasing catalogue of opportunities for real estate development in Grit’s portfolio countries, with the implementation of real estate investment trust (REIT) structures set to drive development, particularly in Kenya and Morocco. 


“For me what makes Africa so exciting is the extent of opportunity out there, and with the projected population growth over the next 10 years, I think that Africa is the only frontier and I really do believe that. 


“We have a portfolio in five countries and just in these alone there are enough opportunities to keep us busy for a lifetime. It really is just the tip of the ice berg in relation to real estate, as we know these markets are 20-30 years behind other mature global markets.” 


For the time being Grit enjoys first mover advantage in the African real estate market, and has built itself from the ground up into a company with an equity shareholder following that will support considerable further portfolio expansion. 


Now the aim for Grit is to continue adapting to the challenges associated with the listed market space (not just those of the real estate sector) ahead of a potential listing on the LSE, which promises to propel the company to the next level in Africa’s real estate market.