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Ethos and BluePeak co-invest in Grit

Staff writer
Jan. 19, 2022, 3:44 p.m.

Word count: 494

Ethos Mezzanine Partners and BluePeak Private Capital Fund have co-invested $31.5m in Grit Real Estate Income Group (Grit), a Pan–African real estate business headquartered in Mauritius.

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Ethos Mezzanine Partners and BluePeak Private Capital Fund have co-invested $31.5m in Grit Real Estate Income Group (Grit), a Pan–African real estate business headquartered in Mauritius.

The investment enables Grit to continue the roll-out of its pipeline, aimed at diversifying its investment in high-quality hard-currency earning African real estate assets with blue-chip tenants.

Ethos Mezzanine Partners led the transaction, structuring and arranging the investment.

Phillip Myburgh,  Managing Partner at Ethos Mezzanine Partners, said: “This is our 28th mezzanine investment on the continent and the third one in our fourth fund. That experience enabled us to craft a unique perpetual note funding arrangement to provide Grit with the growth capital required to continue with its real estate investment programme, notwithstanding the constraints of the global COVID-19 pandemic.” Grit's portfolio is comprised of 54 investments in more than eight countries and across five different real estate asset classes.

Proceeds from the investment will be applied to fund the acquisition, refurbishment and expansion of a warehousing and manufacturing facility located in a prime logistics hub in Nairobi.

This property will be leased to Orbit Products Africa (Orbit), a well-established manufacturer of personal and homecare hygiene products in Kenya.

Orbit is the contract manufacturer in Kenya for Reckitt-Benckiser, Colgate-Palmolive, Unilever, and Henkel, and is owned by the brothers Sachen and Dirchen Chandaria.

The total cost of the Orbit transaction is $ 53.6m, funded by a $25m senior loan advanced by the International Finance Corporation (IFC), and $28.6m raised by the Ethos-led investment in Grit.

Structured as a sale and leaseback arrangement, that transaction will strengthen Orbit's balance sheet and facilitate further demand-led growth.

It is intended that the property will achieve an IFC EDGE green building certification upon completion, and the construction and refurbishment process will be in line with NEMA guidelines.

Bronwyn Knight, Grit CEO, said the Orbit transaction meets all Grit’s investment criteria. “It is value accretive for Grit, providing an attractive yield and growing its net asset value from inception. Moreover, the property is in a prime location, it caters to a high-growth sector, and is anchored by a tenant that is a regional market-leader.”

In response to the shortage of quality private health care facilities in Mauritius, Grit will apply the balance of the funding raised from the Ethos-led investment to develop St. Helene Artemis Hospital, a private healthcare facility with a capacity of approximately 81 beds, in Curepipe.

St Helene Artemis is positioned as a private offering to service the general hospital demand for quality medical care, as well as being an important support facility positioned alongside the oncology focused Coromandel Hospital, also to be developed by Grit.

Bilal Vaiani, Partner at Ethos Mezzanine Partners, said: “Grit’s readiness to commit to a programme of strict adherence to the IFC’s environmental, social and governance performance standards formed a core part of our investment thesis. In addition, our funding will help to create critical additional manufacturing capacity, healthcare capacity and jobs in Kenya and Mauritius.”

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