CEO Today Africa Awards

www.ceotodaymagazine.com CEO Today Africa Awards 2017 MAURITIUS 24 Bronwyn Corbett, founder member and Chief Executive of Grit Real Estate Income Group (previously Mara Delta Property Fund) is a trailblazer not only for women but listed real estate on the African continent. This vivacious 37-year-old started out in 2014 with little more than a concept, a passion for Africa and an irrepressible energy. Today, Grit is the largest Africa-focused income group listed on the Johannesburg Stock Exchange and in Mauritius. From its first acquisition in Mozambique at US$41 million, the company today operates across five African countries with 20 assets and an investment in a development company, totalling c.US $600 million. It recently paid out its seventh consecutive US dollar-based distribution to shareholders and has consistently delivered on its targeted yield in excess of 7% in US dollars. Along the way, some of the largest institutional investors on the continent, including South Africa’s Public Investment Corporation took note, and have become anchor shareholders. Grit’s ability to partner with key tenants on their real estate needs in Africa has seen it attract international corporates and brand names such as Anadarko, Carrefour, British Petroleum, KPMG, Vodacom and Starbucks. Corbett believes in a flat management structure and empowering her workforce. As such, Grit is one of the few listed companies on the continent where 75% of top management are female executives. Momto 9- and 6-year-oldgirls, Corbett is apassionateconservationist and animal lover, having recently aligned herself and Grit with the plight of the last three remaining Northern White Rhinoceros who lives at the Ol Pejeta Conservancy in Laikipia, Kenya. Although Grit is not a real estate investment trust, it distributes all net earnings. An important factor in optimizing yield, is the structuring of each investment. Since Grit is an income fund, asset acquisitions are funded through a combination of debt and equity, with the debt structured as interest only loans over the loan period. Funding is naturally hedged against the lease income (US$ or Euro) and has decreased to 5.78% on average on the back of an extended 7.8 year weighted average lease profile. CEO INSIGHT Africa is still very much regarded as the Cinderella of real estate investment although perceptions around the continent is changing. The number one fallacy is to view the continent as a country. In the global search for growth, investors have learnt to appreciate the different business nuances, economic drivers, risks and opportunities inherent to each country in Africa. Although many countries on the continent are still dependent on extraction economies, there has been increased diversification and in-country beneficiation, which have led to economic growth. Political and economic stability have been steadily improving in the decade following the global financial crisis, which in turn attracted foreign direct investment, also into real estate development and ownership. Most countries on the continent have only gained independence after 1960, which relatively speaking, leaves a very short track record to date. The United Nations predicts that in a little more than 30 years, one in four people globally will live in Africa. On top of that, according to the International Monetary Fund, real GDP growth in sub-Sahara Africa averaged 4.7% annually over the last 20 years (as reported in 2016), compared to 4.2% in the Middle East and North Africa (MENA) and 2.1% for so-called advanced economies. Combined with its young and growing consumer base and continued urbanisation (urbanization is expected to drive over 50% of Africans to cities by 2050, compared to 40% today – African Economic Outlook) Africa is indeed the last frontier for growth. This provides investors with a very large, growing “basic needs” consumer base. Infrastructure and real estate should be adapted to suit these needs. Real estate investors have learnt that one can’t go into the continent with a South African or Western mindset of “bigger is better.” Investors, including real estate investors and developers have paid their school fees this past decade, which led to amuchmore realistic expectation on growth, how to mitigate risk and on what works and doesn’t in a specific country. Where large regional centres where thought to be the solution, infrastructure and congestion challenges have shown that well-located super convenience centres, catering to a large and growing “basic needs” market outperforms substantially. BRONWYN CORBET Founder member and Chief Executive of Grit Real Estate Income Group