KENYA – Mauritius-based Grit Real Estate Income Group has secured funding of US$31.5 million for the acquisition, expansion, and redevelopment of the Orbit Africa warehousing and manufacturing facility in Nairobi, Kenya.
The funding was secured from Mezzanine Partners GP Proprietary Limited and BluePeak Private Capital with backing from an International Finance Corporation (IFC) debt facility.
“The total purchase consideration of US$53.6 million will be settled by way of US$25 million in senior debt finance negotiated with the International Finance Corporation, a member of the World Bank Group, and US$28.6 million through the perpetual note issuance,” a statement read.
The firm, while announcing the issuance of the note, said that the fundraising is conditional upon certain remaining conditions precedent which is expected to be fulfilled in the near future.
GRIT Chief Executive Officer Bronwyn Knight noted that the investment and redevelopment project will not only be accretive to shareholders but also create long-lasting positive social, economic, and environmental benefits for local communities.
In his remarks, Olaf Schmidt, IFC’s Manager for real estate, hotel and retail, health and education, and manufacturing investments in Africa said the loan will help to further develop vital manufacturing infrastructure in Kenya.
“ It is important for IFC that its financing will strengthen the involvement of Grit, a successful pan-African player specialized in attracting financing from international markets by using efficient and internationally-proven business models for the development and improvement of industrial and logistics properties,” Schmidt said.
The Orbit transaction initially comprises the acquisition, on a sale and leaseback basis, of an existing warehouse and manufacturing facility.
The facility will be leased back to Orbit Products Africa Limited (OPAL) on a new 25-year US dollar-denominated triple net lease, with an option to extend the lease term for a further 10 years.
Sachen Chandaria, Executive Director of OPAL added that the strategic partnership with Grit will position Orbit for expansion and for product and category extensions to better service.
“This innovative sale and leaseback transaction is amongst the largest across the sub-continent, with the strategic partnership with Grit representing a significant long-term undertaking by Orbit and reaffirms our commitment to Kenya and the region. Proceeds from the transaction will substantially further strengthen our balance sheet,” Chandaria said.
OPAL is the contract manufacturer for global firms such as Reckitt Benckiser, Colgate-Palmolive and Unilever at the 20-acre site.
The company has operated in Kenya for close to 50 years and employs more than 600 people in the region.
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