Trading and Portfolio Performance Update

·      72.9% of Grit attributable contracted rental revenue for the month of June 2020 has been collected.

·      Short term concessions, primarily in the retail segment, have been agreed on 9.8% of Grit attributable contracted rental revenue due for June 2020.

·      Short term payment deferrals have been agreed on 16.1% of Grit's attributable contracted rental revenue due for June 2020 (and are therefore now due in the Company's next financial year), driven primarily by the hospitality sector assets.

·      For the period March to June 2020, the Group has collected 90.9% of the value of its contracted revenue, including prepaid rentals of USD$4.6mln. Over this same period it has provided rent concessions on 8.4% and rent deferrals on 12.7% of its Grit attributed contracted rental revenue.

·      The World Health Organisation reports that Africa is the least affected, globally, by the COVID-19 pandemic evidenced in both case load and infection rates per 1 million population.

·      Grit's rent collection performance has been strong since the onset of the COVID-19 crisis.

·      The corporate accommodation, industrial and office sector assets, which collectively represent approximately 48% of Grit's total net asset value as at 31 December 2019, has seen only limited impact to date. 

·      The Group's WALE at 30 June 2020 has risen to over 5.1 years (December 2019: 4.73 years) as a result of positive leasing activity and the impact of the Club Med acquisition.

·      The Group has experienced some rising vacancy trends in the portfolio over the six-month period to 30 June 2020, predominantly arising in the retail segment which has been accentuated by the uncertainty created by COVID-19 and government-imposed restrictions.  

·      Hospitality assets constituted 18.8% of Grit's total net asset value as at 31 December 2019. The Company does not have direct hospitality exposure as a result of its fully servicing triple net lease rental contracts with international leisure operators and the lease contracts are underwritten by the holding companies of the respective operators.

·      Rent collections in Mauritius have been postponed by government legislation until September 2020, at which time normal rentals will resume and the outstanding balances accumulated over the period to September will be collectible over the subsequent 15 months. This is expected to result in slower cash collections to the Group during the current financial year. The Board remains confident in the creditworthiness of the Group's hospitality partners and their respective holding companies given their strong competitive positioning and as a result of strong government support programmes that they are eligible for in Mauritius.

·      Notwithstanding the short-term impacts outlined below due to COVID-19, the Group is providing proportional support to its commercial occupiers whose operations are being materially impacted, whilst protecting its own position and its responsibility to Grit shareholders.

·      Retail assets constituted 32.1% of Grit's total net asset value as at 31 December 2019, with assets distinctively split between an enclosed shopping mall in Morocco and convenience shopping and service orientated strip malls across the remainder of the retail portfolio.  The strip malls have been relatively less affected by COVID-19 related closures.   

·      Grit is continuing to engage with all of its lenders, who have confirmed their continued support.

·      As a precautionary measure, the Company has agreed, or is in advanced discussions, with its lenders to extend LTV and interest cover covenants and introduce interest holidays on loans attached to Covid-19 impacted properties.

·      Weighted average cost of debt has continued to fall. The Group's current cost of debt at June 2020 is 5.8% (5.98%: 31 December 2019) and is expected to continue falling in line with downward moves in Libor over the previous quarter.

·      The Group has a well-financed balance sheet with a 43.9% Group LTV at 31 December 2019, diversified sources of finance, and a weighted average debt maturity of 2.84 years. The Group has accessed revolving credit facilities since the onset of the pandemic, which is expected to take Group LTV above 45% at the financial year end.

·      The Group's lowest currently imposed LTV covenant stands at 53%, implying a minimum headroom of US$74.8 million as at 31 December 2019. The Board expects downward pressures in its 30 June 2020 property valuations but expects to maintain sufficient covenant headroom after adjusting for these.

·      The Group's lowest imposed EBITDA covenant stands at 2x against 2.29x as at 31 December 2019.

·      The Company has no debt maturities before May 2021 save for a US$15 million bullet instalment payment due in October 2020. The Company is progressing well with restructuring this October instalment.

·      The Company has extended the target execution dates on all of its announced pipeline opportunities and is assessing each one of these in the context of market conditions, funding options, return profiles and capital allocation requirements.

·      The Company is evaluating the introduction of co-investment partners to projects and is considering a number of alternate funding strategies.

·      All potential investments continue to be carefully considered by the Company's investment committee and are consistent with the Company's existing strategy of owning a diversified portfolio of high-quality assets in carefully selected investment grade and high growth African countries underpinned by high quality tenants. Each is being evaluated in light of the current and future impact of the COVID-19 pandemic.

·      On 11 June 2020, the Company proposed a de-listing from the Main Board of the JSE Limited (the "JSE") by means of an offer by the Botswana Development Corporation Limited and Zep-Re (PTA Re-insurance Company) for a consideration of R14.90 per share. Should the Offer become unconditional, the Company will terminate the listing of its shares on the Main Board of the JSE.

·      The cost and complexity of being listed on three exchanges do not currently offer commensurate benefits and accordingly erodes shareholder value.

·      The Company will retain its listing on the Official Market of the Stock Exchange of Mauritius Ltd (the "SEM") and the Main Market of the London Stock Exchange (the "LSE").

·      The Group is intending to move to the premium listing segment on the LSE in the second half of 2020, following the completion of the proposed JSE de-listing.  To facilitate the Group's eligibility for inclusion in the FTSE UK Index Series, the Group is further exploring the possibility of redomiciling its corporate seat to Guernsey.