Ethos Mezzanine Partners, a specialist secondary credit provider owned by Ethos Private Equity, has led a $31.5m funding deal for Grit Real Estate, the pan — African property business headquartered in Mauritius.
Ethos Mezzanine Partners’ fund III was the lead investor and arranger of the deal, which included a co-investment by BluePeak Private Capital Fund, according to an emailed statement on Wednesday.
Grit will use the funding to buy, refurbish and expand a warehousing and manufacturing facility at a prime logistics hub in Nairobi. The property will be leased to Orbit Products Africa Ltd, which manufactures personal and home-care hygiene products in Kenya.
Orbit, which is owned by the brothers Sachen and Dirchen Chandaria, is the contract-manufacturer in Kenya for Reckitt Benckiser, Colgate-Palmolive, Unilever, and Henkel. The total cost of the property that will be leased to Orbit is $53.6m, of which $25m will be financed through a senior loan from the International Finance Corporation (IFC). The remaining $28.6m will be tapped from the $31.5m provided by Ethos Mezzanine Partners and BluePeak Private Capital Fund.
That will leave a $2.9m balance from the Ethos-led funding deal, which Grit will use in the development of St Helene Artemis Hospital, a private healthcare facility in Curepipe, Mauritius. The St Helene Artemis Hospital offers private healthcare facilities in Mauritius and will also support the oncology-focused Coromandel Hospital that will also be developed by Grit.
“This is our 28th mezzanine investment on the continent and the third one in our fourth fund,” said Phillip Myburgh, a managing partner at Ethos Mezzanine Partners. “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.”
The Orbit transaction will be structured as a sale and leaseback arrangement, strengthening Orbit’s balance sheet and enabling further growth. The property is expected to receive an IFC EDGE green building certification on completion.
“It is value accretive for Grit, providing an attractive yield and growing its net asset value from inception,” said CEO Bronwyn Knight. “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.”
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