Investor Update – COVID-19

17 March 2020


The safety and wellbeing of Grit’s people and their families, our tenants, communities and wider stakeholders remains our top priority while we work hard to contain and mitigate the potential effects from the Covid-19 (Coronavirus) pandemic that continues to evolve.

Grit operates across a number of jurisdictions and sectors and we are closely monitoring the recommendations issued by the World Health Organisation, various governments and relevant authorities and are complying with these across our operations. Further detail of specific impacts are provided below.

The Board has additionally mandated an internal Company steering committee (the “Steering Committee”), constituting executive and senior managers, to monitor the situation across all countries of operation. This Steering Committee is in constant communication with key tenants and operational staff and is providing ongoing feedback to the Board. As part of the Group’s Business Continuity Procedures, we have a Pandemic Response Plan in place which includes travel restrictions and remote working policies.

As a preventative measure and in line with official guidance, the Company has expanded and intensified its hygiene protocol, significantly increasing the number of cleaning hours using hospital grade disinfectants and making hand sanitiser widely available across our assets. In addition, education campaigns are being implemented, providing official guidance to shoppers, tourists and tenants.

The Board also notes the Bank of Mauritius’ (the Bank’s) support programme (available at this link) announced on 13 March 2020 that includes a working capital special relief amount of Rs 5.0 billion through commercial banks. This follows the Bank’s reduction of Mauritius’ key repo rate by 50 basis points to 2.85 per cent per annum on 10 March 2020. Although not expected to be directly applicable to Grit, the support of the Mauritian government is a welcome development to offset the effects of the travel ban and expected drop in passenger arrivals that will become increasingly apparent in the local economy over the coming weeks.

A key tenet of Grit’s investment case has always been its portfolio diversification across multiple geographies and asset classes and the strength of its underlying tenants. 92.8% of Grit’s income is earned from large multinational tenants with over 94% of revenue being earned in USD, Euro or pegged currencies. The portfolio has a contracted Weighted Average Lease Expiry profile of 4.7 years, including a contracted escalation on 2.7% per annum.

The Board believes that the Company remains well positioned to navigate through this period with a healthy interest cover, strong relationships with credit providers and tenants and sufficient liquidity to meet its financial obligations

Hospitality sector

Hospitality assets constitute 18.8% of Grit’s total asset value (HY2020), in line with the Company’s self-imposed soft limit of no more than 25% exposure (by gross asset value) to any particular asset class or geography.

The Board reiterates that Grit does not have direct hospitality risk or exposure. In terms of its fully servicing triple net lease rental contracts with international leisure operators, the Company’s base revenue and lease tenure is not directly impacted by resort occupation numbers. These contracts are underwritten by the holding company of the respective operator.

On 16 March 2020, Mauritius has announced a ban on all flight arrivals from the EU, UK and Switzerland which comes into effect on the 18 March 2020 for a period lasting 2 weeks. The hospitality operators are currently in dialogue with the government and local banks and are expected to be large beneficiaries of the announced government support programmes.

All three of Grit’s hospitality partners are approaching the end of their peak seasons, which will partly mitigate the potential impact on the underlying tenants versus their budgeted occupancies in the current year. Although booking numbers have significantly reduced, each operator is employing strategies to reduce costs, conserve cash and consolidate operations. Further announcements will be made in this regard as each of the operators update the market in the coming days.

Retail sector

The Board, through the Steering Committee, continuously monitors developments in respect of the implementation of social distancing measures by governments in countries of operation and the potential impact this may have on the retail assets. At the time of writing, these measures have only had a limited impact on trading at Anfa Place Shopping Centre, where authorities have closed down the food court area (which equates to 6.6% of total GLA), but allowed trading in the rest of the mall to continue unaffected. It is too soon to quantify the risks to revenue on Anfa Place and we intend to update the market as soon as we have better visibility.

As with all asset classes in the portfolio, Grit’s exposure to retail is diversified across multiple geographies, towns and cities. There are currently only limited supply disruptions affecting malls in Zambia, but save for those impacts, the centres continue to trade normally at present.

Office, corporate accommodation and light industrial

At time of writing, we do not yet see any impacts on the remainder of our portfolio.


The Board appreciates the fluidity and seriousness of the situation and cannot at this stage quantify the potential impact that Covid-19 will have on the Company. It draws comfort from the structure of its contracts, the quality of its international tenants and the diversification of its portfolio across multiple geographies and asset classes.

The Company will continue to keep stakeholders updated and informed as the situation evolves.