Grit Real Estate advances asset disposals as lender-backed restructuring broadens

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Grit Real Estate asset disposals

Highlights

Grit Real Estate accepted a conditional binding offer to sell Gateway Real Estate Africa, Africa Property Development Managers Limited, and related assets, subject to lender and regulatory approvals.
Grit is advancing a preferred proposal to sell a substantial portion of its remaining income-producing property portfolio, with senior secured creditor support contingent on certain conditions.
Both transactions could result in the disposal of all real estate assets, with Grit's board warning of extremely limited recovery prospects for ordinary shareholders and unresolved audited results.

Dual transaction process gathers pace

As reported by London Stock Exchange, Grit has accepted a conditional binding offer to sell its interests in Gateway Real Estate Africa and Africa Property Development Managers Limited, together with certain related assets and liabilities, in a deal it calls the Development Platform Transaction.

The company says definitive agreements and implementation arrangements for that transaction still need to be completed. Completion is expected to remain subject to lender approvals, releases of existing security, and regulatory and third-party consents, while discussions continue because the assets sit within a financing structure that makes execution more complex.

Separately, Grit is progressing a proposed disposal of a substantial portion of its remaining income-producing property portfolio after reviewing wider disposal and deleveraging options with advisers and lenders. The board says the preferred proposal emerged from a bid process for the group’s other assets and has secured support from senior secured creditors, who have committed, subject to conditions, to continue providing working capital so the group can work toward closing the transaction.

Talks with a preferred prospective acquirer are continuing, including near-completion of due diligence and negotiation of transaction documents. The company says this Property Portfolio Transaction also depends on definitive agreements, lender credit approvals, security releases, regulatory and third-party consents, and other customary conditions, with the current plan envisaging continued operation of the properties and transfer of employees within the agreed perimeter, subject to documentation and applicable law.

Liquidity pressure and listing uncertainty remain

The board says the two transactions are separate and at different stages, but it is assessing their combined effects on the company, operating businesses, employees, tenants, counterparties, creditors and ordinary shareholders. Grit adds that, alongside ongoing ordinary course disposals, the two proposed deals are expected to result in the disposal of all its real estate assets, after which it plans to engage regulators and shareholders on the future of its listing status.

Lender support continues to underpin the process through maturity arrangements, repayment standstills, working capital provision and covenant condonements. However, the company says that support remains conditional and is not an unconditional commitment to fund the group through completion, while any further delay could increase financing and transaction costs.

Grit also says it remains unable to finalize and publish its audited financial results for the 18 months ended 31 December 2025, and it has also missed the deadline for interim results for the six months ended 30 June 2026. Given the group’s financial position, outstanding obligations and the priority of creditor claims, the board says the prospects of any recovery for ordinary shareholders are extremely limited.

Our earlier coverage of Equites Property Fund’s interim results explained how the REIT used its accelerated UK exit—highlighted by the £200.5 million Aviva portfolio sale—to reduce leverage and strengthen liquidity. We noted that the proceeds were being redirected toward South African logistics growth while the group reaffirmed FY27 distribution guidance and maintained funding capacity through improved loan-to-value metrics and additional debt-market funding.

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