The International Finance Corporation (IFC) is set to lend $25 million (Sh2.7 billion) to Grit Real Estate Income Group to fund its purchase of manufacturing facilities from consumer goods manufacturer Orbit Products Africa.
The Mauritius-based property firm announced in October 2019 that it had signed an agreement with the contract manufacturer for global firms such as Reckitt Benckiser, Colgate-Palmolive and Unilever to buy its 20 acres of land in Mlolongo, Machakos which houses its factory.
The deal, valued at Sh4.3 billion, was to be completed last year but had delayed due to economic uncertainty brought by the Covid-19 pandemic.
Grit has now approached IFC to provide part of the funds needed to conclude the transaction.
“The proposed investment is a $25 million (Sh2.7 billion) senior loan to a special purpose vehicle in Kenya to be guaranteed by Grit for (i) the acquisition of an industrial facility (the “property”) with vacant land in Nairobi, Kenya,” IFC says in its investment disclosures.
“And (ii) the refurbishment and expansion of the property (the “project”). The existing facility is involved in production and packaging of soaps and detergents for popular home care and personal care products.”
The global financier noted that Grit will only own the structures and land and will rent back the same in the same condition to the same tenant to continue the existing operations. The property developer will not have any role in the production operations of the tenant.
The acquisition will add to Grit’s property portfolio in Kenya.
Grit owns half of Naivasha Buffalo Mall and also holds a pharmaceutical warehouse along Mombasa Road that it leases out to South Africa’s Imperial Health Sciences Logistics.