Multinational real estate firm Grea has raised $48.5 million (Sh6.3 billion) from South Africa’s Public Investment Corporation (PIC) after taking steps to shift its office from Mauritius to Kenya, a condition for release of the funds.
PIC had delayed the disbursement of the cash as a result of South Africa's recent regulatory directive that has restricted state-owned entities from investing in low-tax jurisdictions or using them as investment conduits.
The policy came after the country was grey listed by the Financial Action Task Force (FATF), a global money laundering watchdog, for failing to meet the set anti-money laundering standards.
Grea is owned by PIC and Mauritius’ Grit Real Estate Income Group, which disclosed the success of the subsidiary’s fundraising totaling $100 million (Sh12.9 billion).
“In addition, the Government Employees Pension Fund, represented by PIC, injected $48.5 million of cash equity as part of a $100 million recapitalisation of Grea and appointed Mr Zwethu Msindo as a representative to Grea's board,” Grit said in a statement.
PIC requested a waiver from the investment restriction, which was granted by South Africa's finance ministry on condition that Grea moves its office to Kenya, from Mauritius within a year.
A source told this publication that the process of shifting Grea’s office to Kenya is already going on.
“Grea is redomiciling to Kenya because of South Africa being on the grey list... I think they have a couple of months to get this done,” the source said.
Transferring Grea’s office to Kenya is set to hand Nairobi a windfall in terms of jobs, as well as potential taxes when the property developer’s income starts being declared in Kenya.
Grit said the $48.5 million received from PIC will be used to reduce more expensive debt and to also fund new projects by Grea.
Grit and Grea holds several assets in Kenya, the latest being Eneo at Tatu City, a business process outsourcing (BPO) centre in Kenya, which was developed for the tenant-CCI Global.
Grit also owns Naivasha’s Buffalo Mall, Orbit Africa manufacturing facilities and the residential estate for America’s embassy staff in Nairobi’s Rosslyn area.
“We are very excited to be partnering with Africa’s largest pension fund, to unlock our significant pipeline of impact real estate assets, and look forward to the input and guidance Mr Msindo will add to the board,” Greg Pearson, Grea’s chief executive said in a statement.
“Grea’s immediate pipeline opportunities include a further diplomatic housing development on behalf of the United States Bureau of Overseas Building Operations, and a second BPO centre in Nairobi, Kenya, on behalf of CCI Global.”
Grit owns properties in multiple African countries including Uganda, Ghana, Nigeria, Ethiopia and its home base in Mauritius.
