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Businessmen brothers Sachin Chandaria and Dhiren Chandaria will earn Ksh1.7 billion ($16.1 million) from the sale of a facility belonging to Orbit Products Africa Limited (OPAL).
The facility will be sold to the Kenyan subsidiary of Grit Real Estate Income Group Limited, a London Stock Exchange-listed, Mauritius-based real estate firm focused on managing diversified assets in Africa.
The real estate developer will fund the OPAL facility acquisition through a $25-million loan secured from the International Financial Corporation.
“$16.1 million (Sh1.7 billion) of the loan will be utilized to fund the purchase consideration and associated transaction costs related to the initial sale and leaseback,” Grit stated.
Grit will inject an additional Ksh967 million ($8.9 million) to expand the OPAL facility, Business Daily reported.
The facility is a 20-acre manufacturing and warehousing facility located in Mlolongo, Machakos County, Kenya. It is an established regional manufacturer of popular personal care and homecare products for multinational clients in East Africa, including Reckitt Benckiser, Colgate-Palmolive and Unilever.
The deal will only make Grit the facility’s landlord.
Grit will own the structures and land and lease it back to existing tenants to continue operations. Grit will not be involved in production.
The acquisition adds to Grit’s property portfolio in Kenya.
Before the acquisition, the Chandaria brothers controlled the facility. They are members of the prominent industrialist Chandaria family, which includes renowned businessman Manu Chandaria.
“The transaction is underpinned by strong corporate guarantees from the parent companies of the Chandaria family, with which Grit has further credit risk insurance policies that provide for up to three years of rental obligation guarantees and cover,” Grit stated.
The developer stated that the facility will be further redeveloped and expanded from Q2 2022, with the expected completion set for Q4 2023.
By 2023, according to Grit, the facility “will be let on a new 20-year triple-net lease at an attractive contractual development yield of 16 percent (net of acquisition costs), enhancing the rental income on the expanded asset and its capital value.”
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