Embattled pan-African landlord Grit Real Estate Income Group plans to liquidate its entire Kenyan portfolio as part of an urgent balance-sheet restructuring. The London-listed developer is offloading KSh20 billion ($154 million) in prime properties, including Naivasha’s Buffalo Mall and diplomatic housing complex Rosslyn Grove in Nairobi, to ease mounting debt.

The planned firesale forms the centerpiece of a wider campaign to divest more than $200 million in non-core holdings across Africa. Grit faces punishing borrowing costs and sliding asset values, worsened by the debt consolidation of Gateway Real Estate Africa, which pushed the landlord’s weighted average cost of debt to 9.41 percent.

Lenders are turning up the heat. Major creditors including South Africa’s Standard Bank Group, Absa Bank Kenya, and NCBA Group are watching closely as $76.1 million in expected cash from prior asset sales remains stalled. That holdup has tied up working capital and delayed essential balance-sheet repairs across its operating markets.

Prime diplomatic assets on block

Kenya represents Grit’s second-largest market, accounting for 16 percent of total holdings behind Mozambique at 28.5 percent. The planned Nairobi exit strikes directly at high-value corporate tenancies, most notably Rosslyn Grove. That single asset houses the U.S. Embassy consular division, which generates nearly a fifth of Grit’s total group income through dollar-denominated leases.

The planned asset clear-out follows sharp declines in Grit’s financial metrics for the year ending June 30, 2025. EPRA net reinstatement value per share sank 16.4 percent, driven by heavy property devaluations, currency drops, and inflation. Portfolio revenue fell 6.4 percent, forcing the firm to absorb $43.77 million in aggregate asset write-downs.

Property write-downs hit every corner of the business. The retail segment shed $10.19 million in fair market value, while light industrial and office real estate lost $10.51 million and $14.42 million respectively. The dual blow of falling valuations and rising debt service left management little choice but to accelerate structural disposals.

Defensive moves cushion blow

To counter persistent credit volatility, Grit expanded its interest rate hedging program to cover 71.8 percent of its SOFR-linked debt, targeting more than 75 percent. The protection is critical: every 50-basis-point bump in debt costs adds $1.66 million in annual financing charges. Equity injections, including $48.5 million from South Africa’s PIC, provided temporary relief.

At the operating level, management aggressively trimmed overhead by shifting administrative functions to property manager Broll. The move cut corporate expenses to 1.26 percent of income-producing assets, down from 1.63 percent a year earlier. The landlord projects more than $1 million in recurring annual savings as it pushes for an administrative ratio of 1.0 percent.

Underlying properties have shown operational resilience despite balance-sheet strains. Portfolio occupancy climbed to 92 percent, with rent collection holding steady at 91.3 percent and a 4.6-year weighted average lease expiry. Multinational corporate tenants make up 85 percent of the rent roll, and 92 percent of all group revenues are collected in hard currency.

Reinventing the core business

Under its restructured “Grit 2.0” roadmap, the board aims to drag its loan-to-value ratio below 45 percent in the near term, down to 35 percent over the medium term. The blueprint requires dumping capital-hungry retail sites in favor of defensive plays like data centers, outsourcing offices, healthcare properties, and government-backed consular compounds across Africa.

Executing that pipeline will remain difficult until Grit finds buyers for its legacy retail assets and stabilizes its debt load. For now, the company’s survival relies on closing deals in Nairobi and unlocking frozen cash before borrowing costs eat away what remains of shareholder equity.