Property Flash


Equites Property Fund, one of SA’s and the UK’s top logistics property developers, has been awarded with an improved credit ratings outlook, having excelled through the pandemic, weak South African economy and social unrest. Global Credit Ratings (GCR) affirmed Equites’ SA long and short term debt at AA- and A1+ respectively, but also boosted its outlook to positive, saying the group had impressed investors who expected Equites to expand its portfolio of possibly best-in-class logistics assets which would generate strong returns.

Head of corporate ratings at GCR, Eyal Shevel said Equites had spent nearly a decade establishing as a blue chip property fund on the JSE. Equites had cemented itself as one of the larger real estate investment trusts (Reits), with a market capitalisation of R14bn, which South Africans could invest in.

Equites listed in 2014 as a developer and owner of prime logistics properties in SA, starting with a portfolio worth about R1bn. It was formed by its CEO Andrea Taverna-Turisan and a group of other property entrepreneurs.

Equites’ portfolio growth has been impressive and for the financial year to end-2022, ot reported 33% growth in its portfolio value to R25.7bn with assets in SA and the UK.

Taverna-Turisan said Equites benefited from internal developments and acquisitions including vacant land. Shevel said Taverna-Turisan’s team’s ability to raise capital was very impressive and helped it to maintain a healthy credit rating. He said the ratings could be upgraded more if Equites increased the scale and diversity of its portfolio by bringing its development pipeline to fruition. Increasing its exposure to developed markets and also decreasing its net debt to operating income ratio and improving in interest coverage would also help. In SA, Equites’ development pipeline is worth about R2bn while the UK pipeline is worth about £1bn.

“Equites’ property portfolio performance remains very strong, underpinned by the robust demand for logistics properties, which account for 96% of income,” GCR said.

The weighted average lease expiry profile across its portfolio was 13.7 years with an average escalation rate of 6.6% in SA and with less than 1% in vacancies. This showed that Equites was able to sign reliable large companies as tenants with lease terms anywhere from 10 to 20 years.

Equites would continue to enhance its portfolio especially in the UK, in partnership with a developer called Newlands.

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