May 27 2026 13:45
CAPE TOWN, SOUTH AFRICA
JSE-listed specialist logistics real estate investment trust, Equites Property Fund, has said it will focus its investing in South Africa having underperformed in the UK.
In the financial year, Equites shifted from asset recycling to capital deployment and growth, focusing on SA as the main earnings and value driver. It began disposing of UK assets because of limited rental growth and poor performance, reinvesting proceeds into high-quality, ESG-compliant logistics projects and acquisitions in SA, it said two weeks ago.
The group recently announced 2026 results, wherein it reported distribution growth of 5.3%, driven by like-for-like rental growth of 5.4% in SA and 4% in the UK, plus contributions from developments and lower funding costs. The SA portfolio was the primary driver, with positive rental growth, and strong tenant demand, it said, leading to valuation uplifts and a 1.2% increase in NAV per share to R16.69. The group’s share price sat at around R17.98 on Wednesday May 27 at 13:34. The company’s share price is close to R16bn. Since listing in 2014, Equites has consistently grown its dividend in most financial years.
Equites’ portfolio value increased 3.6% to R28.7bn at the end of February 2026. The increase was driven by land acquisitions of R146m, ongoing development spend of R521m, and fair value uplifts on the income-producing portfolio of R931m, partially offset by property disposals of R636m. Like-for-like valuation growth in the SA portfolio was 6.7%. Nearly all of Equites’ revenue is generated from A-grade tenants, and there is a single vacancy in the portfolio of 5 000m2 in Meadowview. As of year-end, Equites’ weighted average lease expo+iry (WALE) was 13.7 years, with a weighted-average lease escalation of 6.1%. The extended WALE remains a cornerstone of the property portfolio, providing income certainty to both equity and debt investors.
Two new five-year leases signed and seven lease renewals, representing an aggregate GLA of 81 695m2. While the group has experienced reversions over the past two years, the majority of assets acquired in the early acquisition portfolios have now been renewed. The weighted-average lease escalation across the SA portfolio was 6.1%, in line with the prior year.
Equites disposed of the DPD asset in Burgess Hill, UK, for £17.65m, reflecting a 5.0% yield. This followed the conclusion of the rent review at the site, which crystallised the valuation uplift. Equites also received £1.5 in respect of the subsequent sale of assets in Egham, Goldthorpe and Peterborough West, as well as £29m for a property setup at Newport Pagnell in December 2025. In May 2026, the Group disposed of the Aviva portfolio, with a combined asset valuation of £200.5m.
Basingstoke land valued at £40m has planning permission, with the Group finalising terms with two prospective occupiers, covering about 68% of the land. Coton Park is under development, with JD.com, which is China’s largest retailer, as the forward funder, expecting £3m in proceeds, plus costs and interest, upon project completion in October 2026. The Thrapston scheme had planning approval, and the group believed Newlands would draw down this option for £3.25m plus interest and costs by June 2026.
In SA, demand for modern logistics facilities outpaced supply because of supply chain shifts, e-commerce growth, and continued investment by retailers, FMCG operators, and logistics providers. This imbalance supported rental growth and kept vacancy low in prime logistics areas.
Equites disposed of three properties in the Western Cape during the year, at a weighted-average discount of 1.1% to book value. One asset was acquired in the Eastern Cape, and Equites Park – Riverfields I-C reached practical completion and was immediately let. Post-year-end, a logistics property in Waterfall, Gauteng, was sold for R117m.
Equites was awarded the RFP to develop a state-of-the-art c.90,000m² logistics facility for Tiger Brands, in partnership with Tridevco, it said. The group started two speculative developments at Jet Park, totalling 17,500m² GLA, expected to finish in August 2026 with strong interest at R95/m². Once complete, Jet Park will be fully developed, completing the transformation of a brownfield site into a high-quality logistics park. The group began a speculative development at X102 Riverfields, scheduled for July 2026.
Equites has a total of 170 000m² in proposals out to the market, at an average rental of R93/m². This level of activity has been driven by 3PL (third-party logistics) s, automotive parts suppliers, and FMCG retailers.
“We are pleased with the strong momentum in executing our strategic priorities, including rationalising our UK portfolio and the large-scale redeployment of capital into SA opportunities with superior long-term growth prospects. The reallocation of capital from UK disposals into SA is expected to improve earnings quality and capital efficiency, and to underpin sustainable growth in distributions over time,” Equites CEO Andrea Taverna-Turisan said.
During the reporting period, the group’s asset disposals exceeded R1bn, primarily in the UK, and it achieved an equity raise of R0.7bn. These actions improved the loan-to-value (LTV) ratio to 35.1%.
The group had debt of R12.1bn, with a weighted-average maturity of 2.9 years. At year-end, the group had R3.1bn in cash and undrawn facilities.
In the past two years, the group reduced its SA all-in debt cost by a full percentage point to 8.13%, while maintaining at least an 80% hedge ratio. .
Equites forecast the 2027 financial year distribution per share to grow from 147.7cps to 150.5cps, implying DPS growth of 5% to 7%. This is supported by the SA portfolio, which continues to provide a strong and stable base for growth through its long WALE and contractual lease escalations, it said
247@propertyflash.co.za
