Equites Property Fund Limited today announced that it would be pursuing a listing in the “Industrial and Office REITs” sector of the JSE from June 2014.
Equites Property Fund is a leading South African property investment fund manager and developer, focused on high quality industrial assets at the top-end of the industrial property sector, with a selective exposure to office property. Its portfolio of 17 prominent industrial and office properties comprising 124 253m² of rental space and valued at R1.2 billion, is Western Cape based. Equites is structured as a Real Estate Investment Trust (REIT). The fund is internally managed.
Equites’ chief executive officer Andrea Taverna-Turisan said that they were excited to bring such a top quality portfolio to investors. The portfolio properties are situated in prime locations, have very low vacancies with occupancy in excess of 97% and at least 77% of the portfolio has leases for longer than three years, with healthy escalations averaging 8.1%. Major tenants include Simba, Foschini, Execujet, Digistics, Imperial, Puma, UTI (Adidas), Avery Dennison, Courier-IT, Kuehne & Nagel AG, NGK Ceramics, Dole USA and Barloworld.
The fund is pursuing a private placement of shares to raise between R400 million and R650 million, which is amplified by strong vendor participation of more than 50%. Given the development expertise and proven track record of the executive team, Equites will undertake greenfields development of land and brownfields development by upgrading existing buildings. The fund has an attractive pipeline of significant A-grade industrial developments and plans to also expand into prime logistics zones in Gauteng and the greater Durban area in KwaZulu-Natal over the medium term. With a low level of gearing of 8.3%, there is scope for significant yield-enhancing acquisitions financed with debt funding. Equites is targeting to grow the portfolio to R4 billion within five years.