Equites Property Fund has issued its pre-close presentation prior to the close of its financial year ending 28th February 2025, reporting that growing demand for prime logistics in South Africa, driven by supply chain investment, is outpacing supply.
In the UK, 2024 was Equites’ fifth best year for take-up, outside of the pandemic period, with its total supply having risen to 58.7 million square feet across 274 units with a 7.18% vacancy rate of which 3.1% relates to new generation supply. While its supply is at a post-pandemic high, rental growth across the portfolio is expected to average 4.1% per annum to 2028, says the Company.
Prime yields remain between 5% and 5.25% for both multi-lets and logistics assets with room to tighten in line with UK gilts.
Equites concluded the sale of Amazon Peterborough in November 2024 at a 5.17% yield as well as the ENGL development platform disposal during H2 2025.
In South Africa, the Company concluded five leases on existing buildings where its tenants renewed at an average rental of R88 per square metre for warehouse space and R160 per square metre for office space spanning a total of 44 000m2. Across its portfolio, warehouse rentals increased by 9% per annum (on average) between FY2022 and FY2025.
Equites’ development spend during FY2025 amounted to R1.6 billion, mainly attributable to SHP Centurion, SHP Wells Estate, SHP Riverfields and its speculative developments at Meadowview. The bulk of its FY2026 development spend in Gauteng is allocated to the R21 and to develop the last remaining land parcels at Meadowview.
The Company says its focus over the past two years has been on disposing of non-core assets and it is reaching the conclusion of its local disposal programme, having achieved R858 million worth of disposals in South Africa during FY2025, mostly in line with book values with Heads of Terms (HOTs) agreed for a further R570 million worth of assets.
Equites’ loan-to-value (LTV) reduced from 39.6% at FY2024 to c.37% at FY2025 with its South African debt cost reducing to c.8.7% as at February 2025.
Its distribution per share guidance of 130 cents per share to 135 cents per share remains unchanged, maintaining a 100% payout ratio with an approximate expected LTV of 38%.
