KZN gets R1.3 billion Warehouse facility to house Pepkor
Equites Property Fund (JSE: EQU), whose footprint extends to the UK, said on Tuesday that it will be developing a 122 734 square metre logistics warehouse facility in Hammarsdale, KwaZulu Natal to house JSE-listed retailer Pepkor (PPH).
The real estate investment trust said the total cost of development is R1.3 billion, which includes the cost of the land of R281 million.
It will enter into a 15-year "triple net" fully repairing and insuring lease with Pepkor on completion of the development.
Pepkor will have a right to renew for three additional five-year periods. The development is expected to be completed by November 2021.
Equites CEO, Andrea Taverna-Turisan, said the company is pleased with the transaction as it meets all its investment criteria. As a specialist logistics investor and developer, Equites has successfully delivered modern and efficient logistics facilities to users both in South Africa and the United Kingdom. A transaction of this size with a client of Pepkor’s stature and exacting requirements will assist to further cement the company’s aim of being recognised as a developer of choice to the largest logistics, retail and e-commerce participants in the South African market.
The modern, state-of-the-art logistics facility will be situated in Hammersdale, a prime logistics node due to its location along the N3 national road and its proximity to the rail network linking Gauteng to the Durban port. It is also close to the inland container terminal at Cato Ridge which is expected to change the logistics landscape in KZN.
Other prominent South African retailers, such as Mr Price and Ackermans, have logistics warehouse facilities close to the property, providing further evidence of the attractiveness of this node. The warehouse will boast a clear height to eaves of 15.8 metres and yard depth in excess of 45 metres. Both companies place strong emphasis on sustainability in their assets from the outset and the facilities have been designed with increased steel tolerances to accommodate the installation of photovoltaic panels.
Taverna-Turisan said: “The development will increase Equites footprint in the key logistics node of KwaZulu Natal and create further scale in our high-quality logistics portfolio. Importantly, the developed facility will also add to the quality, defensiveness and income predictability of Equites. We are excited to welcome Pepkor as a client.”