Industrial focus lifts Equites Property Fund distributions

Equites Property Fund CEO Andrea Taverna-Turisan said the group’s performance reflects the quality of assets in its portfolio,

Equites Property Fund (JSE:EQU) grew its dividend per share 11.7% in the six months to August 2018, thanks to effective growth on its property portfolio over the corresponding period in August 2017.

The company remains the only property fund listed on the JSE that offers exposure to modern logistics assets in SA and the UK.

Prime logistics has outperformed retail and commercial property, with strong demand being driven by the growth in e-commerce and retailers increasing efficiencies through sophisticated distribution networks.

Equites, on thursday posted interim dividend of 68.12c per share for the six months to August. The net asset value per share increased 9.5% to R16.67 in the period compared with a year ago.

It reported 49% growth in the fair value of its property portfolio, from R6.8bn to R10.1bn.

Distribution centres and high-tech warehouses, which are classified as prime logistics assets, are among the most sought-after property assets in SA, with companies wanting to benefit from future growth in online shopping and also wanting to sign up groups who want to establish supply chains.

CEO Andrea Taverna-Turisan said the group’s performance reflects the quality of assets in its portfolio, which is reinforced by its ability to unlock key logistical nodes through the development of top-grade logistics buildings.

“Equites’s track record of double-digit distribution growth, as well as strong net asset value growth, continues to be acknowledged by investors, again awarding it the position of top-performing real-estate investment trust over the past three years, with an annualised total return of 24.8% per year," he said.

Equites achieved like-for-like property income growth of 7.8% in the reporting period, which was reflective of the strength of the underlying property portfolio.

The weighted average lease expiry across Equites's assets also increased from 7.9 years at February 28 2018 to 8.3 years at August 31 2018, which added certainty to the fund's future rental growth.

Vacancies fell to 0.2% from 2% at year-end following the letting of a logistics property at Cape Town International Airport.

The company's debt position was also low, with a loan-to-value of 22.1% at August 31 2018 compared with 23.5% at February 28 2018.

Equites also raised R800m in an oversubscribed bookbuild in June for future acquisitions in the UK.

In August, the company made its largest acquisition since listing, having bought a distribution centre for nearly half-a-billion rand. The property had a long lease in place with consumer goods group Simba. The Germiston distribution centre was bought for R461.9m from Investec Property Fund.