Equites’ UK development business takes flight
Equites, which listed in 2014, says its partnership with UK property investor Newlands is enabling it to grow rapidly abroad
Equites Property Fund, the only industrial specialist landlord listed on the JSE, is selling two of its UK assets so that it can fund its £115m (R2.34bn) development pipeline in the region.
UK exposure helps to diversify the group against risk including rand volatility. Equites has historically built high-end distribution warehouses in SA to specifications, which it says are best-in-house.
Equites, which listed in 2014, believes its strategic partnership with UK property investor Newlands is enabling it to grow rapidly abroad.
The company has a 60% stake in the joint venture, which it formed with Newlands. Through the partnership, it has access to land holdings in the UK and is able to build scale in that country’s logistics market.
Equites has a portfolio valued at more than R18.6bn, with R6.5bn coming from the UK.
CEO Andrea Taverna-Turisan said the company had sold two “high-quality UK distribution warehouses to real-estate funds managed by Blackstone for £43.4m (R884m)".
He said the sale proceeds would be reinvested into the development of prime distribution warehouses by the Equites Newlands joint venture.
This transaction would realise net cash proceeds of £23.7m to Equites, while lowering the loan-to-value ratio across its portfolio.
“The newly formed strategic partnership with Newlands in the UK has gained significant momentum and the proceeds of this sale will be invested into the premium logistics products that will be developed by the Equites Newlands partnership,” he said.
The partnership recently concluded two development agreements with Amazon and Hermes, with total development costs of £41m and £72m, respectively.
“The two facilities that Equites will ultimately hold will be brand-new premium logistics facilities, built to institutional standards and let to high-quality tenants on long-term leases,” Taverna-Turisan said.
Its share price is up about 9% on a three-month basis.
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