Equites Property Fund has added more than R600m to its portfolio value in just six months, outperforming a tough economic backdrop as demand for prime logistics space continues to outpace supply.
The specialist Reit, which focuses on warehousing and distribution hubs, lifted its property portfolio from R27.7bn in February to R28.3bn by August 2025.
This growth was driven by strategic acquisitions, development rollouts, and a solid 4% like-for-like fair value uplift on income-producing assets, the group said in its half-year results to August.
"Market appetite has strengthened considerably, with Equites receiving inquiries totalling approximately 268 000m² for new developments as well as existing facilities over the last 18 months," the group said.
The group reported a distribution of 69.04 cents per share, up 3.8%, and reaffirmed full-year guidance of 140.62 to 143.29 cents
During the period, ongoing development expenditure amounted to R327m, partly offset by property disposals of R668m during the period.
Equites also commenced two new speculative developments in Meadowview and Riverfields to capitalise on rising demand. The Meadowview facility is currently under offer, while a lease at Riverfields has already been finalised ahead of practical completion, it said.
The group reported Like-for-like portfolio rental growth came in at 5.1% and is expected to revert to between 5.5% and 6% annually once the impact of recent rental reversions normalises.
Equites said its long-term focus remains on delivering sustainable distribution growth ahead of inflation through tight control of administrative costs and continued optimisation of its debt funding structure.
The group has begun a phased exit from its UK portfolio to redeploy capital into ESG-compliant logistics developments in SA. The group will only conclude sales that align with its financial and strategic goals, despite strong buyer interest.
“Demand for prime logistics assets in SA continues to outstrip supply, driven by retailers upgrading supply chains to remain competitive, third-party logistics providers expanding fulfilment networks to meet rising e-commerce volumes, and FMCG operators investing in modern facilities to enhance delivery efficiency," the group said.
Meanwhile on the supply side, development remains constrained by a shortage of bulk land plots and persistently low vacancy rates, it said.
Equites reduced its all-in SA cost of debt to 8.3% by end-August, down more than 50 basis points since year-end, while its LTV hovers around 37.2%, which enabled the group to purchase shares worth R130m.
The group currently has R14.2bn in debt facilities with a weighted average debt maturity profile of 3.2 years and R3.4bn in cash and undrawn facilities.
Looking forward, the group said it is well-positioned to deliver sustained value, backed by a high-quality portfolio, strong sector fundamentals, and ongoing development opportunities.
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