Equites Property Fund: FY25 Annual Results Recap

Equites Property Fund: FY25 Annual Results Recap

Equites Property Fund is proud to present a comprehensive review of our 2025 financial year results. This year marked a significant milestone for the Fund, underscored by our dedication to unlocking premium logistics infrastructure across South Africa and totalling developments worth R3.2 billion.

The sale of the UK’s Newlands development platform marked a strategic change. This divestment cleared the path for improved value extraction while also helping us concentrate more intently on our remaining foreign assets. Supported by strong long-term leases and lower debt servicing costs, the fund has a sound financial position with a healthy loan-to-value ratio of 36% and an interest coverage ratio of 2.3.

With a 2.1% increase in distribution per share (DPS), now at R133.92, we have once again maintained our reputation for reliability. The fact that the Fund achieved this while maintaining the Group’s renowned 100% payout ratio demonstrates its steadfast dedication to shareholder returns.

With a 0% vacancy rate and a total valuation of R27.7 billion, the South African real estate market is still doing exceptionally well. Despite minor write-downs associated with the ENL transaction, this valuation is still strong. Due to low vacancy rates and growing demand brought on by continued urbanisation, the logistics industry—especially in South Africa—continues to flourish, which directly supports rental growth.

In terms of operations, the previous year demonstrated a strategic emphasis on value creation. Notable advancements and leasing agreements with major players in the market, like Shoprite and SPAR, demonstrate our commitment to enduring alliances and creative expansion. Additionally, the Fund contributed roughly R333 million to ongoing projects, of which R77 million was allocated to trading real estate, including notable advancements in the Basingstoke project in the United Kingdom.

On the financial front, we generated substantial dividends that further strengthened the balance sheet by successfully raising R700 million through two dividend reinvestment programs for subscribers. One of the main priorities was debt management, with maturing debt being refinanced at reduced interest rates. The fund’s impressive 83% hedging of its debt (with maturities longer than a year) ensures stability in the face of macroeconomic uncertainty.

Like-for-like rentals increased by 5.9%, indicating that rental growth remained positive. Successful rent reviews at properties like DPD Burgess Hill and DHL Reading further contributed to this. Temporary vacancies and overheads impacted DPS, but the overall trajectory remains upward. The strengthening of the South African portfolio was a major factor in the increase in the net asset value (NAV).

Sustainability remains a key component of our approach. The Fund’s initiative-taking response to tenants’ energy and water challenges is demonstrated by the expansion of solar energy installations and the incorporation of biological wastewater systems. Beyond environmental sustainability, we are still dedicated to social change, as evidenced by our continuous efforts to support education and Black entrepreneurship in the real estate industry.

As part of the Fund’s UK strategy, Basingstoke assets will be sold within the next 18 to 24 months, with the money raised likely going back into profitable multiset parks in South Africa. Key UK portfolios like HSBC and Aviva continue to attract a lot of interest, and several parties are presently evaluating acquisition possibilities.

By making strategic acquisitions in South Africa and, when appropriate, investigating new jurisdictions, we are well-positioned to take advantage of growth prospects. All upcoming investments, however, will be guided by a cautious and data-driven approach.

Maintaining the full distribution payout to shareholders while ensuring sustainable DPS growth, estimated at 5% to 7%, is the clear long-term objective. Equites Property Fund is certain that it will continue to provide value to stakeholders and investors alike because we have a solid operational base, a robust logistics industry, and a clear future vision.