Menu
CURRENT SHARE PRICER 12.68
JSE CODEEQU
PREV. CLOSER 13.03
MOVEMENT-2.69%

Here’s what to expect from Equites in 2024

20 May 2024

We’ve entered a new financial year with a number of key milestones behind us and a positive outlook on what lies ahead.

Despite a challenging equity market over the past two years, we have achieved notable success in the debt capital market, having raised R750 million and R500 million, respectively, at industry-leading pricing points at two separate debt auctions in 2023.

Looking to the environmental, social and governance (ESG) domain, we recently received the IFC EDGE Champions award for 2023 and were placed on the Morningstar Sustainalytics’ ESG Top-Rated Companies List for 2024.

Within the development space, we completed a number of buildings, including The Foschini Group (TFG) distribution centre in Riverfields, the Cargo Compass South Africa distribution centre, the Normet Group distribution centre and a development for SPAR Encore, all in Jet Park, as well as the Shoprite distribution centre in Canelands.

Looking now to our present endeavours, we are in the process of completing various significant buildings in Gauteng and the Eastern Cape. Giving you more insight, our Executive Head of Property Development, Jaun Knoesen shares his take on what Equites has in store in the months ahead.

 

We will continue building on past successes and enhancing our offering

I share the same outlook as our CEO, Andrea Taverna-Turisan: every component of the development process is of utmost importance to us, from upholding our baseline specification to ensuring the quality of our final buildings. Each year, we test our specification and scrutinise where we can introduce new innovations or improve on our existing ones.

Our singular focus in logistics warehousing means that we constantly engage with the leading logistics operators in the South African market, which gives us the platform to learn from others in this space and vice versa. This symbiotic relationship helps us to innovate and, in turn, propels others to do the same.

We additionally have an advantage as we have a joint venture (JV) with the UK-based property development company, Newlands Developments. In 2019, I had the opportunity to invite a team of our local consultants to join me in an educational week with Newlands which afforded us the opportunity to see how logistics assets are designed and developed in the UK. This “cross-pollination” enabled us to compare our design philosophies in South Africa with those in the UK and ultimately affirmed that we are equally at the cutting edge, locally.

Even with this encouraging insight, we made the effort to introduce changes to our approach in the years that followed. And, in the same spirit, we continuously strive to learn, to adapt and to improve our solutions to remain a leader in the field. In the near future, this will include, among other projects:

 

  • Putting innovative design features to the test

While many developers design commercial centres around individuals, we focus on designing around trucks and how quickly they can get in and out of a warehouse yard. For this reason, we start conceptualisation at the face of the building and flesh out the design from there to help tenants optimise on efficiency.

As importantly, we believe in designing for longevity. So, we really pay attention to using innovation to set tenants up so that they don’t outgrow spaces and can cope with modern logistical demands.

On that note, we’re going to be running a pilot on a building in Meadowview where we’ll be introducing a new lighting model. When designing a handful of buildings speculatively in the past, we ended up having to make adjustments to ensure that the horizontally installed lighting aligned with the tenant’s racking direction and aisle widths. What we’ll be testing out now, instead, is lighting that runs diagonally.

This small tweak, we hope, will not only save time and costs upfront but will enable the tenant to easily adapt the layout of their racking as needed, if or when their business requirements change over the years — or to suit the needs of a new tenant.

Moreover, we intentionally use materials that are specifically designed to withstand the high impact of a typical logistics business, ensuring the long-term durability of our facilities.

 

  • Upgrading select properties for sustainability purposes will be a priority

As mentioned, we build in a way that ensures value for our tenants for the entire lifespan of the building, mitigating the need to retrofit buildings for design oversights and ensuring that properties suit the changing needs of tenants over the long haul.

To optimise properties for ESG purposes, however, we are going to be upgrading select buildings in our portfolio that were either bought or built more than five years ago.

 

We are full-steam ahead in the development of new buildings

We are currently in the process of developing two warehouses for Shoprite, each valued at over R1 billion and measuring between 90 000 m2 and 100 000 m2, individually. One is being built in Riverfields, with the second phase scheduled for completion towards the end of July 2024, while the other is being established in Wells Estate and is due to be completed at the end of September 2024.

At both sites, more than 30% of the labour and SMMEs involved with the developments are from local communities, which ties in with our social upliftment goal of having a positive impact on the success and wellbeing of communities that surround our buildings.

As for other development projects, we are in the process of upgrading and doing a partial redevelopment of a facility in Centurion, also for Shoprite. In addition, we are working on the development of three speculative units in Meadowview

Our successful efforts in securing significant land holdings and completing world-class developments position us with the unparalleled ability to create long-term, sustainable income-producing property investments that will benefit our shareholders over time.

 

We aim to expand our footprint in key areas

As we look ahead to where we aim to grow our presence, we are laser clear on our strategy, ensuring that we are able to best serve logistics operators. The dynamics of operating in a very fast evolving supply chain sector has resulted in organisations needing to truly understand their real estate solution to ensure full optimisation so that product can get in and out as efficiently as possible — and this is exactly what we pay close attention to in our development process.

Off the back of a strong year, during which we undertook upwards of 300 000 m2 of development work, we’re heading into the new financial year bullish with approximately 35 hectares of land to develop on.

With the R21 in Johannesburg having become the logistics epicentre for the greater Gauteng market, we remain focused on our Riverfields developments and we look forward to seeing more successful developments take shape.

 

Stay up to date with these developments and others via LinkedIn, X, Facebook, Instagram and YouTube.

© 2024 Equites Property Fund Ltd.
This website stores cookies on your computer. These cookies are used to collect information about how you interact with our website and allow us to remember you. We use this information to enhance and customise your browsing experience. To find out more about the cookies we use see our Website Privacy Policy.