Equites Property Fund has reported a 3.8% increase in its distribution per share (DPS) to 69.04 cents for the six months ended 31^st August 2025, while reaffirming its distribution guidance of 140.62 to 143.29 cents per share for FY2026.

The REIT’s portfolio value increased from R27.7 billion in February 2025 to R28.3 billion in August 2025, primarily due to further acquisitions of R146 million, ongoing development expenditure of R327 million, and a substantial 4% like-for-like fair value uplift. The growth was offset by further property disposals during the period of R668 million.

Equites’ team concluded six leases across c.107 000m² with its like-for-like portfolio rental growth 5.1% which is expected to revert to 5.5% to 6% per annum once the impact of rental reversions during the period is in the base.

“We are pleased with the strong momentum generated in our portfolio during the period. The overall quality of the portfolio has improved through the disposal of older, non-core assets and the addition of new, ESG-compliant properties. Equites’ portfolio fundamentals are also exceedingly robust, with a WALE of 14.1 years, a weighted average escalation by GLA of 6.1%, and 99.1% of rental income derived from A-grade tenants. The portfolio had a low vacancy of 1.5% at period-end, which has subsequently largely been let. These fundamentals all support a high degree of income certainty over a sustained period,” comments CEO of Equites Property Fund, Andrea Taverna-Turisan.

Demand for prime logistics assets in SA continues to surpass supply, driven by retailers upgrading their supply chains, third-party logistics providers expanding their fulfilment networks to meet surging e-commerce volumes, and FMCG operators investing in modern facilities to boost delivery efficiency. Equites says that on the supply side, development remains constrained by a shortage of bulk land plots and persistently low vacancy rates, resulting in a supply-demand imbalance that has led to an approximate 7.3% year-on-year increase in nominal gross rentals for new logistics developments.

Market appetite has strengthened with the Company receiving inquiries totalling approximately 268 000m² for new developments as well as existing facilities over the last 18 months. It has commenced two new speculative developments in Meadowview and Riverfields to capitalise on the rising demand with the Meadowview facility currently under offer, and a lease already finalised at Riverfields, prior to practical completion.

Following a competitive RFP process, Equites was appointed to develop a state-of-the-art c.90 000m² logistics facility for a JSE-listed FMCG Group at Riverfields in Gauteng. The project will be undertaken in partnership with Tridevco (Pty) Ltd with the development activity during H1 2026 totalling R0.5 billion.

Equites has commenced its staged disposal of its UK assets, given the maturity of its portfolio, and the opportunity to redeploy capital within SA. The Company sold its DPD asset in Burgess Hill in the UK for £17.65 million, reflecting a 5% yield. In SA, Equites concluded the sale of three assets during the six months with its SA disposals comprising a specialised asset (not considered core) in Belville, and another in Philippi in the Western Cape. It also disposed of a land parcel in Sandowne for R20 million. Excluding the Philippi asset, these assets were classified as held-for-sale at February 2025 with its remaining disposals relating to the subsequent sale of companies forming part of the ENGL disposal.

The Company’s weighted average cost of debt in SA is 8.3% and 9.7% of debt maturing beyond one year is hedged. It has R14.2 billion in debt facilities with a weighted average debt maturity profile of 3.2 years ad R3.4 billion in cash and undrawn facilities. The Company expects to sell five assets, with a sixth asset anticipated to follow in early 2026. The remaining land in the UK is expected to be sold within the next 18 months, generating significant cash to be used to pay down UK debt, with surplus capital reinvested into SA at accretive yields.

These actions are projected to lower its loan-to-value (LTV) ratio to around 25% (37.2% as at 31^st August 2025) with its all-in cost debt in SA having decreased by more than half a percentage point since yearend to 8.3%.

Equites was able to capitalise on its lower LTV to repurchase shares amounting to R130 million. The shares were repurchased at a weighted average price of R13.82 per share, representing a 16% discount to reported NAV per share at the time.