• DPS of 69.04 cents, on-track for full year guidance of 5% – 7% growth
• Distribution pay-out ratio of 100%
• NAV per share up by 2.7% in the six months to R16.93
• R700 million of disposals completed
• Loan-to-value of 37.2%
• R3.4 billion of cash and undrawn facilities
• Preferred bidder for JSE-listed FMCG Group for the development of a c.90 000m² facility in Riverfields
• 27.0 MW of solar capacity, with three additional PPAs signed

Specialist logistics REIT, Equites Property Fund Limited, today announced strong financial results for the half year to 31 August 2025, underpinned by robust property performance. The Group highlighted DPS of 69.04 cents, up 3.8% and reaffirmed distribution guidance of 140.62 – 143.29 cents per share for FY26. The Group’s portfolio value increased from R27.7 billion in February 2025 to R28.3 billion in August 2025. This is primarily due to further acquisitions of R146 million, ongoing development expenditure of R327 million, and a substantial 4.0% like-for-like fair value uplift on the income-producing portfolio. This growth was offset by further property disposals during the period, amounting to R668 million.

Operational momentum was maintained, with six leases concluded across c.107 000m². The like-for-like portfolio rental growth was 5.1% and is expected to revert to 5.5% to 6% per annum once the impact of rental reversions during the period is in the base. By maintaining tight control over administrative costs and optimising the cost of debt, Equites aims to deliver consistent distribution growth sustainably ahead of SA CPI over the long term.

Equites CEO, Andrea Taverna-Turisan, said: “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.”

 The Group’s LTV ratio was 37.2% as of 31 August 2025, and its all-in cost of debt in SA decreased by more than half a percentage point since year-end 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.

R668 million of disposals during the period

Equites has commenced a staged disposal of its UK assets, given the maturity of the UK portfolio and the compelling opportunity to redeploy capital within SA. Once the disposals are concluded, the proceeds will be deployed into state-of-the-art, ESG-compliant logistics developments in key locations in SA, secured by long-term leases.

The Group concluded the sale of three income-producing assets in the six months. SA disposals comprised a specialised asset not considered core, located in Bellville, and an asset in Philippi. Equites also disposed of a land parcel in Saxdowne for R20 million. In the UK, the Group sold its DPD asset in Burgess Hill for £17.65 million, reflecting a 5.0% yield. With the exception of Philippi, these assets were classified as held-for-sale at Feb-25. Remaining disposals relate to the subsequent sale of companies forming part of the ENGL disposal.

While there is strong interest across the portfolio of assets earmarked for sale, management remains disciplined and will only conclude transactions at levels that are both fair and financially optimal for the Group.

Strong growth in the South African market

Demand for prime logistics assets in SA continues to surpass supply, driven by retailers upgrading their supply chains to stay competitive, 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. On the supply side, development remains constrained by a shortage of bulk land plots and persistently low vacancy rates. The resulting supply-demand imbalance has led to an approximately 7.3% year-on-year increase in nominal gross rentals for new logistics developments, indicating ongoing upward pressure on rentals, especially for well-located, A-grade facilities.

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. Equites has commenced two new speculative developments in Meadowview and Riverfields to capitalise on the rising demand. The Meadowview facility is currently under offer, and a lease has already been finalised at Riverfields, prior to practical completion.

Following a competitive RFP process, Equites was appointed as the preferred bidder to develop a state-of-the-art c.90 000m² logistics facility for a JSE-listed FMCG Group at Riverfields in Gauteng. This landmark project underscores Equites’ ability to secure and deliver large-scale developments for blue-chip clients. The project will be undertaken in a strategic partnership with Tridevco (Pty) Ltd, a prominent landowner in the area. It will provide the partners with the opportunity to jointly unlock further land parcels in the area. Development activity during the first half of 2026 totalled R0.5 billion and is expected to increase significantly with the completion of this facility by June 2027.

With access to prime land, extensive development expertise, and strong ties to major retailers, 3PLs, and FMCG operators, the Group is well-positioned to address the current supply gap while expanding its portfolio of high-quality assets.

Strong debt profile

The Group has R14.2 billion in debt facilities with a weighted average debt maturity profile of 3.2 years and R3.4 billion in cash and undrawn facilities. The Group consistently reviews its capital structure, ensuring that prudent funding and liquidity risk management are balanced with the ability to capitalise on new opportunities as they arise. Equites expects to sell five income-generating assets, with a sixth asset expected to follow in early 2026. The remaining land in the UK is expected to be sold within the next 18 months, generating significant cash. Proceeds will be used to pay down UK debt, with surplus capital reinvested into SA at accretive yields. These actions are projected to lower the Group’s LTV ratio to around 25%, creating significant headroom for the Group to pursue substantial development over the next three years.

The Group’s weighted average cost of debt in SA is 8.3% and 97% of debt maturing beyond one year is hedged. The Group has appreciably reduced the all-in cost of debt due to its continued strong performance in the debt capital market, enabling the replacement of maturing debt with significantly lower-cost new debt facilities.  The Group receives strong support from lending institutions, with roughly one-third of all debt sourced from more than 20 different non-bank financial institutions.

Equites’ sustainable development initiatives are now also growing alternative revenue streams

Sound environmental stewardship is a crucial aspect of the Group’s strategic positioning and remains at the core of its operations.

Equites’ strategy for solar PV systems aims to provide tenants with a comprehensive, maintenance-free solution through power purchase agreements (PPAs), which fulfil their energy needs while generating alternative revenue for the Group. The solar generation capacity of the portfolio increased to 27.0 MW, and the number of buildings with solar PV rose from 32 to 37. Six new solar PV systems with capacity of 1.2 MW will be completed during 2H26, and the Group is aiming to install an additional 5 MW over the next two to three years. Six PPAs concluded in the previous financial year contributed to revenue during 1H26, and a further three PPAs concluded during the current period will contribute to revenue during 2H26. The Group plans to increase wheeling capacity by engaging with municipalities, focusing on large-scale installations across entire roof spaces, and capitalising on rates of return well above typical property returns. This strategy will also help the Group meet its SBTi emissions targets and contribute to energy security in SA.

Green certified buildings comprise over 616 422m² of the portfolio, with an additional 243 640m² in the process of certification to meet the highest environmental standards. Equites has also launched several strategic initiatives to enhance water efficiency across its properties and has obtained municipal approval to install an integrated biological wastewater treatment plant, which will significantly decrease reliance on existing water infrastructure. As the first of its kind within the portfolio, this technology is expected to play a crucial role in strengthening water security and is projected to deliver both environmental and financial benefits over the medium to long term.

A robust outlook for the remainder of the financial year

The Board reaffirms its FY26 earnings guidance, targeting a range of 140.62 – 143.29 cents per share, which translates into an increase of between 5% – 7%, as compared to the previous year. This outlook is supported by the strong performance of the underlying portfolio, with SA delivering above-inflation like-for-like rental growth, positive rent reversions in the UK, and the continued tightening of debt costs during the period.

Taverna-Turisan, ended: “The Group remains confident in its ability to drive sustainable value creation for shareholders over time, underpinned by an impeccable property portfolio as well as structural tailwinds in the sector. The Group is well-capitalised and maintains a low exposure to prevailing market risks, positioning it favourably in the current economic landscape. Our track record of developing world-class facilities for our clients continues to unlock opportunities for the fund to grow.

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Highlights for the 2025 financial year include:

Cape Town, 15 May 2025. Equites Property Fund Limited announced its results for the 2025 financial year today, showcasing strong performance from both the South African and United Kingdom portfolios. This success was bolstered by a significantly reduced loan-to-value (LTV) ratio and Equites’ achievement of securing the lowest credit spreads in the sector during FY25. This accomplishment was directly linked to the strength of Equites’ balance sheet and the quality of its underlying portfolio.

Equites CEO, Andrea Taverna-Turisan said: “With the focus on like-for-like (LFL) rental growth both in SA and the UK, limited vacancy during the period and the ability to generate revenue from renewable energy, the Group has delivered distribution per share of 133.92 cps, which is on the upper end of the previously provided guidance.”

 Equites is the only specialist logistics REIT listed on the JSE. From a returns perspective, the industrial sector remained the most favourable property sector in SA in 2024, with a total return of 13.2% for the calendar year according to MSCI. The low vacancy rate, high rental growth and overall sector outperformance are fuelled by intensifying demand from retailers and 3PLs. Limited supply due to a shortage of appropriately zoned and serviced land, along with prohibitive funding costs for many developers, has further constrained availability. The demand for ESG-compliant space remains a key theme driving demand, particularly among multi-national tenants.

The Group focuses on high-quality logistics properties, let to A-grade tenants on long-dated leases. Equites’ portfolio fundamentals are exceedingly robust. The R27.7 billion portfolio is 99.9% occupied, with a WALE of 14 years and strong escalation clauses. Global multi-nationals and large listed organisations form the backbone of the tenant portfolio.  These fundamentals support high-income certainty over a sustained period, bolstering property valuations.

Equites’ R21.1 billion South African portfolio is the cornerstone of the business and delivered LFL rental growth of 5.9%, valuation growth of 6.0%, a WALE of 14.1 years and no vacancy at year-end. The Group has disposed of several smaller, specialised, and non-ESG compliant assets over the last 24 months. The resultant portfolio provides high-income predictability and robust rental and capital growth opportunities aligned with Equites’ commitment to its sustainability objectives.

Equites’ UK portfolio delivered exceptional rental growth over the period, with three assets undergoing rent reviews, resulting in uplifts of between 19% and 69%. The valuations have remained reasonably flat with a 1.0% uplift in GBP terms. The UK portfolio has a WALE of 13.1 years with only a single ancillary unit, representing 1.5% of the UK portfolio, vacant at year-end.

 Capital allocation to maximise value

The Group acquired and developed 14 assets in the UK, with a cumulative development value exceeding £450 million. These assets reached a peak value of £550 million, reflecting the value created over the past nine years. However, as market conditions in the UK changed, the Group needed to reassess whether this capital allocation would yield the highest possible returns for shareholders.

Seven of these assets, along with the Newlands development platform, have already been sold, and the Board has now decided to explore the sale of the remaining UK portfolio. This decision was driven by the maturity of the existing assets and the opportunity to reinvest the proceeds in South Africa. The proceeds from the sales could significantly reduce the loan-to-value (LTV) ratio. Plans are in place to reinvest this capital into newly developed, ESG-compliant logistics facilities on long-term leases in South Africa, which will enhance shareholder value over the long term.

In South Africa, Equites successfully completed a 16,721m² facility at Jet Park in March 2024, let to SPAR Encore. The Jet Park precinct has proven to be a resounding success, and the Group expects to develop the remainder of the Jet Park land within 18 months.

Equites also completed R195 million of improvements to the Shoprite Centurion facility, as part of the existing lease expiring in 2044. Two other Shoprite facilities were completed, both with 20-year leases – the R1.2 billion development of an 80,531m² facility at Wells Estate, Eastern Cape and a groundbreaking R1.3 billion campus in Riverfields, Gauteng.

Three speculative developments with a total GLA of 20,116m² were completed in FY25. Two of these facilities were let before the practical completion date, and the third was let within three months of completion, demonstrating the intensifying demand for high-quality logistics assets in prime nodes. Through the 48 hectares of strategically located land that Equites controls, its development expertise, and its relationships with key retailers, 3PLs, and FMCG players, Equites is strategically positioned to exploit the current supply gap and grow its portfolio of excellence in SA.

Equites CEO, Andrea Taverna-Turisan, said: “We are confident that strong structural drivers underpin the long-term demand for high-quality logistics assets. Our track record of developing world-class facilities and a prime logistics portfolio will continue to attract top-tier clients and promote sustainable value creation for shareholders over time.”

 Optimise the Group’s capital structure and reduce the cost of funding

The Group has reduced its LTV from 39.6% to 36.0%, despite R1.5 billion construction and development spending in FY25. The reduction was driven by R1.4 billion of assets sold in SA at a premium to book value of 1% and R1 billion of assets sold in the UK at a discount of 0.5%, reinforcing the validity of the Group’s property valuations. Successful dividend reinvestment options for the two dividends during the year also contributed to the lower LTV.

The asset disposals and other strategic initiatives ensure that the Group is well capitalised with a low exposure to market risks and is successfully positioned to take advantage of performance-enhancing development opportunities. Given the exciting prospects, the Group has R2.9 billion in cash and undrawn facilities, and sufficient funding to meet maturities without raising new debt. The lower LTV also presents the Group with an opportunity to repurchase its shares where value-enhancing.

Through refinancing debt in South Africa and careful interest rate risk management, the Group’s all-in cost of debt in South Africa decreased from 9.1% to 8.6%, with an average debt maturity of 3.8 years. The UK cost of debt has remained constant at 3.9%, with almost 90% of UK debt maturing in FY33. More than 83% of the debt is hedged against interest rate volatility.

Growing revenue streams from alternative sources while fulfilling our ESG aspirations

ESG is a key aspect of the Group’s strategic positioning and continues to be at the core of its operations. These efforts have been recognised through the Morningstar Sustainalytics ESG Regional top-rated and ESG Industry top-rated company awards, received for the second consecutive year.

In addition to extensive climate-conscious construction initiatives and water efficiency interventions, Equites has dedicated significant time and resources to ensuring its tenants are shielded from electricity-related disruptions due to load-shedding or failing infrastructure. At year-end, the total solar generation capacity in the portfolio was 26.7 MW, with over two-thirds of the portfolio being supplied with solar energy. An additional 4.2 MW of green energy will come online in 18-36 months at a forecasted capital expenditure of R78 million.

Over the last 24 months, the Group has started implementing Power Purchasing Agreements (PPAs) to sell renewable energy generated on Equites’ rooftops to tenants at a discount to prevailing tariffs. Thus far, the Group has entered into a wheeling agreement in the City of Cape Town and has six PPAs in place, and the intention is to grow this revenue component. The Group is looking to increase wheeling capacity through engagement with municipalities, given its capability to generate excess energy from large-scale installations on entire roof space, and capitalise on rates of return well in excess of typical property returns. The execution of these initiatives delivers direct value to tenants while reinforcing the Group’s commitment to its sustainability objectives, generating alternative revenue streams, and contributing to energy security in SA.

Prospects

The Board expects DPS to increase at a rate above inflation going forward, within a target range of 140.62 – 143.29 cents per share – reflecting growth of between 5% and 7%. The Board’s DPS guidance is premised on the strong tenant base, the completion of several large-scale developments at Riverfields, Wells Estate and Canelands in FY25, enhancing revenue in FY26, and the certainty of overheads.

Equites CEO, Andrea Taverna-Turisan, concluded: “Equites has made the strategic decision to invest in assets which offer both income certainty (through tenure) and annual escalation clauses, thereby organically underpinning distribution growth. LFL rental growth for FY25 amounted to 5.9%, a level at which the Group expects to see LFL growth stabilising. By effectively managing administrative costs and the cost of debt, the Group expects to deliver distribution growth consistently higher than South African consumer inflation over the long term.

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