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Equites continues to focus on diversification

Equites continues to focus on diversification

Photo by Bloomberg

16th October 2015

By: Megan van Wyngaardt

Creamer Media Contributing Editor Online

  

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JSE-listed Equites Property Fund has successfully diversified its portfolio, creating a greater footprint in Gauteng, owing to the additions of the R1.9-billion Intaprop property portfolio; the acquisition of 14 ha of Lords View Land, near Linbro Park; and the acquisition of the 13 808 m2, R137-million Tunney Ridge property, in Germiston.

At a presentation of the company’s results in Johannesburg, CEO Andrea Taverna-Turisan explained that, prior to listing on the JSE in June, the company’s entire portfolio was based in the Western Cape, but that 55.1% of its portfolio was now based in Gauteng.

“Gauteng is the economic hub of South Africa. Many organisations use it as their base. While Cape Town is perhaps more stable, safer and holds less competition, Gauteng is where it’s at,” he said, adding that the province also held more appeal as the company could invest in larger properties than it could in the Western Cape.

The company was also considering expanding into other provinces, particularly KwaZulu-Natal.

Equites, meanwhile, reported “unexpected and fantastic growth” in the six months ended August 31, with distribution of 45.5c a share – 11.5% higher than in the corresponding period the year before and exceeding its forecast by 4.7%.

Its net asset value a share grew by 10.73% to R12.59 for the six months, which equated to a 28.3% growth since listing.

The value of the company’s property portfolio now exceeded R3.4-billion and was expected to grow to R4-billion by February 2016.

The company said its industrial portfolio remained fully let, while vacancies in the office portfolio dropped from 2.2% to 0.96%, representing 0.17% of its total lettable area.

Included in the Intaprop acquisition was one industrial property of about 6 250 m2 and 200 m2 of office space that was currently vacant. However, the company noted that it was receiving income on these sites under rental guarantee that was included in the acquisition agreement and were not included in its total vacant areas.

Taverna-Turisan added that the company owned 43.5 ha of vacant land and that Equites was close to signing a development lease with a blue-chip tenant to develop a 5 ha distribution centre at its 15.8 ha land in Linbro Park, while 3 ha of its 17 ha of land in Midrand had been reserved for the R150-million extension of fast-moving consumer goods company TFG’s distribution centre.

Further, the company had signed a R155-million contract to develop 2.3 ha of its 5.4 ha land in Contermanskloof, in Cape Town, to house a new a distribution centre and head office for apparel brand Puma Sports Distributors. At its 5.3 ha Saxdown Park, also in Cape Town, the company believed the key logistics node would easily secure development leases.

After the already concluded transactions, 38.2 ha of vacant, zoned land was still available for development, where the company was looking to develop distribution centres for A-grade tenants.

“We envisage unlocking all this land within three to four years,” Taverna-Turisan highlighted, adding that all these nodes were expected to increase the value of properties in the fund by about R1.8-billion.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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