Equites benefits from shift to online shopping


Equites benefits from shift to online shopping

Published Date: 2019-10-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Equites benefits from shift to online shopping

The specialist logistics property group says demand from e-commerce and large logistics companies has supported growth in distributable earnings.

Equites Property Fund continues to benefit from shifts in the retail sector as e-commerce gains traction. While the specialist logistics property group initially supported the need for modern logistics facilities from retailers, this has now been augmented by demand from e-commerce and large logistics companies. It believes rising land prices, large capital requirements and the technical capability required are creating barriers to entry in the sector, supporting rental growth.

The real estate investment trust (REIT) invests exclusively in logistics properties in SA and the UK, growing its portfolio by a third to R3.4 billion in the six months to end-August. It completed four developments that added R718 million to its portfolio and started four new ones that will add a further R558 million of capital value. All current developments are for specific tenants as returns on speculative properties have come under pressure due to the current economic climate.

In SA, it believes its strategic land holding will add a further 500,000 square metres to its portfolio over time, while it has invested R455 million into strategic land holdings in the UK.

Gross property revenue jumped 47% to R492 million over the period and distributable earnings rose 31% to R406 million. Like-for-like rental growth was up 7.3%. It's raised its interim dividend by 9.3% to 74.4c per share. Its net asset value per share increased by 6% to R17.37.

The REIT is sticking to its guidance of an 8-10% increase in its full-year dividend, with growth likely to be in the upper end of its target band.

Its shares closed 0.5% higher at R21.40.

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