Equites to enter JSE's listed property sector

11 Jun 2014

Equites Property Fund Limited will join the JSE as an office and industrial property manager and developer later this month.

Equites' Andrea Taverna-Turisan believes a listing will give investors an opportunity to participate in a quality development and management company. Image: Equites

Equites is following the lead of a number of funds looking to join the JSE's listed property sector. Last year‚ the sector saw a number of listings‚ followed by a large degree of consolidation in the first five months of this year‚ along with several additional listings.

Equites Chief Executive Andrea Taverna-Turisan said the internally managed fund was focused on high-quality industrial assets at the top end of the industrial property sector‚ with a selective exposure to office property.

Its portfolio of 17 Western Cape-based industrial and office properties includes 124‚253m² of rental space and is valued at R1.2bn. Equites is structured as a real estate investment trust (Reit)‚ a globally accepted structure adopted by the JSE in May last year.

Taverna-Turisan said the fund was excited to bring a top-quality portfolio of properties to investors.

Strong portfolio

"The portfolio properties are situated in prime locations‚ have very low vacancies with occupancy in excess of 97%‚ and at least 77% of the portfolio has leases for longer than three years‚ with healthy escalations averaging 8.1%‚" he said.

Major tenants included Simba‚ Foschini‚ Execujet‚ Digistics‚ Imperial‚ Puma‚ UTI (Adidas)‚ Avery Dennison‚ Courier-IT‚ Kuehne & Nagel‚ NGK Ceramics‚ Dole USA and Barloworld.

The fund was pursuing a private placement of shares to raise between R400m and R650m‚ with vendor participation of more than 50%.

Equites plans to development the land it owns and upgrade existing buildings.

Taverna-Turisan said the fund had an attractive pipeline of significant A-grade industrial developments and planned to expand into prime logistics zones in Gauteng and KwaZulu-Natal in the medium-term.

"With a low level of gearing of 8.3%‚ there was scope for significant yield-enhancing acquisitions financed with debt funding‚" he said. Equites was aiming to grow the portfolio to R4bn within five years.

Source: I-Net Bridge

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