Equites Property Fund (EQU) Pre-close call summary

Executive summary

• Significant capital deployment in logistics developments, with major projects for Tiger Brands, TFS, DHL, Shoprite, and Premier FMCG underway or completed in key South African nodes.

• UK portfolio rationalisation advanced, with the Aviva (Springboks) portfolio disposed of for GBP 95 million, proceeds partly repatriated to South Africa to reduce debt and partly reinvested in UK REITs.

• Portfolio management remains proactive, with new leases signed, renewals at positive reversions, and disposals executed to optimise asset mix.

• Portfolio vacancy remains below 2%, with strong leasing activity and positive rental reversions on renewals.

• Optimism for continued growth, supported by a robust development pipeline and strong tenant demand.

Trading performance and revenue trends

• Listed property delivered a 10.5% total return in the period, outperforming bonds and equities, with industrial logistics assets leading sector performance.

• Modern logistics facilities command rentals above ZAR 90/sq m, with Western Cape and eThekwini rents exceeding ZAR 100/sq m due to land shortages.

• Demand for modern logistics facilities remains robust, driven by FMCG, supply chain optimization, onshoring, and e-commerce growth, supporting high occupancy and rental growth.

• Two speculative developments in Meadowview completed and fully let at favorable rentals, with leases commencing 1 September.

Profitability and margins

• Weighted average positive rental reversion of 3% achieved on renewals in Meadowview precinct and 1H27.

• New developments targeting yields of 8%-9%, anchored by blue-chip tenants.

• For FY 2028, eight leases expiring are expected to see an average negative reversion of around 9%, mainly in older, non-park buildings.