File picture: James White
File picture: James White

Reit lifts its dividend after healthy 9.9% rental growth

By Edward West Time of article published May 6, 2020

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CAPE TOWN - Specialist Reit Equites increased its dividend after lifting its distribution per share 9.4percent to 138.43 cents for the year to end February.

The group said yesterday that distribution growth was mainly from the healthy 6.9percent increase in like-for-like net rental income on the weighted average lease expiry period of 10.2 years.

It said loan-to-value fell to 26.1percent from 26.9percent last year.

The group said it collected 92.8percent and 100percent of contractual rental due on lease agreements in South Africa and the UK, respectively.

While the UK portfolio continues to grow, the South African portfolio contributed 74.5percent of total revenue this year.

The largest single geographic concentration was in Gauteng, with 48.3percent of its portfolio situated in the region. The group viewed this region as the hub of South African logistics and has continued to focus its growth efforts there.

Its premium logistics properties have grown from R1billion at listing in 2014 to R15bn on February 29.

Equites chief executive Andrea Taverna-Turisan said there was still much uncertainty about the outcome of the Convid-19 pandemic on the South African economy.

Taverna-Turisan said the UK was more robust and the signing of three substantial deals in the middle of the lockdown indicated that the economy appeared to be pulling out of the lockdown.

He said the UK government allowed e-commerce to thrive through the lockdown unlike in South Africa where the country lost an opportunity as a result of the ban.

Cash and available facilities of R1.5bn represented an increase of R600million from February 28 last year.

Net asset value per share increased 3.7percent over the financial year to R17.55, reflecting a compound annual growth rate since listing exceeding 10percent.

Gross property revenue increased 29.7percent to R993.7m. The full-year dividend increased 9.4percent to 151.39c a share, following the declaration of a final dividend of 76.96c a share.

The group deployed capital and increased the portfolio by R2.9bn (24.4percent) from February last year by year end.

“We remain cautiously optimistic that opportunities will arise from our position of strength,” Taverna-Turisan said.

The group completed seven developments valued at R1.3bn during the period and six logistics facilities with a capital value of R1.1bn.

Loan to value levels over the past five years remained below the 35percent upper limit of its target range. The company raised R1.55bn through oversubscribed accelerated book-builds in August last year and March this year.

Taverna-Turisan said driving demand for high-quality logistics properties was the need for efficient supply chain management, the many technological developments in that space, the growth of e-commerce, both business-to-business and business-to-consumer, and the consolidation and cost-saving benefits that could be derived for businesses from a strategically well-positioned transport logistics facility.

In South Africa, Equites granted a three-month cash-flow relief to tenants representing 3.7percent of total contractual rental and six months to a further 1.1percent of their tenants.

Equites shares rose 0.38 percent on the JSE yesterday to close at R15.86.


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