Equites eyes more UK properties
Industrial-property stock Equites is on an aggressive growth path, eyeing acquisitions worth more than R2bn, which it wants to make in the UK before March 2019.
Industrial property stock Equites is on an aggressive growth path, eyeing acquisitions worth more than R2bn, which it wants to make in the UK before March next year.
The group, which has a market capitalisation of R8bn, plans to grow its asset base by at least 20% each year for the next few years. CEO Andrea TavernaTurisan says many of its buying opportunities are in the UK.
Equites is the only specialist logistics property fund listed on the JSE. It owns warehousetype properties in SA and the UK and services blue-chip companies’ distribution needs.
The company received about R800m last week through a capital raise, some R300m ahead of its target.
The CEO said that fund managers had recognised that Equites had “connectivity to industrial deals in the UK that no other South African funds could get a crack at”.
“We were pleased to get such a positive response from the market. We have a built a platform that really stands out in the UK. Before we listed we had professionals learning about the market and setting up our investment base there.
“Our intellectual property is second to none in that market and we see deals that South Africans just entering the market aren’t privy to,” he said.
Taverna-Turisan said the company wanted to increase its exposure to the UK to 25% of its portfolio. The UK accounted for 16% of Equites’s total revenue in its latest financial results, for the year to February.
Equites has been among the top-performing property stocks since it listed in 2014, with a share price return of 88%. It was one of few funds to declare double-digit dividend growth — of 12.2% — in the latest reporting season. Its property portfolio expanded 30% from R6.2bn to R8.1bn in the year to February.
Industrial property is looking more attractive than other subsectors such as the office market, which has double-digit vacancies on average, and retail, which is being affected by subdued economic growth.
Naeem Tilly, an investment analyst at Catalyst Fund Managers, said Equites’s focus was on buying “last mile” warehouses. These fed secondary towns in the UK, and Equites therefore did not have to compete for expensive logistics assets in the centre of London and other major UK cities. cycle and R500,000 tyres that last about 8,000 hours, it is obvious why this is an area attracting special attention from Kumba’s management at the 31million tonnes a year Sishen mine and the 13-million tonnes a year Kolomela mine.
While Kumba is well behind its peers like Rio Tinto, which has autonomous trucks and trains operating at its Australian iron ore mines, it has started a three-phase approach to introducing as much technology as possible to rein in costs, boost productivity and extract the maximum value from SA’s largest iron ore operation.
The processing plants have been automated, giving a 6.5% improvement in throughput and an 83% improvement in stability, says Glen McGavigan, head of technology at Kumba.