Equites raises R1.015bn through a book build

The Star Early Edition - - COMPANIES - Roy Cokayne

LISTED spe­cial­ist in­dus­trial prop­erty de­vel­oper and land­lord, Equites Prop­erty Fund, raised R1.015 bil­lion through an ac­cel­er­ated book build yes­ter­day af­ter ear­lier an­tic­i­pat­ing rais­ing about R400 mil­lion through the is­sue of new shares sub­ject to pric­ing ac­cept­able to the fund.

The com­pany an­nounced the ac­cel­er­ated book build early yes­ter­day, but sub­se­quently an­nounced the ac­cel­er­ated book build process would close for fur­ther ap­pli­ca­tions at 1pm.

It added that the eq­uity raise had been in­creased to the is­sue of the max­i­mum of 59.02 mil­lion shares in light of strong de­mand to its ear­lier an­nounce­ment.

“At an in­dica­tive clos­ing price of 1 720c a share, this would amount to an eq­uity raise of R1.015bn, at which level the book is well over-sub­scribed,” it said.

The eq­uity raise fol­lowed hard on the heels of Equites’ an­nounce­ment on Wed­nes­day that it had con­cluded an agree­ment with Travis Perkins Prop­er­ties to ac­quire a re­cently de­vel­oped 19 909m² dis­tri­bu­tion cen­tre in Coven­try in Eng­land for £41m (R696.4m).

This trans­ac­tion is sub­ject to the seller en­ter­ing into a 15-year lease with Kuehne+Nagel be­fore Oc­to­ber 6 this year, with the pur­chase con­sid­er­a­tion based on the first year’s rental in­come of £1 985 000.


At the same time Equites con­firmed the com­ple­tion of the pro­posed ac­qui­si­tion by Equites In­ter­na­tional of a 19 511m² dis­tri­bu­tion cen­tre that was let to DSV So­lu­tions at Prol­o­gis Park in Side­way in Stoke-on-Trent in Eng­land for £18.14m.

The DSV prop­erty was in the process of be­ing de­vel­oped by Prol­o­gis UK for DSV, which had en­tered into a 10-year lease with the seller, Tango Real Es­tate, a joint ven­ture ve­hi­cle be­tween Prol­o­gis UK and Wit­ting­ton In­vest­ments.

This trans­ac­tion was there­fore sub­ject to sev­eral con­di­tions prece­dent, in­clud­ing the com­ple­tion of the de­vel­op­ment by Prol­o­gis and the lease be­tween DSV and the sell­ers be­com­ing un­con­di­tional.

Equites said the ac­qui­si­tion of the dis­tri­bu­tion cen­tre in Coven­try was con­sis­tent with its stated growth and in­vest­ment strat­egy, which in­cluded di­ver­si­fi­ca­tion into the UK to mit­i­gate the risks of its emerg­ing mar­ket fo­cus and ac­cess the ad­vanced know-how and tech­nol­ogy about lo­gis­tics fa­cil­i­ties in the UK.

The strat­egy also in­volves fo­cus­ing on pre­mium “big­box” dis­tri­bu­tion cen­tres, let to in­vest­ment grade ten­ants on long-dated “triple net leases”, in proven lo­gis­tics nodes and built to in­sti­tu­tional spec­i­fi­ca­tions and build­ing a high qual­ity lo­gis­tics port­fo­lio, con­sist­ing of prop­er­ties with pre­dictable rental growth pro­files that pro­moted cap­i­tal growth and in­creas­ing in­come re­turns over the medium to long term.

Equites added that ev­i­dence of the sound in­vest­ment fun­da­men­tals of the Coven­try dis­tri­bu­tion cen­tre prop­erty in­cluded that the prop­erty, which met mod­ern lo­gis­tics re­quire­ments, was lo­cated im­me­di­ately ad­ja­cent to Jaguar Land Rover’s World Head­quar­ters and global engi­neer­ing cam­pus in Coven­try in the in­dus­trial “golden tri­an­gle”, the most im­por­tant lo­gis­tics hub in the UK.

Shares in Equites dropped 0.17 per­cent yes­ter­day on the JSE to close at R17.78.

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