Equites raises R1.015bn through a book build

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.

Acquisition 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.