Equites Property Fund (EQU) H1 2025 earnings summary

Executive summary

• Interim distribution declared at ZAR 0.665 (66.50c) per share, up 1.7% year-over-year, maintaining a 100% payout ratio and in line with guidance.

• NAV per share declined to ZAR 16.32 from ZAR 17.14, mainly due to the upfront impact of the ENGL sale and FX movements.

• LTV increased to 41.0% but is expected to decrease to ~38% by February 2025 as disposals complete.

• Major exit from the ENGL UK development platform, reducing UK funding needs and enabling capital redeployment to higher-yielding SA opportunities.

• Both SA and UK portfolios performed in line with expectations, with robust tenant quality, 0% SA vacancy, and long WALE.

Financial highlights

• Net property-related income rose 8.3% year-over-year, driven by rental growth in SA (5.6%) and UK (7%).

• DPS at ZAR 0.665 (66.50c), supported by strong rental escalations and new developments.

• ICR improved from 2.2x to 2.4x; ZAR cost of debt at 9.09%, UK cost of debt at 3.92%.

• ZAR 2.2 billion in cash and undrawn facilities as of August 2024.

• 100% payout ratio maintained; R337m equity raised via DRIP in June 2024.

Outlook and guidance

• Guidance reaffirmed at the upper end of 130–135 cents per share for FY2025.

• LTV expected to reduce to ~38% by February 2025 through further disposals in SA and UK.

• Focus on capital allocation to high-quality, ESG-compliant SA developments and extracting value from UK assets.

• Alternative revenue streams, especially solar and asset management, to be expanded.

• Optimism for SA logistics real estate driven by low vacancies and robust demand.