Equites lifts dividend 5.1% as SA logistics investment surges

Equites Property Fund has delivered stronger earnings, reduced debt and accelerated its South African logistics expansion, backed by a R2 billion development pipeline and its strategic exit from the UK.

• Interim dividend rises 5.1% to 72.57 cents per share, with distributable earnings increasing 10.5% to R630.1 million.
• R2 billion logistics development pipeline takes shape as Equites redirects capital from its UK exit into South African industrial property.
• Balance sheet strengthens significantly, with loan-to-value falling to 28.1%, vacancies at just 1.5% and R2.9 billion in available liquidity.

Logistics REIT strengthens its South African growth strategy

JSE-listed Equites Property Fund has reported a solid set of interim results for the six months ended 31 August 2026, underlining the resilience of premium logistics property and the growing investment opportunity in South Africa’s industrial real estate sector.

The specialist real estate investment trust (REIT), which focuses on high-quality logistics facilities, declared an interim dividend of 72.57 cents per share, representing 5.1% growth on the corresponding period last year.

More significantly, distributable earnings increased 10.5% to R630.1 million, while the group strengthened its balance sheet and accelerated capital investment into South African logistics developments.

The results, released on 15 October 2026, reflect a decisive strategic shift: Equites is substantially exiting the United Kingdom to concentrate its investment capacity on the South African market.

Inside Equites’ logistics portfolio

Equites specialises in developing, owning and managing modern logistics and distribution properties designed for corporate occupiers requiring efficient warehousing and supply-chain infrastructure.

Its investment strategy centres on high-specification logistics facilities, supported by long-term property fundamentals and demand for modern distribution infrastructure. The portfolio’s operational strength is reflected in several key indicators:

• Vacancy rate: Just 1.5% at 31 August 2026.
• Solar generation: 28.2MW of installed rooftop solar capacity.
• Renewable energy: 75% of the portfolio has solar installations.
• Development focus: Six projects currently underway in South Africa.
• Capital recycling: Proceeds from UK disposals are being redirected towards South African logistics assets.

For investors, the low vacancy rate provides an important indication of the portfolio’s occupancy resilience, while renewable energy investment strengthens the attractiveness of facilities to energy-conscious occupiers.

Financial results: Earnings and dividends climb

Equites delivered strong growth in earnings despite lower gross property revenue, partly reflecting the reshaping of its portfolio.

Key financial highlights for the six months ended August 2026:

• Gross property revenue: R1.50 billion, down 10.1%.
• Distributable earnings: R630.1 million, up 10.5%.
• Earnings per share: 143.0 cents, up 41.4%.
• Headline earnings per share: 88.9 cents, up 67.2%.
• Total comprehensive income: R1.52 billion, up 27.9%.
• Interim dividend: 72.57 cents per share, up 5.1%.
• Net asset value: R17.43 per share, up 2.9% year-on-year and 4.5% since February 2026.
• Distribution payout ratio: Maintained at 100%.

The combination of rising distributable earnings and dividend growth reinforces Equites’ income proposition, although investors should distinguish between recurring operating performance and accounting gains reflected in reported earnings.

R2 billion South African development pipeline

One of the most important developments is the group’s accelerated reinvestment into South African logistics property. During the six-month period, Equites deployed R600 million into developments and acquisitions, while advancing six projects currently under construction.

The development programme includes:

• Six active developments with a combined projected capital value of R2 billion on completion.
• R1 billion of remaining development expenditure.
• Target development yields on cost of 8% to 9%.
• Continued reinvestment into high-quality South African logistics assets.

These projects position Equites to grow its domestic income-producing portfolio as capital is released from the UK.

The anticipated development yields are particularly relevant to investors, although the eventual contribution to earnings will depend on delivery, leasing performance and financing costs.

UK exit releases capital for local expansion

Equites has made substantial progress in winding down its UK investment exposure. A major milestone was the completion of the £200.5 million Aviva portfolio disposal in May 2026, involving five income-producing logistics assets.

Following the transaction, three UK assets remained, including DHL Leeds, which is being marketed for disposal within the next 12 months. The strategy is designed to simplify the group’s geographic exposure and redeploy capital into South African opportunities where management sees attractive development economics.

Rather than pursuing growth through additional borrowing or issuing new equity, Equites intends to use its strengthened financial position to fund expansion.

Stronger balance sheet provides investment firepower

Equites ended August 2026 with a substantially lower debt burden and significant liquidity available for investment.

Balance sheet highlights:

• Loan-to-value ratio: Reduced to 28.1% from 35.1% in February 2026.
• Available liquidity: R2.9 billion in cash and undrawn facilities.
• Debt capital raised: R650 million through three-year and five-year instruments.
• Capital strategy: Fund further development through existing balance sheet capacity.
• B-BBEE rating: Level 2 maintained.

Management expects gearing to increase progressively towards its normal operating range as investment capital is deployed.

Management outlook: Growth without new equity

The group’s interim announcement places considerable emphasis on disciplined capital recycling, maintaining financial flexibility and investing in South African logistics developments.

Management has reaffirmed full-year distribution guidance of 147.7 to 150.5 cents per share, representing expected growth of 5% to 7%, based on a 100% payout ratio.

The company also indicates that its existing financial headroom should allow substantial capital deployment without immediately returning to debt or equity markets for additional funding.

This is a significant strategic advantage at a time when the cost and availability of development capital remain important considerations for listed property investors.

What the results mean for property investors

Equites’ results demonstrate that logistics property remains an important investment segment within South Africa’s listed property market. Three factors stand out: strong occupancy, rising distributions and the capacity to finance new developments from existing resources.

The group’s UK exit also marks a meaningful vote of confidence in domestic logistics investment opportunities, although successful execution of the development pipeline will remain critical.

The investment takeaway: Equites is moving from international capital recycling into a new phase of South African logistics growth, with a stronger balance sheet, substantial development commitments and reaffirmed distribution guidance.

For shareholders, the next test will be whether that investment programme translates into sustained earnings and dividend growth.

Source: Equites Property Fund unaudited interim results for the six months ended 31 August 2026, released on SENS on 15 October 2026.