JSE-listed Equites Property Fund has concluded a R2 billion debt, refinance and upsize package with Standard Bank.
The deal comprises an R800 million three-year sustainability-linked (SL) unsecured bond, a £50 million two-year SL loan including a £25 million upsize; and a R221 million three-year loan.
Equites, the country’s only exclusively logistics-focused real estate investment trust (Reit), says the sustainability-linked financing facilities will help the Reit to maintain its focus on sustainable building practices, increasing renewable energy usage and promoting supplier enterprise development.
“Equites has committed to ensuring that all new developments are green certified, that renewable energy consumption across its portfolio of high-grade logistic assets is increased each year, and to increasing its investment with enterprise and supplier development partners as part of Equites’ Ampcore programme,” it said in a statement.
“As part of our focus on becoming a globally relevant Reit, Equites is dedicated to offering our tenants high-quality logistics assets built to exacting green standards and in assisting our tenants in their move towards renewable energy, with all renewable energy generated provided to the tenant at no cost,” Equites CFO Laila Razack said.
The conclusion of this agreement makes it the first pound sterling (GBP) denominated SL loan for the country’s Reit sector and the first GBP-denominated loan in SA with sustainability linked features.
“This restructure is very much a continuation of our strong partnership with Equites to support them in structuring and investing in their maiden listed SL bond and equally to further back them in their United Kingdom growth ambitions through the additional longer-term GBP SL funding,” Lloyd Anderson, manager of real estate finance at Standard Bank, said.
On the hunt for ‘new activities’
The announcement of the continuation of a partnership between the two parties comes after Equites announced last week that it will enter into a joint R1.45 billion venture with the Eskom Pension and Provident Fund (EPPF).
Equites, which has pledged R732 million to the venture, will gain a 51% stake in the venture. The undertaking will allow EPPF members to diversify their portfolio and expose them to logistics-focused assets. The deal will see the two parties buying a R2.05 billion distribution centre from DSV Real Estate.
The Reit, which reported a strong balance sheet in its half-year results earlier this month, spoke robustly about its intentions to plough R4.2 billion worth of investments into what it calls ‘new activity’.
“This transaction reaffirms our commitment to developing sustainable finance solutions, as corporates and investors increase their focus on ESG [environmental, social and governance] considerations in supporting their communities and the environment,” Standard Bank sustainable finance executive Anneke Lund said.
And according to Warren Douglas, head of treasury at Equites: “In working with Standard Bank on this transaction, we found a partner that understood our commitment to sustainability and with which we could collaborate in designing KPIs [key performance indicators] that will stretch the commitment of Equites in several spheres of sustainability – green certification of buildings, a rapid expansion of solar PV for our tenants to increase the reliance on renewable energy, and the upliftment of small enterprises through our Ampcore ESD programme.”