Logistics-focused Equites Property Fund has upped its annual distribution per share by 5.2% (to 162.99 cents) for the year ended February 28, 2022.
Releasing its latest results on Wednesday, the JSE-listed real estate investment trust (Reit), effectively upped its full-year dividend by the same margin after declaring 100% of distributable earnings.
The group declared a final dividend of 84.61c a share for FY2022. Together with its interim dividend of 78.38c per share, its total dividend per share for the year came in at just shy of 163c.
While Equites has declared 100% of distributable earnings the group, which currently trades at around an 18% premium to its net asset value (Nav), continues to offer its shareholders the option to reinvest dividends through its dividend reinvestment programme (Drip).
Equites invests in logistics property assets in South Africa and the UK, with its overall portfolio valued at R25.7 billion at the end of its latest financial year.
“The board has decided to declare 100% of distributable earnings as a dividend on a biannual basis for the foreseeable future and will continue to promote its Drip as a tax-efficient mechanism to retain a proportion of distributable earnings for future expansion,” Equites notes in a results statement.
“Distribution per share grew by 5.2%… a function of strong growth in like-for-like net rental income, excellent property performance and efficient capital management.”
Double-digit total return growth
While the era of double-digit distribution or dividend growth seems over for now for most SA Reits, Equites was not shy to highlight the fact that it achieved double-digit growth from a total return perspective for its shareholder for FY2022.
“Nav per share increased by 7.9% to R18.61 and delivered a 9.4% distribution yield, culminating in a total return of 17.3% for the year,” it notes.
It says FY2022 saw “intensifying demand” for logistics properties, culminating “in the most active year in Equites’ history, with investment opportunities of R4.3 billion funded”.
“The largest transaction in the financial year was the acquisition of the DSV Campus in SA for R2.05 billion, in partnership with Eskom Pension and Provident Fund. The partnership unlocked an attractive alternative source of equity for further expansion.
“The group also purchased a 50% stake in three properties in Waterfall from Attacq, for a total consideration of just more than R500 million,” it further highlights.
“Logistics properties globally continue to outperform, supported by sustained demand in the tenant and investor markets,” comments Equites CEO Andrea Taverna-Turisan.
“The UK market is especially strong and has set new records across all metrics, which include a record low vacancy rate, a surge in market rental growth as well as a significant increase in land values. Our partnership with Newlands is capitalising on this golden opportunity where there is a significant mismatch between demand and supply in the market, which will ultimately continue to create substantial value for Equites’ shareholders,” he adds.
“In SA, the prospects have never been better in terms of the potential pipeline of developments as well as rental growth expectations, as the national vacancy rate for A-grade warehousing is at an all-time low and companies increase their focus on supply chain optimisation,” notes Taverna-Turisan.
Listen: Laila Razack, CFO of Equites Property Fund, discusses ‘booming’ logistics assets with Fifi Peters