EQUITES PROPERTY FUND LIMITED - Sale of a distribution centre in Peterborough, United Kingdom

Sale of a distribution centre in Peterborough, United Kingdom

EQUITES PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/080877/06)
Share code: EQU
ISIN: ZAE000188843
JSE alpha code: EQUI
(Approved as a REIT by the JSE)
("Equites" or "the Group")


SALE OF A DISTRIBUTION CENTRE IN PETERBOROUGH, UNITED KINGDOM


1    INTRODUCTION

     Equites, through its Isle of Man based wholly owned subsidiary, Equites International Limited ("Equites
     International"), concluded a sale agreement ("Sale Agreement") in terms of which Equites
     International will be selling a high-quality distribution centre situated at Waterworth Road, Alwalton Hill,
     Peterborough (the "Property") in the United Kingdom ("UK") to Amazon UK Services Limited, a
     subsidiary of Amazon.com Inc. ("purchaser" or "Amazon") for a cash consideration of £38.5 million
     (exclusive of VAT), equating to a transaction yield of 5.17% (the "Transaction"). The Property is
     currently being let to Amazon with 12 years remaining on the lease.

     The Transaction will release net cash proceeds of approximately £21.3 million (R490 million) to Equites,
     in addition to lowering the loan-to-value ("LTV") ratio and enhancing the growth profile of distributable
     earnings per share over the long term.

2    RATIONALE FOR THE SALE OF THE PROPERTY IN PETERBOROUGH

     The Equites Board continuously evaluates its portfolio and applies a range of investment criteria against
     every property to determine a specific strategy in respect of each property. Factors considered include
     the quality and flexibility of the asset, the potential selling price and the ability to recycle the proceeds
     from the sale into superior product and/or at superior returns.

     The sale of the Property is consistent with Equites' strategic disposal programme that has previously
     been communicated to shareholders. The disposal will reduce the LTV ratio, with proceeds initially
     being used to reduce both GBP and ZAR debt, and thereafter be invested in accretive projects within
     the South African development pipeline.

3    TERMS OF THE TRANSACTION

     The purchase price of £38.5 million was paid to Equites on Friday, 22 November 2024 ("Transfer
     Date").

     There are no outstanding conditions precedent and the Transaction exchanged and completed on
     Transfer Date.

     Equites International has been released from their obligations as set out in the development agreement
     which regulated the respective obligations of Equites and Amazon during the construction phase of the
     Property. In turn Equites International has ceded and assigned its rights under the construction
     contracts to Amazon.

     Under the Sale Agreement, Equites International has given a limited suite of warranties, which is
     considered standard in transactions of this nature.

4    VALUATION

     The last independent external valuation, performed by Cushman and Wakefield, in accordance with
     the "RICS Valuation – Professional Standards, the 2012 Edition" (the "Red Book") valued the Property
     at £38.2 million.

5    FINANCIAL EFFECTS AND DETAILS OF THE PROPERTIES

     At 31 August 2024, the Property was classified as "held-for-sale" and recognised at the expected
     sales value of £38.5 million. As the disposal value is in line with the carrying value at 31 August 2024,
     there is no impact on Equites' net asset value.

     The contribution to net profit after tax (including fair value adjustments and finance costs) for the six
     months ended 31 August 2024 amounted to £160,594.

         Property Name        Geographical         GLA         Property        Weighted average
                              Location            (m2)         type           rental per m2 per
                                                                                          month*

         Amazon               Peterborough,     13 318         Logistics                R323.35
         Peterborough         UK
         Gateway
        
     *Based on a GBP/ZAR exchange rate of ZAR23.3172.


     The Transaction will decrease the Group LTV ratio by approximately 1.9%, thereby reducing LTV to
     below 40%.

     The Transaction will be marginally accretive to distribution per share ("DPS"), as net cash proceeds
     will be utilised to repay rand-denominated debt. This has been taken into account in the DPS guidance
     for FY25.

     This information has not been audited and was extracted from the Group's interim results for the six
     months ended 31 August 2024, which were prepared in terms of International Financial Reporting
     Standards.

6    CATEGORISATION

     The Transaction is a category 2 transaction in terms of the JSE Listings Requirements and
     accordingly does not require approval by shareholders.

26 November 2024


Corporate advisor and sponsor to Equites
Java Capital

Debt sponsor 
Nedbank Corporate and Investment Banking, 
(a division of Nedbank Limited)
Date: 26-11-2024 12:15:00
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