JSE-listed logistics specialist real estate investment trust Equites CEO Andrea Taverna-Turisan says that, although the company's investments slowed during the financial year to February 28, compared with the 2024 and 2025 financial years, Equites is expecting a “bumper” two years of investments in 2027 and 2028.

The financial year under review marked the transition from a period of UK asset recycling and balance sheet optimisation to one of disciplined capital deployment and growth, with South Africa prioritised as the primary engine of earnings and value creation, he said during a presentation of the company's results on May 14.

The company had invested more than R2-billion during its 2024 and 2025 financial years, which had declined to under R1-billion during the year under review as part of a strategic pause, he added.

During the financial year under review, the company invested R146-million in strategic acquisitions of land in Riverfields, in Gauteng, and a site in Gqeberha, in the Eastern Cape. It also invested R600-million in development spend for the period, largely in Riverfields, Jet Park and Meadowview, all located in Gauteng.

The deployment of R700-million into development activity partially offset the reduction in loan-to-value ratio to 35.1%, down from 36% at the end of the 2025 financial year.

As Equites continues to deploy capital in key strategic nodes such as Riverfields, and once practical completion has been reached on speculative developments in Jet Park, both the percentage of exposure to these areas and weighted average lease expiry in these nodes would increase, and thereby rebalancing the exposure of the portfolio, he added.

Further, its current development pipeline focused on pre-let and speculative developments and was expected to increase in the 2027 and 2028 financial years.

South African land for future development comprises 1% of the portfolio, and the group is actively seeking well-situated, appropriately zoned land on which to execute future requests for proposals.

Additionally, the group's distributions per share grew by 5.3% to R1.41 a share, driven by like-for-like rental growth of 5.4% in South Africa and 4% in the UK, in addition to contributions from developments and lower funding costs.

The South Africa portfolio was the primary driver of this growth, with high occupancy, positive rental growth and strong tenant demand, leading to valuation uplifts and a 1.2% increase in net asset value a share to R16.69.

The growth in distributions a share was at the lower end of the previous guidance of 5.7% growth for the 2026 financial year, owing to the sale of noncore assets taking longer than anticipated.

Therefore, the benefits of these transactions were expected to only filter through the organisation during the course of the current financial year, he said.

Further, Equites was awarded the request for proposal to develop a 90 000 m² logistics facility for JSE-listed fast-moving consumer goods company Tiger Brands.

The group also started two speculative developments at Jet Park, totalling 17 500 m² gross lettable area, that were expected to be completed in August and which had received strong interest at R95/m².

Once complete, Jet Park will be fully developed, which will mark the completion of the transformation of a brownfield site from farmland into a high-quality logistics park.

Additionally, Equites began a speculative development at the X102 site at its Riverfields park, in Ekurhuleni, which is scheduled to start in July.

The company currently has a total of 170 000 m² in proposals out to the market, at an average rental of R93/m². This level of activity has been driven by third-party logistics service providers, automotive parts suppliers, and fast-moving consumer goods retailers.

Meanwhile, Equites' portfolio value was R28.7-billion, of which R4.9-billion relates to the UK portfolio which is classified as held-for-sale, which is 3.6% higher year-on-year.

The group continued to execute on its strategic priorities, including the rationalisation of its UK portfolio and the redeployment of capital into South African opportunities offering superior long-term growth prospects. This strategy is expected to enhance earnings quality and improve capital efficiency over time, said Taverna-Turisan.

As a consequence, the entire UK income-producing portfolio was disclosed as held-for-sale as at February 28 and the insurance company Aviva portfolio has subsequently been disposed of for £200.5-million.

In terms of its outlook for the current financial year, Equites is forecasting distributions a share of R1.47 to R1.50, which implies distribution growth of 5% to 7% year-on-year.

This outlook is supported by the South Africa portfolio, which continues to provide a strong and stable base for growth through its long weighted average lease expiration and contractual lease escalations.

“We are excited about the exceptional opportunities available to the group, which is supported by structural tailwinds in the sector, our proven record of developing world-class facilities for clients, and a very robust balance sheet to fund our investments.

“We remain confident in our ability to deliver sustainable shareholder value over time, underpinned by an exceptional property portfolio that continues to unlock meaningful growth opportunities,” says Taverna-Turisan.