Equites, has announced plans to acquire Canelands logistics campus in KwaZulu-Natal, in South Africa and further extend the facility.
The JSE-listed specialist logistics real estate investment trust will purchase the facility from retail group Shoprite for R638-million. The move aims to pursue growth in South Africa through high-quality acquisitions and developments, and the transaction meets Equites’ strategic objectives.
Canelands logistics campus
The campus will be extended by a further 37 452 m2 totalling 103 071 m2, and will be a world-class, secure and integrated logistics campus that meets Shoprite’s specifications and operational requirements. The facility will be let to Shoprite on a 20-year lease, with a right to renew for three additional ten-year periods, which substantially increases the weighted average lease expiry period of the portfolio. The Development Lease Agreement will be a fully repairing and insuring lease.
“The transaction increases Equites’ exposure to Africa’s largest food retailer Shoprite and thereby enhances the defensiveness of its tenant base. The campus will be a state-of-the-art distribution facility supporting various functions of Shoprite’s supply chain. The transaction also supports Equites’ commitment to sustainability, as the extension will be designed in line with Excellence in Design for Greater Efficiencies Green Building Certification requirements and the long-dated, annuity income stream presents opportunities to reduce Equites’ cost of debt funding over time, thereby enhancing returns to shareholders,” said Equites.
Equites’ objectives also include increasing its exposure to the logistics sector in South Africa, which continues to outperform, as well as creating further scale in its high-quality logistics portfolio with stable and predictable rental growth profiles, which enhances capital and income growth in the medium to long term.