Good morning, everybody, and welcome to Financial Year 2025 Results Presentation for Equites Property Fund. We welcome everybody online watching us today from beautiful Cape Town. Beautiful sunny day here, which ties in, I think, extremely well with the presentation we're about to give you today. I think we're gonna start with maybe a little bit on the year in review. I think it's a powerful slide this in terms of what we've achieved in the last year. Really it resonates with what we've indicated to the market over the last two years of the intention of the business. We continue to unlock world-class logistics facilities in S.A.
In that vein, we've completed a further ZAR 3.2 billion worth of facilities during the course of this financial year. We further committed to the fact when we sold out of our Newlands development platform in the U.K. that the development activity in the U.K. basically is a part of our past, if you like. In that process, we are working through the extraction of our value in the remaining parcels of land in which we still have an interest. We obviously want to do that in an orderly way, and would like to sell off the pieces, and we'll talk to that in a bit more detail, as we go through the presentation.
Further to that, I think you know, Riaan will talk to it in a lot more detail later in the presentation. We've implemented a very strategic sell program, and this was a consequence of two things. Firstly, that we had this significant development pipeline, which we don't foresee sort of slowing down. It'll have very good years, and it'll have some good years. I don't think we'll ever see not so good years. I think the future looks well. We also committed to making sure that our balance sheet always remained strong.
In so doing, we found the opportunity over the last two years to undergo a sales program of selling assets that firstly were non-core, but secondly, some of the assets that maybe were a little bit older still had some good meat on the bone. The consequence of which is, we got some really good pricing. Again, as I said, Riaan will talk to the detail of that in a little bit, in the presentation. Following on from that, I mean, I think it talks to the high caliber portfolio that we own. We've had four leases renewed during the last financial year, and two buildings where the tenant didn't renew, and we've managed to relet them in the year.
What was obviously extremely pleasing to us was the fact that the reversion that we were expecting in the renewal program with the existing tenants ended up being significantly less. I mean, hats off to the asset management team that did a great job in those negotiations, and we only saw a 9% down on that. Again, tying into the strategic sales that we spoke about, you can see that we've been talking about a flight path to trying to get as close to 35% as possible with the ability to fluctuate between 35% and 40%. But as you can see, the balance sheet obviously in really good shape, down to 36% loan to value.
I think to be taken into great consideration, ICR of 2.3, which as a consequence of all the Shoprite developments that will start rendering income now for the next 20 years, we should see that ICR number get significantly better. Warren will talk to that in a bit more detail later in the presentation. The final element, obviously, which is hats off, is to Laila and the finance team, obviously, we've managed to reduce the cost of debt. You know, what's amazing about the organization is that the symbiosis between one thing happening and the consequence affecting a different part of the organization. I think this is a classic example of that.
We have an underlying incredible portfolio, which is fully let to blue chip tenants yielding us great returns. The consequence of that is the debt capital markets obviously have seen that, and we've seen the debt margin obviously come off significantly. I think putting us in a position of great envy to the rest of the market in terms of where we sit there. In the U.K., obviously, nothing has changed. Everything was fully hedged and obviously, we've added nothing to the portfolio. That's remained exactly the same. Just to now go, obviously, I suppose the most important metric that everybody's sitting in, and I'm sure you probably already all turned to this page and have sort of seen that big number on the left.
Obviously, we're really pleased that DPS has shown a 2.1% growth at 133.92. Obviously, what it does show is that the portfolio has fully stabilized now and we are expecting some great things in the years to come. The rest of the presentation in various parts of it will talk to that. I think over the last two years, the rumor mill has been massive around Equites and this payout ratio. We continue to maintain a 100% payout ratio, and as we've said on numerous occasions, we will inform the market with massive lead time should that decision be changed by our board. As things stand at the moment, we are committed to that 100% payout ratio.
We know that for a lot of our shareholders, that is quite an important metric. Again, the loan-to-value at 36%, obviously very pleasing, and we'll see how that plays out later in the presentation where that is obviously linked not only to the sales program, but also to some of the revaluations that we've managed to achieve through the portfolio. Then the final element, which is also pleasing, at ZAR 1,649, the NAV per share, and this is notwithstanding the fact that we took a significant write down in the EGL transaction.
The expectation is as we trade out of the rest of the E+GL platform, over the next 18 months, the expectation is that some of that write-down will probably get written back up if we are successful in executing on some of the things that we have in our pipeline at the moment in terms of that disposal. Over and above that, obviously, from financial year 2024 to 2025, the rand also sort of performed significantly better. That exchange rate number obviously also had a bearing. The final element that had a bearing on that obviously would have been the DRIP program that we undertook during the course of last year, which would have been slightly diluted to NAV as well. All in all, really, really pleased with that number.
Vacancy remains in South Africa at 0%. In the U.K., we've got a very small unit adjacent to the DHL in Reading, which is vacant. Obviously, sort of, it is a vacancy, so it needs to be reflected and it's there. It was let on a short-term basis last year. Unfortunately, that tenant has vacated the premises. Property portfolio, obviously like-for-like growth in the portfolio in S.A. was really good at 6%, and in the U.K., the portfolio was more or less flat. Slightly up in pounds, but obviously that offset by the rand appreciation in the period. Notwithstanding that, really pleased, notwithstanding the sales program as well, that the portfolio is still a robust ZAR 27.7 billion.
We've already talked about the developments and after a financial year of ZAR 3.7 billion of developments to follow that up with ZAR 3.2 billion, I can assure you that it won't be that kind of number in financial year 2026. But notwithstanding that, it will still be a significant number. Very pleasing here that the WALE has risen again. The one thing about WALE, obviously, is that every year that goes by, it automatically does come down. The one thing that none of us can stop is time. We'll see that the development program what it gave us and the consequence of which it fed through into the whole portfolio and obviously increased from 12.6 to 14 years.
The final element obviously is our solar number. It's an important metric for us, especially in a world where we do have quite a lot of sun in South Africa and where we can harness it and provide our tenants with a mitigation when it comes to energy in the building. Notwithstanding that, we can also sometimes provide them obviously with certain costing efficiencies as well as a consequence. What's pleasing is that we've increased the number of buildings with PV on the roof from 29 to 37. We currently have, stand to be corrected, I think 62 buildings in the portfolio. We continue to march towards that process of one day having all our buildings with solar on them.
The other important metric on solar is that I think in financial year 2026, we'll start seeing solar actually making a meaningful contribution to DPS as well, and that hopefully will grow proportionally over time. Operating markets. S.A., you know, continues to surprise in the positive. The logistics sector at very low vacancy levels of 2.1%. Obviously, Equites in South Africa is 100% let. We are of the opinion, though, at the top end of the market, which is the market in which we generally operate, that vacancy factor is probably somewhere in and around maybe below 1%, which obviously bodes very well for the sector. The sector obviously remains the most favored sector within the property spectrum.
I think not just in South Africa, I think globally, and that can be seen in the yields being achieved for these properties. Riaan, you know, will talk to some of the yields that have been achieved in our sales program, which are industry leading, but I think reflective of the sector and the quality of buildings that Equites is sort of involved in. Rental growth still very much there. There's a combination obviously of scarcity of product, scarcity of new land coming on board, and coupled with that also, we do have some construction cost inflation that has come through in the last sort of 18-24 months.
While it's not crazy inflation numbers, within the construction industry, nonetheless, it is there and needs to be taken into account. As we know, developers in South Africa would need to make a return on their investment to warrant taking a scheme forward. What we're seeing is over the last sort of four or five years we've seen rentals grow by approximately 23% to what we would call the pre-pandemic levels. Most of what Equites has done in the last 24 months has been pre-let. I think the market generally is also very much in pre-let mode.
What that has done is it's reduced the amount of speculative developments that are coming online and, as a consequence of that, supply side being obviously dented, has resulted in demand side still being there and that demand side obviously then supports that rental growth story. In terms of the operating market, I think this is actually a very powerful slide. I think, you know, supply chain very much at the essence of what Equites is about. We provide a real estate solution to operators in the world that need to get goods to the end consumer. We are just one cog in that, but a very important cog because bottlenecks happen as a consequence of poor real estate.
You can't mitigate against poor real estate in supply chain, and we see this illustratively extremely well in this graph here, where you'll see the consequence of TFG taking up the Riverfields space up in Gauteng has seen their replenished lead time to get stock from DC to store from 4.6 days to 2.6 days, which is a massive 43% saving in time. Now, ultimately, those two days could be two days where you could have a whole host of customers that walk in and the stock is not on the shelf, and the consequence of which there's a sale that's been lost out.
Obviously, that directly translates into the next side of the slide, which obviously makes the availability go up from 84.9% - 91%, which is an 8% increase. The number 8% seems small, but it you know, when you're approaching the 100%, you know, every little increase incrementally is absolutely massive. When you're talking about an organization like TFG that's got in excess of 3,000 stores across the country, you can imagine what the multiplier effect is on that. E-commerce remains extremely important in S.A. and continues to grow. The estimate for this calendar year is that you know, the growth from ZAR 150 billion to ZAR 225 billion.
Ultimately, I speak for myself here, if I go online and I wanna buy something, if it's unavailable, it's very, very frustrating. If I put in my order and it tells me it'll only deliver in a week, it's very frustrating. What you'll find is that the online pages that can afford, you know, speedy delivery and consequential availability will see the greatest growth. We're seeing that across the board that these various organizations are becoming better and better at it. They're learning. Every year they're learning from, I say, past mistakes, but also from past successes and wins and building on those. Coupled with that, we've got a country that sees urbanization continue to happen.
As a consequence, you know, urbanization obviously is e-commerce's best friend and getting stock to the rural areas remains, I suppose, the biggest challenge to e-commerce. The urban model obviously works extremely well. It allows obviously time to delivery to be reduced greatly. Now ultimately, in order for all of this to tie in, one needs land. If you don't have land, you can't build the building and ultimately having available land in key nodes, which is serviced, i.e., it's got electricity and water and sewage available to it, is becoming a challenge in South Africa.
There's no question that the infrastructure backlogs at municipal level across the board, and availability of land which can be rezoned and the processes of rezoning are becoming more and more complex as years go by, and that is a consequence that is impacting the total availability, and hence land becoming that much more valuable. I think more importantly, it's putting pressure on land pricing as well, which ultimately is gonna ultimately put pressure on rental growth as well. In the U.K., I just wanted to sort of spend a bit of time here and we'll talk in a bit more detail about what's going on in the U.K. later, in terms of the Equites portfolio and what our thinking is.
You can see that the take-up levels have sort of more or less stabilized to pre-COVID levels with 22.6 million take-up in the previous year. The expectation is that this year will probably be something very similar and demand actually normalizing. Annual increase in rental still a healthy 4.4%. However, we are expecting that to trend closer towards inflation over the next couple of years. I think what's keeping it there at the moment, obviously, is speculative building has certainly been reduced greatly in the U.K., and the consequence of which is that there's very little new stock coming to market unless it's pre-let. Where we've seen availability rates rise is very much in secondhand stock, which is being returned to market, rather than through new speculative developments.
I think what's fantastic about the U.K. market, which I think sets it apart from many markets in the world, is its deep liquidity. It's incredible that a market like the U.K. has got such massive pools of capital that are looking to be deployed. However, the U.K. market has got a history of being intrinsically linked to that U.K. 10-year gilt curve. Although we're seeing the base rate come off in recent months, we're not seeing that feed through into the longer-dated U.K. gilt. Ultimately, as soon as we start seeing that, I think we'll start seeing the prime yields sort of going into the fours.
At the moment, I would say they're probably sitting between 5%-5.25%, obviously depending on location, covenant, longevity of lease, and various other things. That really is where the U.K. sits at the moment. In terms of development, as you can see, another groundbreaking year for us. Great to have entered into a provision of a warehouse to the SPAR Group, and we hope it's the first of many to come.
You know, we've fostered a great relationship with the management team there, and the consequence of this particular facility has already seen significant improvements in the efficiency of the anchor stable within SPAR, which is really pleasing to see, because it really does help us sell the supply chain dream within the senior management team and the board at SPAR, which hopefully will lead to some great business going forward. We completed the upgrade to the Shoprite in Centurion, and obviously that is the nerve center of Shoprite's business up in the north. An absolutely vital facility to Shoprite's ongoing success.
Also great to see that Shoprite willing to spend sort of just shy of ZAR 200 million in upgrading that facility to ensure that it remains relevant within their portfolio for many years to come. In Gqeberha, we completed the Wells Estate facility. Absolutely fantastic facility. What it also does is it, for the first time, it actually opens up the Eastern Cape for the Shoprite Group, and we are expecting a pretty aggressive rollout of stores probably for the group in that region going forward as a consequence of this, as the lead times to getting stock into stores obviously greatly reduced and the availability of stock now obviously meeting Shoprite requirements in terms of where they are as an organization. Really pleased to be part of that.
Obviously very pleased to be investing in a region that certainly needs as much investment as possible. We look forward to potentially doing more deals in that region of South Africa. Watch this space, as they say. And how we're doing obviously, again, with the Shoprite team, we've done the Riverfields development. This particular one is not in our joint venture partnership. Equites owns 100% of it. It's obviously in a park together with the TFG facility adjacent to it. Obviously, a world-class park which will be a bedrock of Equites' portfolio for many years to come. During the year, we did three speculative developments. Two of them were let prior to PC and one shortly thereafter.
What's really pleasing is that the tenant that moved into the facility, one of the facilities, has given us indication that six months after sort of being in the facility, you know, they've already noticed about a 45% improvement in their efficiency targets in terms of their business. Which obviously is incredible. What it does is, again, it reinforces this story that if you can get supply chain right, and you get the correct real estate solution to provide that, it is a game changer for your business. And then I think the final part of this slide that I sort of wanna talk to, obviously, we've put 18 years there obviously in red, so you don't miss it.
Really, this talks to what Equites is about. It's about creating sustained long-term income for our shareholders, and this can be achieved by creating world-class facilities for world-class organizations on long-term leases. You can see that 18 years, over 220,000 sq m of GLA is absolutely incredible business for us and for the organization going forward. Super proud of that number, and what it means to us as an organization. I'm gonna hand over to Riaan now, and he's gonna take us through the highlights. I think highlights this year. It's been a fantastic year and well done to him and his team.
Thank you very much, Andrea. This year certainly operationally been the busiest year we've ever had with a lot of focus on asset management. As you can see from the slide, our property fundamentals remain impeccable, and it's probably the reason for our sustained and predictable income growth. At 14 years, a weighted average lease expiry profile gives us that certainty, and then 98% of our tenants are A grade tenants, so it means multinational listed companies, which shows the very low risk of our portfolio. We now have 1.6 million sq m under management. There'll be two separate slides on our like-for-like rental growth as well as our like-for-like valuation increase over the past year, both in the region of 6%, and we're very pleased about that.
At year-end, you'll see that there's ZAR 960 million of assets held for sale, comprising two specialized facilities and the remainder, some of the U.K. properties. Looking at the like-for-like growth of 6%, I think this was driven through the sustained rental growth that we've seen over the past three years. The main reason for this rental growth, which is very pleasing, is firstly, as Andrea indicated, there's a very low supply availability of A-grade logistics facilities. Secondly, tenants are more and more realizing the operational and financial benefits that can be derived from operating in an A-grade logistics facility in a secure park. You'll see on the right-hand side the rental growth at our Meadowview and Waterfall facilities were slightly lower.
That was as a result of these portfolios being acquired in 2015 and 2016 respectively, and over the course of 10-year leases with an average escalation of 7.5% and the underlying market rental growth of circa 5%, it can be expected that there would be a slight reversion. We had six leases that came to an end over the past financial year. Four of these leases were renewed at an average reversion of 9% at a total of 110 ZAR per sq m. In two facilities, the tenants vacated, and we replaced them with new tenants, where the renewal rental was a pleasing ZAR 101 per sq m. Looking at the like-for-like valuation growth, again, 6%, which is very pleasing.
This was influenced by our disposal program, where we achieved better than expected pricing and also the contractual rental renewals at rents which were superior to the market rentals that were used in the prior years for the valuation purposes. As you can see there on the right-hand side, we've also broken down the rental growth, the valuation growth in respect of the various parks we have and also the Western Cape. The Western Cape is booming property-wise, as you will know. We've seen good demand for our facilities, and it bodes well going forward. A key time for us is when leases come to an end.
We see our tenants at least twice a year, and during these engagements, we familiarize ourselves with their business, whether the facility is suitable for their needs, whether there's an opportunity at lease renewal to enhance, improve the facility, and also, it's a time to talk about ESG in exchange for a renewal. I have mentioned that we've renewed the four leases and we replaced the other two tenants in the facilities. On the right-hand side, you can see the four renewals with existing facilities and also the details on the rate per square meter, which averages at ZAR 110 a sq m. Now, a couple of years ago, if we had talked about ZAR 110 a sq m, it would not be credible. We've just seen over the past three years that rental...
Rentals have grown significantly, and we expect the growth to be sustainable also because we see very little speculative activity in the market and our speculative program has been very successful as a result, so we can expect this growth to sustain. Andrea referred to our disposal program. As we've mentioned in the past, we apply strict criteria when it comes to identifying properties for disposal, and we've listed them there. Obviously, a disposal program is also an opportunity to strengthen the fundamentals of our portfolio by selling the slightly older ones and making sure that ultimately our aim is to have a portfolio that is green in all senses and has all the bells and whistles of proper ESG compliant facilities. You will note there that we-
Since FY 2023, our disposal program has been implemented to sell ZAR 6.8 billion of properties, of which ZAR 2.4 billion was concluded and transferred in the current year. Four of the disposals were done through Statement 102 transactions. Those are BEE transactions, and we're very pleased also to play our role in the transformation process of our country. On the right-hand side, you will see the individual disposals, and those are the contracts that we signed during this financial year, amounting to ZAR 1.4 billion in South Africa at a value uplift of 1%. We've also received significant offers in respect of other assets in our portfolio at yields superior to our valuations, but ultimately our business is retaining and building our portfolio.
We will make use of these strategic opportunities if it's opportune and at the right time. In the U.K., you'll see the one disposal, Amazon Peterborough, was done slightly below book, at GBP 38.5 million. That's all from my side. I think it's over to Laila now.
Thank you. Thank you, Riaan.
Okay, they say that good news is easy to tell. I hope that this will be an easier story to tell. I think let's start with, as Andrea said, the metric that's most important to a lot of investors, and that's our distribution per share. For FY 2025, our distribution per share is ZAR 1.3392 per share at the upper end of our guidance, which reflects a 2.1% growth over FY 2024. The NAV per share is ZAR 1,649, down from FY 2024. The major driver for the decrease in NAV is the EGL transaction, as well as some FX movements, which we'll talk about in a little bit more detail in the upcoming slides.
The LTV, I'm gonna pause here for a moment because in FY 2023, I remember sitting here and saying, we're reporting an LTV of 39.7%, and we've got a flight path to reduce this LTV over time. In FY 2024, we spent ZAR 3.7 billion on acquisitions and developments, and when we reported our FY 2024 results, our LTV was 39.6%. In FY 2025, we spent ZAR 1.5 billion on actual CapEx and development spend. Due to the successful disposal program as well as some valuation uplifts, we've managed to reduce this LTV to 36%, which is really where we're very comfortable with this LTV.
I think it encapsulates a lot of what both Andrea and Riaan have spoken to about how we've been very focused and disciplined in our disposal program and using those proceeds to reduce our LTV. Importantly, we also have ZAR 2.9 billion in cash and undrawn facilities, and Warren will take you through a little bit of our strategy around why we have these undrawn facilities. Then lastly, this is not a material number yet, but we did communicate a strategy whereby we'd focus on alternative sources of revenue. For the first time, we actually have revenue from solar projects and from PPAs which we've signed, which is included in the revenue for FY 2025. Now, this number is less than ZAR 10 million, but we do expect it to be a growing number going forward. Okay.
If we move on to the next slide and we talk about our financial position, I think the first point is really important, 6% increase in valuations of the S,A. Income producing portfolio. Now, what gave rise to this 6% increase? I think the first thing is that with the disposal program, we really managed to recycle out of older non-core, non-ESG compliant assets and deploy the money into brand new long-dated ESG compliant products. This helps us from a valuation perspective. For example, the Shoprite assets, it's a very easy discussion. They're on 20-year leases, and you know that you're almost guaranteed uplifts every year. Secondly, what really helped our valuations this year was market rental evidence.
Now, Riaan spoke to signing new leases at ZAR 101 or ZAR 110, and that really underpins the market rental evidence, which helps to support the valuation growth year-on-year. I think that where this all comes together and you can finally see it is that overall increase of 6% in the S.A. portfolio. Now, the U.K. assets remain stable. Andrea spoke to how there's been a dislocation between the base rate and gilts. Even though the base rate has decreased by 75 basis points over FY 2025, we haven't seen the commensurate increase in gilts, and therefore the U.K. valuations have been reasonably stable.
Now, underlying our entire balance sheet is really the investment property, and if you look at it year-on-year, the investment property has decreased by ZAR 730 million. Despite the ZAR 1.5 billion which we've spent and the valuation uplifts in the portfolio, this was offset by the ZAR 2.4 billion worth of disposals and FX movements over the period. Now, I just wanna go back because I said that there's a 6% increase in the S.A. portfolio, but you're only seeing valuation uplifts of ZAR 140 million. If you look at our detailed investment property note, you'll see that a lot of the write-off related to the EGL transaction actually goes to that fair value uplift line, and that detracted from the S.A. valuations, which we did see. Okay. Held for sale.
In line with our disposal program, which was still underway and we were still in the middle of it, I would say at FY 2024, there was a ZAR 2.1 billion or ZAR 2.2 billion held for sale balance at FY 2024. We disposed of ZAR 1.4 billion of S.A. assets, ZAR 1 billion of U.K. assets, and at year-end, FY 2025, we only have a balance of ZAR 960 million. The majority of this relates to the U.K., two income producing properties in the U.K., some land in the U.K. and then two S.A. properties, one which actually transferred yesterday. That sort of makes up the balance, and I think for the most part, as Riaan said, this sort of sees the conclusion of the S.A. disposal program.
There was a massive increase in cash year-on-year. This was driven by the disposal program. At year-end there were a number of disposals which happened almost in the last week of the financial year, and this increased the cash on balance sheet at year-end. The disposals, as we spoke about, resulted in an 11.2% decrease in net borrowings. The cash received from the disposals were used to repay debt facilities as far as possible, or to invest in money market type products. As required for developments, we will draw down on these facilities. Okay, now the distribution statement. We saw net property related income grow by 6%. This is supported predominantly by the like-for-like rental growth in the portfolio of 5.9% as well as rent reviews in the U.K.
We had DHL, Reading, DPD, Burgess Hill and Puma, which all experienced rent reviews during the period. I'll touch on these a little bit more in the bridge. The net property related income was slightly offset by brief vacancies during the period. There was a brief vacancy at the Parow spec facility, which is now let, as well as the Meadowview spec facility, which is also let. Increased net overheads are driven by a few items. There was a large increase in U.K. admin and legal costs as we were gearing up for the disposal of the EGL platform. The level of development activity had decreased massively. As I said, we spent ZAR 3.7 billion in the prior year.
We spent ZAR 1.5 billion in the current year, and therefore the capitalization percentage has decreased year on year. If you look at the capitalized percentage or capitalization percentage of overheads, it was 28% in the prior year. It's 23% now. We expect this to be a more normalized level in line with the level of development activities. What's also important is that Andrea will talk to the disposal of or the potential disposal of the U.K. platform but included in net admin costs is ZAR 32 million relating to the U.K. income producing portfolio, which we haven't added back for the purposes of distributable income, so it's included in that number. Where we expect admin costs to stabilize is probably around ZAR 100 million per annum. Included in the distribution statement is an antecedent dividend.
This relates to the impact of the two dividend reinvestment programs. We raised about ZAR 700 million over the year in two really well subscribed dividend reinvestment programs, and that gave rise to this antecedent dividend. Over the period, there was a reduction in the cost of debt, which enabled us to replace maturing debt with lower costing facilities, which Warren will talk about. We're incredibly proud of our success in the DMTN market. This was slightly offset by a reduction in borrowing costs capitalized. Now, I just want to pause here for a moment because we get a lot of questions about this. In the prior year, we capitalized ZAR 444 million to developments. In the current year, we capitalized ZAR 331 million, or ZAR 333 million, sorry, to developments. I want to break that down even further.
When I look at that number, I think the part that gets questioned the most is really the land. I'm going to start off by first saying that included in this number was still all the EGL sites for the period until the transfer happened. There was some of that included in this number. If we want to talk more detail, ZAR 77 million of that total number relates to trading property, of which ZAR 57 million relates to Basingstoke. We expect that that will be. The balance that doesn't relate to Basingstoke is now out of the system. The Basingstoke balance, Andrea will give some color to when he discusses our strategy in the U.K., but again, we expect this to probably be disposed of in the next 18-24 months.
The ZAR 80 million of the capitalized interest balance relates to land, of which half relates to U.K. land. This is part of the EGL transaction, and we expect this to reduce in FY 2026. The remainder relates to South African land parcels. Included in all our South African land parcels are two land parcels which we're no longer capitalizing interest on. We've always communicated that we are very prudent in our capitalization approach on land. Where there are no current development activities, we cease capitalization on those land parcels. The remainder and the majority relates to S.A. developments, and as we've always said, this will be a part of our ongoing business, and we always expect to have capitalized interest relating to developments which rolls off and becomes income generating. The increase in or the net, the non-controlling interest.
As you know, we have a massive non-controlling interest relating to RLF. If you look at it at the face of it appears as though the number hasn't increased much even though we've brought online all of these developments. I think what's important to note is that we all know that these developments are dilutive in year one, so the finance cost, if it's funded 100% through debt, is going to exceed the cost of rent, and that's why we haven't seen a massive increase in the NCI relating to RLF despite more developments coming online. Okay, so our DPS bridge. Again, I think I've spoken through the majority of these items. Just to pause, like-for-like rental growth in S.A. of 5.9% contributed the majority of the DPS growth, so ZAR 0.049 to DPS growth.
In the U.K. we had those rent reviews which we spoke about, which contributed ZAR 0.025 to DPS growth. The positive rent reviews, Andrea usually talks about this, but DPD Burgess Hill 69%, DHL Reading 28%, and Puma 42%. I think overwhelmingly positive. In the upcoming year, we do have DHL Reading, which is expecting a rent review, and then the only remaining asset in the income producing portfolio will be Evri, which is still subject to a rent review. Okay. If you just look at some of the detractors, as I said, there was periods of brief vacancy during the period relating to speculative developments at Meadowview and Parow, which detracted from DPS. There was some dilution from the Shoprite developments which came online in the back end of this year.
The net overheads, which I've spoken about now, was also a detractor to DPS. There was some tax consequences, a very small amount. If you recall in the prior year, we did have some tax leakage, so not having that improved DPS. Newport Pagnell had a significant financing component. As we discussed last year, we concluded successful agreements with Panattoni to deliver the scheme. Because the consideration or the final check is only expected in November this year, there was a significant financing component which increased DPS. In November, we expect to receive the final check, and that will be invested or used to repay debt, which will then offset the financing component included in this transaction. Tightening in debt margins or credit spreads contributed ZAR 03.1 to DPS.
Lastly, the DRIP had a dilutory impact of ZAR 0.011. Okay. Lastly, just the NAV bridge. Again, I'm not gonna touch on every element here, but just the S.A. portfolio and the valuation increase we saw there was the largest contributor to the increase in NAV per share. We had several detractors from NAV per share, and I'm gonna lump a few of them together. If we talk about the E+GL transaction, we wrote off all capitalized costs relating to those sites which were actually disposed of, what we call the initial sale companies. That resulted in a write-down in that E+GL segment.
We also, in the developments or the developer segment, there were certain sites relating to that E+GL transaction, which we also wrote off all the capitalized costs. We either disposed of them, or we expect to dispose of them by June 30, 2025. Then lastly, just the remainder of the E+GL transaction really relates to the deferred consideration, which we expect to receive as a result of profits or Newlands making profits on the remainder of the sites. Included in, on the balance sheet when you really look at it, we have taken everything down to cost or net realizable value. All the remaining land options are carried at cost or net realizable value, i.e., the value we expect to receive for it.
If there is any upside on any of these transactions, that'll all be upside to the balance sheet, which will come in subsequent years. We really have incorporated the full impact in the NAV in the current year, in FY 2025. I think, you know, the FX, we really are at mercy to the currency. The rand did really well at FY 2025, and I'm smiling because it did really poorly after that. We capture it at a point in time, and the improvement in the exchange rate actually had a detraction from NAV of ZAR 0.24. The DRIP again was dilutionary because we issued these shares at a discount to NAV, and that takes us to our ZAR 16.49. I think that's it for me.
We had a remarkable year from a treasury perspective, and I'm gonna hand over to Warren to take you through some of those highlights.
Thank you, Laila. We've heard from my three colleagues around this certainty that who we are as a business, what we do, and our results. We run treasury and risk management with the same focus and approach, and that's to provide that certainty year on year. This is no more clearly evident than in the debt capital markets, and I'll come to an analysis of that. First, let's have a look at LTV, and, my colleagues have spoken through a number of the items here, but to touch on the three main points there, the disposals that we undertook in both South Africa and the U.K., cumulatively ZAR 2.4 billion, that reduced LTV by almost five percentage points. The developments that we undertook in South Africa, of which roughly half were for Shoprite, that increased the LTV by 3.8%.
Lastly, the DRIPs that we offered in June and November last year, that was taken up by almost 2/3 of our shareholders. That provided us with ZAR 700 million of equity, and that reduced our LTV ratio by almost 2.5%. That brought us to the 36.0% exactly at the end of February 2025. That creates headroom on both sides for us, which is a great position to be in as a business from a balance sheet perspective. We've heard a lot of talk about the cost of debt, and I'm gonna show a very interesting slide here on the right-hand side. It may be a little confusing at first, so I'm gonna break it down for you.
Those bars that you see are the volume or the quantity of debt in each of the last three reporting periods. That's from August 2023 all the way through to February 2025. There's writing at the bottom of each of those bars, and that refers to the duration of that debt that either matured or was refinanced. For example, on the left-hand side, the second half of 2024, you will see that there was 2.7 years being the duration of the debt that matured. What was then refinanced during that same period was 3.5 years. You can see for those three reporting periods, we extended the duration of the debt for each of those periods. Notwithstanding that, we managed to reduce the cost of our debt or the spread above three-month JIBAR by approximately 30 basis points.
For example, on the far right-hand side, the most recent of those reporting periods, we reduced the cost of debt from 156 basis points above three-month JIBAR all the way down to 128 basis points. This just gives an alternative view of the cost of debt. On the left-hand side, over the last four years, how that cost of debt has reduced from August 2023 down to where we are now in February 2025. Notwithstanding the fact that the reference rates, three-month JIBAR and SONIA in the U.K. have come down, I do draw your attention to the fact that we are 83% hedged, and I'll touch on that in a bit more detail later. On the right-hand slide, we've spoken about how well we have done in the debt capital markets.
That graph shows the last five years since we launched our DMTN program in February 2020, all the way through to where we currently are. On the far right-hand side of that right-hand graph reflects our auction in November last year, where we raised three-year funding at a spread of 110 basis points and five-year funding at a spread of 125 basis points. Now, these levels are the lowest in our sector. We also raised one-year funding at 92.5 basis points through a private placement also in November last year. Right. Some of the key aspects are on this slide. I'm not gonna go through all of them. Laila did mention the ZAR 2.9 billion that we have in cash and undrawn facilities.
This is a key fundamental of the focus and risk management we take to treasury. That liquidity that we have in our business allows us to ride out market dislocation periods. For example, in June last year, we had the national elections. That liquidity that we have allowed us to postpone that auction for a month until there was more certainty in the market, and then that auction that we had in July last year was very successful. Our interest coverage ratio, as we've said, has increased to 2.3 x, so that's revenue over cost of debt. That's a factor of both the developments coming online and increasing our revenue, as well as the cost of debt decreasing. As Andrea said, we foresee that increasing significantly in the future.
Our weighted average debt maturity three years ago in February 2022 was 2.7 years, and that has sustainably increased over the last three years to where we are now at 3.8 years. Our property assets that are not encumbered, so that's where we haven't provided them as security to bilateral lenders. Those unsecured properties comprise about 60%-62% of our total assets, and that gives our unsecured investors, so typically those 26 non-bank financial institutions that participate in our debt auctions, that comfort that there is significant headroom in terms of security of assets. Lastly, in terms of those secured ratios, our balance between secured and unsecured debt is half/half or 50% each way, and we like to keep it around that level.
I did speak earlier about the amount of debt that is hedged, so 83.4%. Just to illuminate that a little bit, that refers specifically to debt that is over one year in maturity, so about ZAR 8 billion of our debt, ZAR 8 billion of ZAR 9.5 billion of our debt and ZAR 8 billion of interest rate hedges that have more than one year to maturity. That, again, gives certainty to our business. All of this, as I've said at the beginning, provides certainty from a financial risk management perspective, and that feeds into the certainty and stability of the business. Without that, or with that, as investors, it provides you with the certainty to invest in our business. I'm gonna hand over to Andrea.
Awesome. Thank you, Warren. In sort of coming up, concluding and winding up the presentation, obviously, the sustainability and transformation remain a very integral and important part of the Equites way. You'll see our solar capacity in the period has grown significantly from 20.2 MW to 26.7 MW. I think what this talks to, it talks to the fact that we continue to invest in this capacity, but for two reasons. Obviously, the sustainability issues remain important, but as we all know, the availability issues within the South African marketplace remain a concern for our tenants, and having this as an opportunity for our clients is extremely important.
We obviously achieved the first IFC EDGE net zero carbon building, and we have two further that are currently in determination and hopefully we'll be able to announce those during the course of next year when we present these results. Within the portfolio, obviously the portfolio has got about 703,000 sq m of it effectively certified with another 243 coming online, which is approximately 60% of our portfolio being green certified. I think the wheeling project is another project which obviously we're extremely proud of, that we were included in the process by the City of Cape Town. We provided the green energy to the building. We actually are tenants in here in the town center.
We hope to be able to grow this part of our business substantially over the coming years. We have the potential of about 730,000 sq m of roof space available to us, which is pointing in the right direction towards the sun, which hopefully we will be able to exploit in due course. The final element, which is one maybe that doesn't really yet achieve as much attention as the solar stuff is the water stuff. As you know, especially our Gauteng clients have had significant water issues in the last 12-24 months. We foresee these issues to potentially get slightly worse over the coming periods. As a consequence, we are looking at integrated biological wastewater treatment plants. What will that do?
That will afford us the opportunity to be able to use treated water for everything that is non-potable. Now, that accounts for within our facilities, normally approximately 75% of the water consumption in a facility, thereby greatly reducing the quantity of water that will be used or potable water that will be used by our clients, thereby increasing the available water to the rest of the communities in which we reside in. I think around sustainability, obviously, you know, it remains a politically fairly highly charged issue. As we can see with current, let's say, political leanings in the world, it seems to be aiming in a direction which is less important.
I think this may change several times over the next decade, in terms of, as things do play out and we will have some pro and some against. Ultimately, I think from an Equites point of view, we're committed to what we're doing, because we feel it also enhances the product that we afford, our clients within the context of operating in a South African environment. I think we need to take that into consideration. We need plan B available to our clients. It is a double-edged sword for a lot of things. We feel it's the right thing to do, but it's also a necessary thing to do within the context of a South African marketplace.
In terms of social transformation, obviously really pleased that we've managed to achieve level two, a very high level of black ownership. I think Rian spoke to the Statement 102 transactions. We've done a few more this year, but in total, in our history, we've done seven. I think this really talks to us really trying to, where possible, without obviously eroding shareholder value, bring in black entrepreneurs into the process of property ownership and also the transmission of that skill in terms of property management, asset management, and relationship building with financial institutions to enhance return metrics for and the success ratios for these new entrants into the marketplace. Very important part, what Equites does, a commitment to education in the country.
We're very committed to this process and have had several successes with interns in the employment of the company, but also by giving internships to people that have gone on and are working for world-class organizations all over the globe at the moment. Really proud of that. I think great initiative was created by two members of staff that came through our internship program and felt that whilst they were at university, they learned a lot about property, but they had no idea what a REIT actually encapsulated. We've created this one-week intensive course, one in Cape Town, one in Joburg. We normally have between eight and ten students.
What they do is they get exposure to every aspect of the business. From treasury to developments, to property management, to billings, to new business, the whole work. They get a real good insight into what being a REIT is all about. We've also had 44 students that have gone through this participation of our working programs in the system. The final part of it within the education system, obviously, which is great, we've effectively sponsored an award at UCT in excellence in the built environment. We had our first recipient of that award, a lady, a young lady by the name of Baraka Ntimba, who has done exceptionally well over her third year.
As a consequence, she is actually gonna be joining us in a couple of weeks in the Cape Town one-week intensive course program. But also more importantly, she's doing her honors at the moment and obviously flying there, and she has the freedom of thought of knowing that her finances for that final year of studies are completely taken care of, which is fantastic. You know, we hope to be the sponsor of many incredible minds coming through the built environment programs at UCT over the years, which will make a meaningful difference to our industry for the future. The final part is the RICS program. We currently have two members of staff that are basically going through that program.
It's a three-year program, and the consequence of which is at the end of it, you'll be a fully qualified chartered surveyor with a MRICS certification. Obviously, kudos to the first two guinea pigs that are going through the system at the moment. Obviously, it's a learning curve for us as well in terms of what we need to provide them to ensure that they get the necessary accreditations from the industry body. Looking ahead. I think this slide here is quite an important one.
I think, you know, I think we've shared, and a lot of people have probably been privy to an article that was in the press towards the back end of April, with Equites' intention to potentially look at the selling of what we define internally as our Aviva portfolio. It comprises five income producing assets, and it's being marketed by a leading U.K. agent. We will have two properties in terms of stabilized properties left in the portfolio. The intention is probably going into first quarter 2026, and we talk about first quarter 2026, not in financial year 2026, but rather in calendar year 2026. We don't think we're in any rush to sell any of the properties because we feel that the market is actually coming towards us.
More importantly, though, the five income producing assets will go through a process, and we should be receiving some bids in the not too distant future, following which we will follow a process of streaming that down to probably a shortlist of two to three very meaningful and serious bidders, and then hopefully being in a process that we can take an offer to our investment committee and board for approval. We remain massively confident that we will probably perform better than book on this, and the expectation is to be probably there. That notwithstanding, you know, our book being a big number, we hope to improve on it.
Over and above that, we've got Basingstoke, which got a planning approval towards the back end of last year, and we are basically awaiting the signature of the Section 106, which will then lead us into judicial review. We're confident that the discord that may have been around in the air with our neighbors in the greater Basingstoke area has certainly calmed down post the successful planning. We hope to work very meaningfully with the local communities to ensure that as the development becomes viable, and the development actually starts, that we create as little disruption to the neighbors as we possibly can, which obviously is always an important consideration in these things.
Coton Park, which is one of the properties that was in the joint venture, has now been signed with JD.com, a leading e-commerce retailer, but it's not for their direct use. They do have a property arm within their organization, and this is basically gonna be going onto site from the beginning of June with a delivery date probably towards the back end of 2026. Expectation is somewhere in November 2026. The consequence of which, again, this talks to what Laila spoke about earlier, that although we've written down certain aspects of the Newlands joint venture, in this instance, we will be able to write up a small bit of profit back to balance sheet as and when this gets concluded.
We have the three organized companies that we call the subsequent sale companies, and we are expecting to receive our GBP 1.5 million at the end of June 2025, and that is all on target and planned, and that won't change. We further have Thrapston, which is a 2 million sq ft scheme, which is going to a planning determination in September 2025, and should that be successful, we are expecting that the drawdown on that particular piece of land will probably happen between April and May next year. The consequence of that is there will be a further GBP 3.5 million effectively being paid to Equites as part of that process. Then the final part is the practical completion on Newport Pagnell.
I mean, Laila spoke to the Panattoni deal. Building one is complete. Building two is fast approaching completion. The final element of the practical completion will be the road infrastructure, which will be enhanced all around the facility, which will be the final cog of the wheel, which should be completed effectively in November 2025. Everything is on target for that, and the consequence of which is we will receive our final cheque there. In summary, if we were to take all of this into consideration, I think it would be realistic for Equites to expect us to be probably out of the U.K., in all its facets by the end of calendar year 2026.
The process, especially out of the Newlands transaction, but not just the Newlands, also in the stabilized asset transaction, is that our balance sheet is in a very strong position at the moment, and we will undertake the sales and the necessary deals in a way that obviously maximizes Equites value and this is very important to us. We do believe that we are in the beginning phases of a new run in the U.K., and we hope to benefit from that with significant new capital being made available to execute in this market. Again, this talks to the deep levels of capital available in the U.K. This takes us to S.A.
The consequence of what will happen probably in the U.K. in the next 18 months will result in a significant repatriation of funds. We continue to participate in numerous RFPs within S.A. Notwithstanding that, the quantum of money coming back obviously will necessitate an elevated level of deployment. As a consequence, we are potentially going to start looking at the unlock of value in more multi-let parks in S.A. This will be done on a basis that we will probably be obligated to reduce the spec within these parks. That will allow us to probably achieve slightly higher yields. The parks obviously will become significantly more property management intensive. Ultimately, what they will do is that they will also benefit from increases in short-term rentals.
We'll start feeling the effect of those in these parks in the short term rather than in the long term, which is what we're seeing with our stabilized South African portfolio. We see this as a dislocation which potentially will enhance DPS in the short and medium term and obviously can be carried by the deep weight of the WALE and the underpin of the Shoprite portfolio within the business. We continue to see supply chain optimization. We get called into many meetings and have significant conversations with more and more operators. This is both in the FMCG market, in the retail market, and also in the e-commerce market. Ultimately, it is becoming more and more apparent that investing in this is becoming more and more important. We're seeing it with the leading retailers having invested significantly in this.
In our example, obviously, you know, Shoprite and SPAR and TFG being significant components to our development platform over the last couple of years. What is that doing, though? It's putting pressure, though, on their suppliers. What we're seeing is that, you know, it's all fine and well that you build an optimal facility to distribute into the final consumer. If your supplier is not optimizing their supply chain, it also will create a dislocation which needs to be tapped. We are seeing massive opportunity in that segment of the market where a lot of these suppliers will need to upgrade their facilities, which they probably haven't looked at for the last 10 to 15 years in order for them to meet the requirements of their clients. I think our final slide and really talking to the strategic focus of the organization.
We remain obviously committed and see ourselves as a leader and innovator in the large distribution and e-commerce facility. The IP that we have internally and that we've built up with our professional teams and the contractors that continue to support us and provide us with fantastic pricing, but also, you know, immaculate building practices, which certainly have a massive impact on maintenance over time. Something built poorly up-front leaves legacy problems forever. Something built well and thought out up- front, you know, really does mitigate maintenance. Whilst, you know, a lot of shareholders may say, yeah, but why do you care? You know, maintenance is something you pass on to your tenant. That is a very factual statement. Notwithstanding that, it still remains a grudge thing.
In order for us to maintain really positive engagements with our tenants and get repeat business from our tenants, you know, having a lot of thought process in that is absolutely critical to creating positive forward-looking relationships. Logistics parks effectively are there also to counter security issues, which in some instances are becoming bigger. The consequence of that, it's just one added component which allows clients to house their employees in safe nodes. Especially the international companies place massive influence on that decision-making process. Obviously, that is a key component of what we do. The intention of the organization, and, you know, we've spoken about the flight path to get the balance sheet right. We've spoken about the disposable program. We've spoken about the asset management in terms of increasing rentals and getting sustainable rental growth.
Ultimately, it all feeds into one thing, and that is to generate sustainable distribution growth. What Equites' intention is to create a portfolio that can afford its shareholder a real safe pair of hands that we are able to give above CPI distribution growth to shareholders for many, many, many years to come. Really this talks into the final element there, which is that, you know, DPS guidance for the year is 5%-7%. We are obviously really pleased that we are going to be entering a new phase of growth again within our portfolio and our business. Then the final part of that, obviously, which goes with that is the 100% payout ratio. As I said early doors, there has been a massive rumor mill over the last couple of years in terms of us paying out 100%. We are committed to doing that.
The nature of our portfolio allows us to do that. We will continue to do that for the foreseeable future. In conclusion, you know, I would like to take this opportunity to thank our board, my co-executives, my senior management team, and the rest of the Equites team. I mean, maybe a big call-out also to the senior management team that have really had to step up to the plate in the last two years, and I think have done so admirably. The last two years have not been the easiest years in Equites' life. Obviously, after eight years post-listing of massive growth, the last two years have forced us to look inwardly and refocus on our business. I think we've done incredible work over the last two years.
I think we've positioned the organization that notwithstanding the external shocks that can come from time to time, of which we have no control, that this business has basically been built to sustain a commensurate risk/reward return for shareholders going forward. I'm very proud of the entire Equites team and Equites family, and the organization that we've built up over the last 11 years. I think the next 11 years will certainly be significantly more successful than the last 11. On that note, I'd like to thank you all for having listened in. I think we're gonna go over to a bit of Q&A. I think there's quite a few questions there, Laila. I hope we have time for them all.
Yeah.
If we don't have time to answer them all, those of you that have answered, we will get back to you online.
Mm.
I'll defer to you.
Okay. Thank you. I think to start, I've lumped together a few questions. There's a lot of questions around Basingstoke. People want to know Basingstoke planning permission, and then also what we expect to do with Basingstoke, whether it's too early to share, and then a question on just where do we find Basingstoke on the balance sheet. I'm just gonna start with that. Basingstoke is included as trading property on the balance sheet. Also, there was a question around how much interest is capitalized, which I think I did answer already, ZAR 57 million relating to Basingstoke. Andrea, do you maybe just wanna take away.
Yeah
Yeah.
I mean, on Basingstoke, I think the key metric is that there is value in the spade-ready land. Notwithstanding the fact that we do have planning approval, which was the first major hurdle, we are still not spade ready on the piece of land. That being said, you know, we talked about the 10-year gilt and the reduced amount of speculative development that's happened in the U.K. in recent years. I think that pent-up demand potentially is growing and sort of leading into the rest of this year and into next year. I think the quantum of people that would be available to make an acquisition of a site like Basingstoke from Equites, Newlands' joint venture, would be significantly more.
That being said, we do want to take the site and get it spade ready. What does that mean? We need to get the 106 done, all the planning to be dispensed with, the planning requirements to be dispensed with. What we need is what they call the 278, which is all the infrastructural costs that will need to be done to be approved, have the wayleaves ready so that we can actually start implementing all those things. Effectively allow someone who's buying the site to actually walk onto site immediately. That is what Equites with the assistance of Newlands is aiming to do. We are certainly on the way to doing that.
As I said, the engagements with the local communities have certainly improved dramatically from pre-planning to post-planning. We hope to work constructively with that local community to bring facilities to the local area, but more importantly, jobs to the local area. Basingstoke really is the first footprint of a much greater scheme that Basingstoke Council has for the local area. It is also in the municipal body's interest to actually see us get going and start bringing some meaningful development to the area. I think all in all, patience is a virtue. It has been a long journey, and we do understand that, you know, some of the shareholders have sort of feel they're a bit long in the tooth on the Basingstoke thing.
Unfortunately, the reality of planning in the U.K. and the risks associated, I think, are highlighted in full view in something like Basingstoke. I mean, there are examples where, unfortunately, some people have gone this full journey that we've done in Basingstoke and still not got planning. We count ourselves to be on the right side of the curve, and we will at the appropriate time be able to announce something meaningful, which will create some shareholder value.
Thank you. The next question, and again, I'm grouping together two questions. Meyer wants to know, on the HSBC and Aviva portfolios, how strong has the interest been, indicative pricing relative to book, which I think you spoke about. And then will there be a CGT impact? I'll take that one. And then have we factored a successful disposal into FY 2026 forecast? Do you... Nazim was asking a similar question about whether we've taken it into the forecast. Yeah.
Yeah.
You wanna start and yeah.
Okay. I mean, in terms of the interest has been significant. I think we've had more than 30 parties look at it. We would like to isolate that down to probably. Again, I may be speaking out of turn here and the team at ACRE will probably lambast me for this afterwards. We'll probably looking to streamline that down to no more than six or seven participants post the first round. Following which, I think we'll go through a process of inspections of the properties. I think some breaking news of yesterday, which is obviously quite positive as well, is that the Evri facility, which is in the portfolio, and it's a pretty substantial sort of facility in the portfolio.
There's some breaking news from yesterday that it would seem that DHL are in the process of taking out Evri, obviously, which will certainly enhance the covenant strength of the facility, which is something that the potential buyers of the facility will be looking at very keenly. Obviously, it's not a done deal, and we'll need certain regulatory approvals, but obviously every little bit sort of helps in the process. We are confident that the pricing will be strong, and that the counterpart on the other side will be a counterpart of very deep pockets, which gives us a lot of confidence that the transaction will actually materially happen.
Okay. This one, let's see. GC. We envisaged it being a share sale transaction. Also, even if it was a property transaction, in the U.K., base costs were reset at 1 April 2019. We don't envisage there being a massive capital gain, if any, at all. Just in terms of the forecast, included in the forecast, we have assumed transfer of the HSBC assets. Again, as Andrea said, that will only happen in the beginning of FY 2026 or, sorry, the beginning of calendar year 2026, which means that the impact in our FY 2026 will be really tiny. The reason we have a range is, I guess, that from the Aviva portfolio perspective, again, we've factored in both scenarios.
Again, the full impact won't be felt in FY 2026 because this will only happen in the second half of the year. We have taken into account both scenarios, and that's why we're providing you with a range in terms of guidance.
Of course. Thanks.
Okay. I think we have time for one more question, just from a strategic perspective. Again, I'm gonna lump two together. With the proceeds from the U.K. disposal, should there arrive, or should it conclude, would you consider acquiring any other listed funds or private players in South Africa in the next five years? And then secondly, once we have exited, are we considering other jurisdictions, or are we happy to focus on South Africa 100% in the short term?
I mean, from an acquisition point of view, we always looking. You know, the challenge obviously is to get commensurate property at the commensurate value. That is the first challenge. In terms of corporate activity, I mean, you know, it would be, there's been a couple of ideas bandied about at our executive level. However, I don't think anything meaningful is possible with any sort of counterpart in the marketplace at the moment that would be enhancing to the Equites shareholder, while also giving whatever other organization's shareholder a meaningful positive outcome. Those things can change.
I think having such a strong balance sheet, as a consequence of this sale, would put us in a position of great strength, and we will continue to investigate all opportunities that make sense to ensuring that we remain strategically focused to what our essence and what we do and what I think what we do very well.
Other jurisdictions.
Other jurisdictions. I think the U.K. worked really well for us for two reasons. The first one obviously is that we, as a management team, we had insight into the marketplace already, so our ability to go there was not as a complete unknown. During the process of Brexit, we did investigate other jurisdictions. The board felt that, you know, should Brexit be catastrophic, you know, should we be investing in the U.K.? We did quite a bit of work on various jurisdictions. I think the one we did the most work on was Netherlands. We probably missed the boat there. By the time we were looking at the Netherlands, the pricing in the Netherlands had become very, very tight. That obviously being a great jurisdiction for especially e-commerce, with 17 million people living in a very densely populated area.
That being said, you know, the process for us to make a meaningful decision would require the ability to invest in jurisdictions that afford predictable and sustainable income growth over time. That allow us to create a narrative which feeds into our distribution per share offering that we've got. Coupled with that also offer us a net asset value appreciation in terms of the product that we put on the table. Now, with where interest rates sort of have went to in the U.K. and with the five-year rent review mechanism, the U.K. low-interest rate environment allowed us to grow the portfolio to a size. Unfortunately, we were not able to get that portfolio to what we felt the ZAR 1 billion mark.
Billion pound mark was where we needed to get to as a consequence of market conditions changing. Had we got the portfolio to that size, we would have had sufficient lease negotiations in every calendar year to sustain that investment over time. The unfortunate reality is that we were in a position where we had rental growth over a period of maybe two and a half years of that period of five years, where we were going through all our rent reviews as we've had in the last couple of years, and part of the reason that we're looking at disposing of it is that apart from Evri and DHL Leeds, every single one of the properties in the portfolio has actually gone through rent review and has seen a significant growth. Now, do we foresee 40%, 50%, 60% growths in rentals again in the next cycle?
Categorically, the answer is no, we don't. We see those rental growths stymieing back into a more normal pattern, if you like, and hence the carrying cost for five years at the is no longer going to be rewarded as an investment in a South African property. Are we looking at other jurisdictions? We're always looking. As I said, we studied a few other jurisdictions apart from the one that I mentioned earlier. We continue to study them. I think it's important that as a management team we debate these things and see if there are opportunities. As things stand today, as our board stands today, we are committed to investing that money in S.A. for the time being, but with an open mind to anything that may come in the future.
I think that's all we have time for.
Is that all we have time to?
Yeah.
Awesome. Thank you, everybody. It's been obviously a massive pleasure to deliver these numbers to you all. We look forward to engaging with some of our bigger shareholders in the next couple of weeks in our one-on-ones. May you have a fantastic day further and thank you. Bye-bye.