Good morning, everybody, and welcome to Equites Property Fund's interim results for the period to the end of August for the financial year to February 2025. Welcome you all today. We are not live. We're transmitting from our offices here in Cape Town. For the first time, we're actually doing it on a live stream for these periods. We obviously look to potentially take it back to an in-person presentation for year-end. For the time being, we've decided to do interim results in this way, and I trust everything is acceptable to our shareholders. Let's maybe start with the period under review.
I suppose like everything, it's always good to start with the most important piece of information that many people would be looking for is the interim distribution, which will be ZAR 0.665, which is very much in line with guidance. We'd also like to reaffirm that the payout ratio will be 100%. NAV. As you can see, NAV has come off quite substantially in this period and predominantly attributable to the impact of the ENGL sale. We'll unpack that in a bit more detail later in the presentation.
In a nutshell, the large portion of the write-off in the sale has been recognized up front, and we obviously are going through a process in the ENGL sale that will allow us to potentially unlock significant value for Equites on the back of certain planning consents that hopefully will be coming through in the period ahead. We'll go into a bit more detail of that a bit later. Loan-to-value printed slightly above the 40% mark, which is obviously where we were hoping to be below, as we were at year-end. This very much in line with the trajectory, if you like. We do have significant assets that are in the process of being sold.
Like all these things, sometimes they take a little bit longer than maybe originally anticipated. I think Riaan will unpack that in a bit more detail in the presentation. The flight path from an Equites point of view, obviously, is to get to end of February for year-end with that number printing around the 38% mark and which is sort of a very, very well positioned for Equites going forward. Liquidity, which is obviously important, as we have a strong development pipeline and we have dividends to pay. As you can see, ample liquidity with cash and unutilized facilities. Laila will talk a bit more detail of that later.
Final element which we sort of obviously extremely proud of is 23.5 MW of solar capacity on the in the platform now. The capacity basically increasing from 16% to 19% of the total energy consumed in our warehouses now coming from renewable sources. That number, we are of the opinion, will continue to increase, and we'll unpack that in a bit more detail later in the presentation. Obviously you know the level of increase, 3 percentage points in a six-month period, obviously is quite impressive and we are expecting that to go from strength to strength. I think before we go into the detail of the presentation, just like to take you through, I suppose, the Equites thinking, where we're at in terms of the focus areas.
We've sort of, I think, divided up into five streams here. Obviously, the first one and probably the most important to Equites' sort of history, present, and future is the SA portfolio. It is the backbone of Equites. We, as you are all aware, have done significant developments in what we call Retail Logistics Fund, which is the joint venture with Shoprite. We completed all the works at Canelands earlier in the year. We completed the works at Centurion, and we are very close to completing everything in Coega at Wells Estate as well. Very pleased to have delivered these warehouses very much on time and actually on budget as well.
Notwithstanding the fact that like all these things, you can imagine on developments of that scale that the lead times into them are substantial, but notwithstanding that, you don't always get everything 100% right in design upfront. The consequence of which is that we obviously need to make certain alterations through the process as the development is ongoing. Really pleased with that, and we'll unpack developments in a bit more detail later on in the presentation.
Lease renewals had a very successful run over the last 18 months or so in terms of renewing most of our leases and even in the few instances where we have lost tenants or tenants have decided to move out, we've been very successful in reletting that space almost immediately, and that obviously leads into the fact that we still remain at a 0% vacancy in the SA portfolio. We commenced some speculative developments during the course of the last year, and it was 3 developments for a total of 20,000 sq m.
What we can say is that two of the 7.5s are both gone and the 5,000 sq m development, which is basically PC'd this week. We are currently in negotiation with a couple of tenants to potentially take that off our hands, and we are expectant that before Christmas that that facility should be let as well, which is great news. In terms of the U.K. portfolio, the reviews are going well. DPD Burgess Hill obviously was a record-breaking review. DHL Reading has come through now in the high 20s, which is also exceptional. We're really pleased with that. We're currently negotiating with Puma for the review on that particular property, which hopefully will be done before Christmas. We have a review on D...
Roche down at Burgess Hill as well, which is an index-linked review, so it will just be a scientific exercise. As things stand today, our U.K. portfolio, our stabilized U.K. portfolio continues to deliver. You can imagine with the reviews coming through, the increased income is obviously very beneficial and has also contributed significantly to our DPS position and obviously very pleased with that. Notwithstanding that, we do have two properties in that portfolio at the moment that are going through a process of being sold, and we will sort of announce to market as and when we're in a position to do so. In terms of the funding and the balance sheet, obviously we continue to do exceptionally well in the debt capital markets and obviously hats off to the treasury team.
done some sterling work in the last sort of 18 months, two years, but in particular the last 6 months we've seen some success and we are going to auction again in November and expecting also to potentially do pretty well there too. That's fantastic. We instituted a DRIP with the year end in May and yeah, a bit too successful and you will see the effect of the DRIP in the numbers as we unpack them later and Laila will go into that detail. We were surprised by how successful it was. We weren't expecting that, but obviously we welcome the fact that the shareholder base obviously is still very confident in the Equites name and what we're doing and hence the uptake being so strong.
In terms of the sale process, as I said earlier, Riaan will be talking a bit more detail there and as you can see, the sale process has allowed us to recycle that capital out of some of our older, smaller assets into the newer state-of-the-art assets. In terms of the ENGL platform, the transaction has been concluded as we, I think we uncovered that and gave that to the market in our pre-close earlier in the year. The framework has been agreed. The process of that complete unpack will take time. We've received the first GBP 4.5 million, but ultimately Equites' position is to maximize the value creation out of what we have.
We have increased our position in Basingstoke. We'll talk about that in a little bit more detail, but we are expecting to go to three committee meetings before Christmas this year, which should unpack significant value for Equites should we be successful. Again, as I said, we will talk about that in a bit more detail later in the presentation. The final element of the strategic focus obviously is the alternative revenue. Solar continues to be rolled out exceptionally well.
The green energy notwithstanding the fact that we have a situation where we haven't had load shedding for a while, there's no question that the roof space that we command and the ability to provide energy to our clients and the intelligent use of that energy, sometimes with the use of batteries. Equites doesn't provide batteries for the tenants, but obviously we design the system to allow for batteries should the client decide to put batteries in themselves. The combination of the two obviously is extremely beneficial to the client, but more importantly, obviously what it does do as well is it gives ESG benefits to both us and our clients, but more importantly gives energy security as well.
We entered our first wheeling agreement as well in the period, and that is providing energy to the office that we are currently sitting in and transmitting from and obviously very pleased with that and hopefully be able to utilize this immense roof space that we command to do significantly more wheeling opportunities in the periods ahead. I think we can then maybe go to a little bit on the SA market. I think the SA market is extremely compelling at the moment. You can see from the MSCI data that's up there that there's no question that the sector is outstripping all other asset classes in real estate and obviously we're very pleased to be exposed to this in our entirety.
The vacancy levels across our portfolio obviously being 0, but across most people's portfolio that play in this space is an all-time low and basically is below 1%. The demand drivers are still there from the client base and this is really linked to the fact that supply chain is evolving extremely quickly and as a consequence, having suitable real estate to allow for those technological advances to be efficient in space is becoming more and more important. We're seeing the focus at board level, at operational level, across a whole host of clients becoming more predominant. What we're seeing across our base portfolio is also the negotiations that we're undertaking. Our rental achievements are sort of between ZAR 85-ZAR 95 a sq m.
I would like to caveat this with the fact that this would be for a warehouse that would have less than 10% offices, where offices are slightly higher. I think Rian will probably talk to this a little bit later, where we have some warehouses that have slightly higher office contents. You'll start seeing that those re-rentals are basically over ZAR 100/sq m. Over and above that, obviously, we'll caveat that also with cross-docking facilities where your site coverage is sort of in the mid-20s. That will also occasion rentals being well over ZAR 100/sq m. What's been quite an interesting unpack for us in terms of our portfolio is that we've come the full cycle of 10 years.
This year on the eighteenth of June is 10 years since we listed and we did a little bit of an unpack in terms of where our reversion releases went to. If we had a straight line lease and we carried through the rental where it started to where it was on the renewal, what we've seen is that the actual annualized growth rate across our portfolio is approximately 5%. That really talks to the reality of potentially looking at a Shoprite lease with a 20-year term on it and 5% probably being there or thereabouts correct, which obviously I shouldn't be admitting in front of Shoprite, but notwithstanding that, I think the numbers talk to that.
More importantly, I think what it talks to the fact that we have the ability in the long leases to not be spending money on lease renewals, on paying agents, on affording new tenant installations to clients and all these various things which also add costs to a process over time. The essence of the Equites business with this very long WALE is absolutely critical to saving significant cost in the process. Tenant demand remains high, and we'll unpack that in some of the developments we're undertaking and some of the negotiations we're undertaking. Through our land bank, we are looking to capitalize on that in a meaningful way.
If I can add to that also that it would seem in Gauteng I think the R21 would probably remain the logistics central. I think it really is becoming a hub for logistics. More importantly, what's interesting to see is the scarcity of land availability in both the Western Cape and KZN with availability of land obviously driving rentals pretty hard there. It will be interesting to see where new nodes can be unpacked. In terms of the U.K., take-up in the U.K. has continued to be strong. What's interesting about the take-up in the U.K. in the last sort of 6-9 months has been a lot of the take-up has been absolutely linked to pretty large units.
What we're seeing is 500,000 sq ft, which let's turn it into South African into 50,000 sq m-plus warehouses seem to be going fast and furious. The space between sort of 10,000-30,000 sq m, maybe a little bit less so. And what's interesting is that the developers in the U.K. that have got the courage to develop above 50,000 sq m speculatively seem to be doing extremely well at the moment. But like all these things it will probably end up being oversupplied and then the demand drivers will dry up. But notwithstanding that, the take-up remains and it's positive.
We are still seeing as a consequence of the scarcity factor, notwithstanding the fact that the vacancy level has gone up in terms of gray space that is coming back to market, rather than brand-new space with all the ESG credentials. Notwithstanding that, what we're seeing is a 9.3% year-on-year increase in rentals. I think we can caveat that also with saying that you probably need to exclude London from that. I think London went extremely hot for the maybe three years before that. I think that London has cooled off and it's probably a little bit more horizontal. Prime logistics yields, I think still remain between 5% and 5.25% band.
I think when we start seeing meaningful interest rate cuts the expectation is going into 2025 that will compress into the fours. Obviously, we are looking with very keen interest to see when the market starts going there. Obviously, as the risk-free rate in terms of what government bonds are offering starts diminishing sort of going into 2025, what we're seeing is also we'll start seeing that core and core plus capital coming back into the market, which should drive that yield compression. The current high cost of capital, so notwithstanding the fact that we have seen the first interest rate cut, that interest rate is still fairly high. The transactional evidence is still limited.
The weight of capital that's waiting with bated breath for the movements will be interesting to see play out into 2025. As I said earlier, the rent reviews have gone well. We expecting you know a very good rent review with Puma coming through as well now. More importantly, when you look at the weight of our expectation of what will come through on the rent review, if you were to allow for that rent into our portfolio, what you'll see is our U.K. portfolio currently valued at a yield of about 4.8%, but it's a reversionary yield to 5.5%.
Obviously, what that talks to is the fact that we are gonna be going into a 2025 where that yield compression may start going into the 4s, and we will have a portfolio that will be off its current rent, be valued in the mid-5s. Obviously that talks to some pretty significant compression coming through for our portfolio into the new year. As you can see, the review cycle that we've been going through over the last sort of 24 months will for all intents and purposes sort of come to an end, I suppose, in February next year. We do have DHL lease in October, back end of next year. It's a small unit, so the effect on the entire portfolio will be limited.
Obviously in the cycle, we've got the final one, which is Avery, which is still a couple of years away in 2027. Notwithstanding that, Avery is already highly reversionary and obviously very excited about what could happen to that when it's due. In terms of developments, we concluded the Encore SPAR DC at Jet Park earlier in the year and we are pleased to report that the client has moved in massively successfully and his business is really operating massively efficiently and the consequence of this obviously has opened up spirals of communication within the SPAR organization and we'd be obviously welcoming of any opportunities that may come in the future.
We continue to engage with the team at SPAR and hopefully there could be something coming out of that at some stage in the future. We have two parcels of land left at Jet Park. One of them is quite far down the line in terms of a negotiation for a pre-let, and we hope to be able to announce that to the market, let's say before year-end. In terms of the two spec units that we undertook at Meadowview, as I said, two of them have gone and the third one is currently in negotiation, and we hope to have that let before Christmas this year. We've commenced a further speculative unit at River Fields on a piece of land that we have there, and that will be for delivery middle of next year.
As luck would have it, we already have somebody nibbling at that and obviously very excited about the fact that our product is so well received in the marketplace. As I said, Wells Estate should be PC'ing during the course of this month, and then effectively our entire Shoprite portfolio will basically effectively be income producing in early 2025, but certainly before year-end, which is great news.
In terms of our current situation, in terms of where we find ourselves, in terms of developments, I think the graph here is very telling in as much as that you can see the quantum of developments that we've undertaken over the last few years, and you can see how the focus has shifted from UK back to SA. For the time being, we see that basically becoming 100% SA in the upcoming years. We will still be involved in the unpack of our development land in the UK and hopefully exploit it in a way that we can create some value, but without taking any ownership or exposing the balance sheet to any undue risk. In terms of SA, the Land Bank is allowing us to continue to negotiate.
We are estimating that we will probably have ZAR 1 billion of developments to unpack in the year ahead. If we add that to the fact that where the world is going within SA, with the positive outlook, and the level of demand that we think will only go from strength to strength, we are estimating two years of ZAR 1 billion development pipeline work coming across.
We currently are negotiating on in excess of 150,000 sq m across seven different schemes, and that excludes any potential developments coming out of the Shoprite JV, which obviously bodes well and the level of certainty that these developments are gonna give us with long-dated income, with good escalation clauses, and obviously affording us also the alternative revenue from the energy sources coming off the roofs as well. I'm gonna hand over to Riaan now, who's gonna take us into a bit more detail in terms of what's actually happening on the ground in our portfolio.
I think incredible work that Riaan and his team have done over the last 18 months to allow the business to continue to move forward successfully. Riaan.
Thank you, Andrea. As always, it gives me great pleasure to present these impeccable property fundamentals to you. All our strategic and operational investment decisions at Equites are continuously aimed at strengthening these property fundamentals. Firstly, because it translate into the secure, sustainable, and predictable rental stream that we need as a REIT. Secondly, it enables Warren and Justin and the treasury team to secure funding for us at incredibly low cost of debt levels. You'll see that our WALE, our weighted average lease expiry profile, has increased from financial year end 2024 from 12.6 years to 13.2 years. Our SA rental escalation at, on average is now 6.2%.
We had a significant rental uplift in the U.K. through the rent reviews at DPD Reading, DPD Burgess Hill, as well as GXO Coventry. There are further rent reviews at Puma and Roche to be concluded in the H2 of this year, and we are also expecting some significant uplifts there. Our portfolio has increased to ZAR 28.3 billion, attributable to a 2.2% like-for-like growth, as well as some completed developments, which Andrea referred to. Our U.K. valuations were stable, however, it was offset by initial impact of the ENGL disposal. On 31 August, we had one vacancy, and that vacancy has fortunately been filled, and taken up by a multinational on a seven-year lease, which starts in October this month.
The portfolio split, as you will note from the graph, 78% of our portfolio now consists of pure logistics properties. The exposure to income producing assets in SA has increased to 63%, up from 58% at year-end. Land in SA and developments at SA now comprise 8% of the total portfolio. It was 11% at year-end, which shows that we are successfully converting landholding into development income producing assets. Our exposure to U.K. has decreased from 23% at year-end to 20% at the end of August. You are well aware of our disposal program, and we currently hold about 9% of our total portfolio as held for sale assets, which is reflective of our disposal program, which is currently underway.
The lease expiry profile in summary, only 23% of our leases by GLA expires over the next five years, which means that 77% of our leases by GLA expires post 1 September 2029. I mean, this gives us enormous comfort, and it allows us to focus on a number of leases every year, which is manageable and without unnecessary pressures. To give you some further context, six of the leases that expire over the next two years have already been dealt with in that two have been concluded through addenda. A further two, we had tenants vacate, and we found substitute tenants, and we concluded new arrangements on five-year leases with the new tenants.
A further two leases, the tenant has indicated in principle that he, the tenant wants to stay, and the only negotiation outstanding now is the new rental. Obviously, this graph shows why our income is secure and predictable. The next slide deals with lease renewals, and we've given you the full detail of the exit rentals and the new rentals at which the renewals were concluded. Now, over this period, the past 6 months, 7 leases were renewed. Now, when I look at that graph, two things stand out for me. Firstly, yes, in some instances, they were reversions. Secondly, when you look at the renewal rentals, they are at significant levels. When you look at the reversions, I think it needs some perspective and context.
Six of the seven leases that we illustrate on this graph were in respect of properties that we acquired in 2015 and 2016 from Intaprop and Attacq. Those properties were developed by the former owners at development yields between 9%-9.5%, and the leases escalated over the ten-year period at 7.5%-8%. Secondly, as I mentioned earlier, when you look at the renewal rentals, they are very encouraging, and it also confirms the significant rental growth that we've had over the past two years. Thirdly, with these renewals, we acquired 16 properties from Attacq and Intaprop, and with these six renewals, 15 out of the 16 properties have now been renewed and are in the base.
I think that gives some context in that our the rest of our portfolio that especially the properties that we developed, were developed at different yields and are certainly currently very close to market-related rentals. Our disposal program that Andrea referred to, as you know, we embarked on this program to recycle capital to deploy into new ESG compliant prime distribution centers, also to reduce our LTV and to ensure that we've got the ammunition when opportunities are there for the taking. This program has already generated ZAR 1.8 billion of proceeds since we started. We have, over the past six months, concluded a further ZAR 1 billion of disposals. These disposals we expect will complete during the H2 of 2025.
We've also earmarked an additional ZAR 400 million of properties that we wish to dispose in the new year. We apply, as we always mention, very strict criteria when selecting these properties. They are primarily older, non-ESG compliant properties and also properties that would have been unlikely to contribute to net asset value growth going forward. Importantly, we've managed to dispose of these properties in aggregate in line with our book values. Our board and investment committee have set very strict criteria on pricing as well, and we are very encouraged that we are realizing the values in line with the independent valuations of our properties which we undertake every six months. That's all for me. Thank you very much. Over to you, Laila.
Thank you. Thank you, Riaan. Okay, let's start with some highlights, and I know that Andrea has touched on them before, so I'm going to potentially race through some of them. Just to start, DPS ZAR 0.665, and this is pretty much in line with our guidance. However, later on we'll get to where we are guiding and how we're comfortable guiding at the upper end of that guidance for the full year. We've maintained 100% payout ratio. In terms of our LTV, our LTV is reported at 41%. However, there are a number of transactions which are still underway, and we expect that to decrease to 38% by Feb 2025. We had a very successful DRIP program in May.
There was 65.9% take-up, and this raised about ZAR 337 million in new equity. Our ICR has improved from 2.2 times to 2.4 times, and this is as new developments come online. Obviously, with the rate cutting cycle having commenced, we expect this ICR to only improve going forward. We have ZAR 2.2 billion in cash and undrawn facilities as at August 2024. And then just in terms of our cost of debt, the ZAR cost of debt is 9.09%, so we continue to see a reduction in this cost of debt, and our U.K. cost of debt has remained at 3.92%. Let's jump straight into it and let's look at the distribution statement.
What drives our business is that property-related income, and if we look at net property-related income, it increased by 8.3% over the period. This was supported by like-for-like property income growth of 5.6% over the period, and then the additions, particularly of the Shoprite assets and the Encore asset, which Andrea spoke about earlier, increasing that to 8.3% over the period. There was an increase in admin expenses year-on-year. This is an inflationary increase as well as some one-off consulting fees, professional fees relating to that E&JL disposal, which was concluded during this period.
If we look at the net finance cost, and this ties in with what I'll speak about in the balance sheet, but there was a higher outstanding debt balance if you compare 1H 2024 to 1H 2025, and this resulted in a higher net finance cost if you compare the two periods. Despite the cost saving and the saving in the margin, there was a slight increase in that net finance cost. If you look at the notes and you look at some of the disclosure that we've put out, you'll see that the capitalization rate has also decreased. As Riaan said, more of our portfolio is now income producing, which has naturally resulted in that finance cost capitalized becoming a smaller component of the gross finance cost as well as distributable earnings.
If we look at the current tax expense and other income, there's a small current tax expense expected, and this is as a result of the Newport Pagnell transaction. The antecedent dividend is as a result of the DRIP in May. If you look at the non-controlling interest, that's increased, and that's as a result of the increase in the Retail Logistics Fund portfolio. There was an increase in assets as a result of the development at Wells Estate, the development at Kanaland, the increase in or expansion at Centurion, and all of that has resulted in an increase in the non-controlling interest, particularly relating to Retail Logistics Fund. That takes us to our distributable earnings over the new number of shares in issue, and that takes us to our distribution per share of ZAR 0.665.
Now, if we just look at what makes up this distribution, I think we start off with what the increases were, and we spoke about the like-for-like rental growth in South Africa of 5.6%. This added ZAR 0.0331 to distribution per share. We then look at the like-for-like income growth in the U.K., and it's quite nice to show this. Andrea spoke about the uplifts in those portfolios. What we actually had in this period was a 7% uplift or like-for-like increase in the U.K. portfolio as a result of those rent reviews which have come through. The Shoprite dilution.
The way we think about the Shoprite dilution is we look at the yields at which these deals were concluded at compared to the cost of funding these deals, and that resulted in some dilution. Now, importantly, once that dilution is in the base, we see that escalation coming through, and you'll see that that comes out of the distribution growth. Once all of those transactions are bedded down, we expect that to be in the base, and you'll start seeing the growth coming through from the escalations. Again, there were some new developments which contributed slightly to the dilution for the period. We spoke about this at length.
When we were looking at how we were thinking about the U.K. portfolio, we did say that we wanted to look at rebalancing that U.K. LTV, and that resulted in some dilution during the period. Just switching U.K. debt for SA debt or repaying the U.K. debt resulted in some dilution. We split out the impact of debt saving because we really wanted to show what the impact was of the decrease in those margins through successful debt auctions, and that increased our distribution per share for the period. There was some impact as a result of the change in admin costs and the DRIP dilution for the period, which takes us to the ZAR 0.6650 distribution per share.
Okay, now if we look at the balance sheet, I think we have to start by looking at what drives our business, and that's the investment property. If you look at the investment property for the period, we had like-for-like valuation increases in South Africa of 2.2%. In the U.K., valuations were flat in GBP terms. We'll talk about the FX in the next slide, but in GBP terms, valuations were flat. If we look at the investment properties held for sale, you'd see that that balance increased from Feb 2024 to August 2024.
If you look at it in aggregate, the investment property plus investment property held for sale, you'll see that that was reasonably flat. However, you look at the movement, and you'll see that we actually transferred a number of those investment property assets to investment property held for sale.
I just want to pause and talk about that actual investment property held for sale because it ties into what Riaan was saying about the disposal program. We started off the period with ZAR 2.1 billion of investment property assets held for sale. A total of ZAR 0.5 billion SA assets has actually been sold, so transferred out of that held for sale balance, and ZAR 1.7 billion of that opening balance remains held for sale. What happened during the period was we identified a further ZAR 1 billion of assets, which we've identified as part of our disposal program, and that was then transferred into that balance of assets held for sale.
We now have ZAR 2.7 billion worth of assets held for sale. We expect to dispose ZAR 2.5 billion worth of these before February 2025. Our disposal program is well underway.
We expect to dispose of a number of these assets before period end, both in South Africa and in the U.K. Now, if we move on to just some other highlights, which I just wanna point out, the loans and borrowings increased by ZAR 0.4 billion from Feb 2024 to August 2024, and that was really as a result of drawing down on those facilities to fund the development activity for the period. We actually spent ZAR 0.9 billion or ZAR 900 million in development activities, and that was funded through increased borrowings as well as the recycling of proceeds. If we just look at the share capital during the period, you'll see that that has increased, and that's as a result of the share issuance in respect of the DRIP.
I'm gonna move on now to the movement in NAV and probably spend a little bit of time here. If we look at the movement in NAV, we started the period with the NAV at ZAR 17.14. The SA portfolio, as I said, there was a like-for-like increases of 2.2% on a like-for-like basis. In the UK, it was flat for all intents and purposes in GBP terms. The major detractor to NAV was really the ENGL transaction. I wanna pause and just explain what happened. Andrea will go into more detail about the actual transaction, but in terms of the SENS, we recognized GBP 4.5 million upfront. That was cash in the bank upfront consideration. There was then a deferred consideration of GBP 4 million.
In total, in aggregate, if you look at the increase in our assets, that was GBP 8.5 million. Let's round it up around ZAR 200 million. What happened on the derecognition part was we had to derecognize all the initial sale companies, which were either sitting in investment property or in trading property. Then what we also did was we looked at the subsequent sale companies, and we impaired those or took a fair value write down on those as a result of realizing that we'd only recognize GBP 500,000 in relation to those subsequent sale companies. In aggregate, we actually derecognized or impaired ZAR 400 million.
The net impact is really ZAR 200 million to NAV, which is what you see in that E&JL transaction, and that's the movement attributable to the E&JL transaction. Now, what I have to say is that for accounting purposes, we're only allowed to recognize what we know. Andrea will talk about the possible or the potential consequences of potentially unlocking some of those further sites. Unfortunately, that's not how accounting works. We've had to recognize what we know for this period, and that's the impact that is recognized and that you can see in the movement in the NAV.
From a Forex perspective, when we closed our cross-currency interest rate swaps, we said to the market, "As a result of closing these swaps, we are leaving our NAV in the U.K. completely unhedged." Now, during the period, we saw an appreciation in the rand.
At February, the rand was at 24.33 to the pound. At August, it was 23.31 to the pound. There was an appreciation of about 4%, and that's why you're seeing that impact in the FX, which negatively contributed to the NAV. If it was converse, you would have seen that appreciation in the NAV, but we were very upfront and clear about the fact that we were going to leave that NAV completely floating once we closed those cross-currency swaps. We saw massive support for the DRIP. Andrea said it may have potentially been too successful, but we were very happy raising some equity for the period that was at a discount to NAV, and that contributed to the decline in the NAV for the period. That's where we end up with our NAV at ZAR 16.32.
I just wanna show the movement in LTV. We started the period at 39.5. The upfront impact of the E&JL transaction increased the LTV by 0.2%. The SA disposals for the period, as Rian spoke about, decreased the LTV by 0.9% for the period. There were some SA developments which increased the LTV by 2.9% during the period. The DRIP. The successful raise of ZAR 337 million reduced the LTV by 1.1%, and there were some other impacts which increased the LTV to 41%.
Now, I'm going to move over to the next slide because we just wanted to show what we are seeing and how we're seeing this LTV really unpack for the period. We are seeing further SA disposals. As Rian said, there have been heads of terms agreed over two portfolios in South Africa, and we expect those to decrease the LTV further. We then also have earmarked a further ZAR 400 million worth of SA assets, which we expect to reduce that LTV before the end of the financial year. Then we've identified certain assets in the U.K. Now, this is quite a big element of reducing that LTV.
I think Andrea will touch on that when we're just looking at our prospects, but really we have identified some assets in the U.K. which we will look to dispose of before period end. We've just provisioned for some contracted developments. We only have ZAR 600 million worth of contracted developments before period end, and then we've made provision for some uncontracted developments where we expect to commence some developments before period end and some other elements, and we expect the LTV to essentially end up at 38.2% or 38% by February 2025. We just wanted to touch on some treasury highlights because once again we think we've done phenomenally well in the debt capital markets, and I think it would be remiss of us not to pause and reflect on how we've done.
At period end, we have ZAR 2.2 billion cash and undrawn facilities. We have ZAR 2.5 billion worth of debt facilities maturing in the next 12 months. Of that, ZAR 1 billion is listed debt, which we are looking to refinance. We will have a debt auction in November. As history has shown, we have done exceptionally well in these debt auctions, and we'd look to continue successfully placing debt in the market in November. We have already engaged with all of the funders as relates to the remaining ZAR 1.5 billion, and they've all expressed their appetite to either refinance or to roll those facilities. Again, as I pointed out, our interest coverage ratio has increased to 2.4 times, and we only expect that to improve going forward.
If we look at our balance sheet management, I think we've touched on this. We raised some equity through the DRIP. We have successfully disposed of ZAR 0.5 billion worth of assets in SA and ZAR 0.1 billion in the U.K., so that's ZAR 0.6 billion worth of disposals in 1H. We expect further disposals in the H2 of the year to reduce the LTV to an estimated 38%. Our weighted average debt maturity has reached three and a half years. We listed successfully a seven-year note for the first time in February 2024, and then we tapped that note in April 2024. We're very pleased with where our margins are, both on three-, five-, and seven-year debt. Those continue to reduce over time.
Our cost of debt in SA has reached 9.09% and has remained stable in the U.K. at 3.92%. 86% of our debt over one year is hedged. Our treasury policy requires us to hedge at 80%, but we look for opportune moments in the market to increase that where we think that the market allows for us to do that at acceptable or advantageous levels. There's an interest rate sensitivity of 36% in our portfolio or over our debt. We have looked at it and just this morning we've looked at what the market is pricing in, and they're pricing in 100 basis points of decreases both in SA and the U.K. before the end of calendar year 2025.
While we will benefit from that, it won't be a 100% benefit from that because we only benefit 36 basis points for every 100 basis points decrease in the base rate. Just to reaffirm, GCR has affirmed our long- and short-term ratings of AA- and A1+, which we're very comfortable with, and we have an unencumbered asset ratio of 54%. This just really shows, and I think we've spoken about it significantly or quite a bit, we're very proud of where our cost of debt is, but it just once again shows SA cost of debt at 9.09%, and U.K. cost of debt at 3.92%, which is actually below SONIA as a result of our Aviva facility, which is a long-term, fully hedged facility. That's it from me.
I used to do the ESG slide, but Andrea has become a bit of an ESG fundie himself, so I'm gonna hand over to him to take us through these highlights.
Well, thank you, Laila. She's as ever too kind. I think it's been an exciting period for us on the ESG front. We achieved our first ever EDGE net zero carbon certification on a building in Germiston in Johannesburg. I'm led to believe it's only the second one that's been achieved globally, but obviously the first one in our portfolio. We currently have two other facilities that are going through this process, and we'll hopefully be able to announce that within the next six to nine months that they will also have achieved that net zero carbon. As you can see, the emphasis that as an organization we're placing on the sustainability metrics are absolutely critical to our DNA, if you like.
We made this decision probably about five years ago, and like all things, it takes time to educate oneself, it takes time to start implementing, and then also it takes time to be able to impart that knowledge to your clients and work together to try and achieve these things. I think testimony to the ESG team at Equites and the work that they've done to get us in this position, I mean, we continue to add to our solar capacity up at 23.5 MW. The expectation is within the next 18 months with what's coming online in terms of developments and stuff, is that we'll probably be able to take that close to 30 MW within the period. 32 properties basically have PV systems, and that's up from 29.
What you'll see is that number will continue, but as a percentage of the total portfolio, it'll become bigger and bigger because as a consequence also of the sales program, a lot of the properties that we are selling probably are in a position that make it relatively not cost efficient to impart certain things to them because of the way that it were built at the time. Our renewable energy that's coming out of our systems, effectively, we just shy of the 20% mark in terms of the total energy consumed in our warehouses, and obviously we have expectation for that number to continue to grow.
I think the most exciting thing maybe because it's new to us is that we are looking at our first sort of water treatment plant with a view to basically being able to treat both gray and black water. We are in the final throes of the final design process at one of our parks in Gauteng. We have identified four further parks where we are looking to install similar type of systems. What's interesting about this though is that whilst the cost of water probably doesn't make these as profitable as the solar sort of implementation that we've undertaken, we're of the opinion that it's absolutely vital that we are ahead of the curve here.
We see water sustainability, notwithstanding the fact that the infrastructure is probably not as good as it could be, and it's crumbling. I think it's an essential part of where things are going globally and being at the cutting edge of what can be done and taking it to this level is really buying in a lot of goodwill from clients, especially the global multinationals and the big listeds in South Africa that we are effectively taking the process to them rather than the other way around. Absolutely very excited about the first plant. Hopefully gonna come up and will be fully functional in the H1 of next calendar year. I'm hoping the Q1, but probably realistically more the H1 .
We hope to be able to report on that during the course of next year with some key metrics. We are estimating that we will be able to recycle approximately about 70% of that water, which will greatly reduce the consumption. Obviously, we're not gonna be recycling it to make it potable water, but rather to be used for the flushing systems, for the irrigation systems, and also for the car wash systems that are quite extensively used in some of our facilities. Very exciting, and obviously a further feather in the Equites cap in terms of trying to be at the cutting edge of what's going on and what we can afford our clients for the future.
I think it's maybe now it's time to talk about the ENGL disposal in a bit more detail. As you're aware, the first part of the transaction comprised the sale of a few of the SPVs that controlled certain land portions. Now, that came with a GBP 4.5 million tag, which is already basically cash in the bank. There's a GBP 4 million deferred consideration which will be coming effectively from the profitability of schemes that we are undertaking with Newlands, from their portion of profit which will be afforded us during the course of calendar year 2025. The vast majority of that profit will be coming out of Newport Pagnell, which obviously is contracted and is progressing on time, on schedule, and most importantly, on budget.
Over and above that, we have 3 SPV companies that had an Equites guarantee against them. Those guarantees are in the process of being removed, and the consequence of the removal of those guarantees is those SPVs will transfer to the Newlands joint venture at a half a million pound per site. Our expectation is that 2 of the 3 sites will potentially be done before the calendar year is out. The third one will probably go to the longest stop date of 30th June 2025. The remaining part of the ENGL joint venture basically comprises of effectively 4 elements. First one, Basingstoke, which I mean has been spoken about extensively over the years. We have been fairly unlucky with the planning processes there.
We should be going to committee again this year on that before the year is out. We will be going to committee this year. Our expectation is we're going with a recommendation for approval.
I think the most important part of this is that with the new Labour government in place, the pressure on planning approvals and the pressure that committees are being put under to not succumb to political nimbyism is at an elevated level. Notwithstanding that though, I think the work that the team have done on the ground in the U.K. with the public participation, with the processes of rejection being listened to and adhered to and the work that we've done and the ability for us to present to the committee the fact that we have reduced the visual impact dramatically from the first scheme that was rejected bodes well for a successful process in that regard. The next three parts basically is Thrapston, Codden Park, and Newport Pagnell.
Maybe I start with Newport Pagnell. That obviously is under contract with Panattoni, as was issued in the SENS earlier in the year. That is, as I said, on track and progressing well and should be delivered in terms of top structure buildings by end of July next year. Then all the infrastructure works on the road infrastructure that's gonna be feeding into Newport Pagnell's area should be completed by October 2025. That looks to be going well and obviously very pleased with the outcome there. Thrapston, we are expecting to go to committee before year-end, and the consequence of a successful planning there will result in the new Newlands joint venture effectively drawing that land from us and Equites being afforded a fee for that.
We hope well and very much like basingstoke talking to council that will probably be receiving a recommendation for approval as well. Our expectation is that there should potentially be a positive outcome of that. The final one, obviously, is Codden Park. Now, Codden Park is currently in the final throes of a negotiation for a forward funding deal. There's a couple of title elements, nothing to do with planning. Planning has been approved already and is consented. There's a couple of title issues that are being resolved at the moment. The expectation is that this deal potentially should be consummated before Christmas with a view to being on-site in January for a delivery at the back end of 2025 or beginning of 2026.
We will keep the market abreast of this as and when the deal is 100% unconditional. At the moment it is still very conditional. The value unlock that will come as a consequence of all these items will certainly more than compensate the NAV number that Laila presented in the presentation in the upcoming periods. Obviously, as a consequence of the fact that we are not totally in control of the outcomes and while we remain very optimistic of the outcomes, we're not totally in control of them. Until we are in control of them and we can effectively from an accounting perspective, as Laila would say, we can then book those in and bring them through the process.
We obviously remain optimistic and the bedding down of this is gonna be an 18-month process. Equites is in no rush to do anything that will compromise the positive potential outcome of the unlock of it and also maintaining that positive relationship with our Newlands partners. You know, as difficult as negotiations sometimes can be, the positive thing is that we've come out the other side and with very clear vision of where Equites wants to go and where Newlands wants to go, and very respectful of each other, and we continue to work together to get these things over the line, which obviously is fantastic for the process. I think we end the presentation now with our prospects.
Before I turn to the thing, I think you know where I'd like to start is obviously I'd like to start with the fact that we've come out of 24 months of, I suppose, what we would define at Equites as almost a perfect storm. We came through a period of very fast increasing interest rates, which had specifically in the U.K. a massive impact on valuation there, had a massive impact on our land bank there and the opportunity to deliver product to ourselves at a discount to value, which would have allowed us to conclude successful transactions as we did at Hoyland, as we did at Peterborough, with the Newlands team.
The reality is that the consequence of where the markets have gone, that particular vehicle for our business was no longer functional. We've come out of the cross-currency swaps, again, for the same reason. They were no longer functional, and the elevated level of risk that they basically brought to our balance sheet was no longer worth the process. We've come through, as Riaan unpacked a cycle over the last 24 months of significant lease renewal. During the past 10 years, there were probably three or four years that saw no rental growth coming through the system, and the consequence of these leases with sort of 7.5%-8% escalations put them in a position of being reversionary. We've taken that.
We've bedded that reversion into our numbers. We've renewed, as Rehan said, 15 of the 16 leases. Those numbers will start basically being delivered upon from the base that we're in now. The final element, obviously, is as we unlock the final piece of capital out of the U.K. joint venture, and we start bringing that capital back to SA, we've got this incredible portfolio, and opportunity and land bank to be able to redeploy that capital in a meaningful way. The optimism, so the future, what are we looking at? We're looking at a country that for the first time in many, many years is talking about the opportunity of 2.5% GDP growth coming in 2025 and potentially 2026.
The effect of that across the platform will necessitate significant real estate investment from operating businesses in SA with that kind of growth coming through. Supply chain is becoming ever more important. The quantum of data that is being presented to the market and the importance of creating a supply chain system that allows you to get product to the end consumer in an ever shorter period of time will necessitate more and better real estate to be able to perform that function. We believe as Equites we are in a...
The pound position to afford clients not only the IP that we've developed from working with multiple types of businesses, but also the ability of our balance sheet and the cost of our capital, and an improving market metric for property in general, that will afford us the opportunity to be able to deliver on that prospect. The existing stock, as you can see in our portfolio, is nonexistent. This is true for most of our competitors too.
The reality is that the top end of the market, but not even the top end of the market, I think like the entire real estate sector of the industrial sector across the country is seeing an all-time low, which bodes well for the opportunity of bringing more stock to play and that bodes well for Equites' prospects going forward. What are our key focus areas? Our key focus areas obviously are the implementation in the most profitable way possible of the disposal of the ENGL platform, extracting the most value for Equites. For the time being, we expect to maintain our stabilized UK portfolio.
We are coming to the end of the review cycle and we will evaluate with our IC and with our board in the periods ahead, should there be better ways to deploy that capital going forward. As the interest rate cycle starts easing itself, should valuations reach significant highs again, would it be in Equites' interest to look to capitalize on that and have these enhanced capital returns redeployed in newer product going forward. SA continues to present massive opportunity for us. We are continuing to look to allocate capital to obviously high quality real estate.
We are seeing our partners such as Shoprite continuing to look to expand their supply chain, and we are very excited about the prospects of continuing to partner with them in the future and what the next two to five years will bring from that. With TFG, we've seen some exceptional returns already in terms of their operational metrics. I mean it's not a secret that their bash is going from strength to strength, and I think the real estate solution that we provided them in Gauteng has certainly assisted them in that. The ability for them to get product also to store in ever faster times, which is resulting in them being able to execute on sales to the end consumer.
All these positive elements are effectively benefiting the opportunity of creating more real estate for these clients. I think the entry of Amazon into the marketplace in SA is gonna be an interesting one. I think the most important part of it is probably not the fact that Amazon are gonna require X amount of square meters. I think it is that what Amazon are gonna do is gonna focus the minds of everybody that operates in the SA system, and ultimately it's gonna drive a requirement to be able to compete on an even keel with potentially one of the greatest companies in the world when it comes to supply chain. That bodes well for alternative opportunity from an Equites perspective, and we are very excited about that.
We continue to focus on an ever-increasing alternative source of revenue, energy being obviously one of great sort of opportunity, and it's already starting to deliver. The other one being the asset management function. We’ve got a couple of assets in S.A. which are being managed by us, where we have joint venture partners and we are getting some fees from that. We continue to look at those opportunities within the realms of not only our S.A. portfolio, but also our U.K. portfolio. If we can get some of those items done correctly, there is an opportunity for us to create a bit of an asset light strategy, which will result in significant increase to distributable earnings.
I suppose that leads me nicely into the final part of the presentation, which is that we continue to guide our 130-135, but with where we sit today at half year. I think we have the comfort and the visibility to be able to guide that it will be at the upper end of our guidance, that we will be looking to close out financial year 2025. I think on that note, we would like to thank you all for having sort of dialed in and listened to us.
I hope that the presentation has been informative, and it's given you comfort that Equites is in really good shape, that as a management team we are massively optimistic about the years ahead. The ability that the team has shown and the resilience that the team has shown to have come through the last two years in the health that we currently find ourselves in leaves me extremely proud of the team, proud of my co-executive, proud of our board that we've shown the courage of our conviction. We've made some difficult decisions, but we certainly are looking to come out the other side now in great shape. On that note, I wanna thank you all again for having joined us, and I'm gonna hand over.
Leila's got the iPad there with some questions and we'll look to try and answer them to the best of our ability. Thank you.
Thank you very much. We have a flurry of questions, but we don't have that much time. I'm going to choose three or four and then to everyone whose questions has come through, we'll get back to you in the next day or two, either via email and/or setting up calls. Okay, to start, Andrea, I think a strategic question.
Mm.
Matthew from Laurium is asking, "Can you unpack why you're selling more U.K. properties given the fundamentals in the U.K. appear to be improving, and the expectation of further rate cuts in the U.K.?
Ultimately we had identified a couple of properties. We're not selling them all. A couple of properties for sale, and as part of a program, we had to choose certain assets to sell to ensure that our balance sheet remained healthy. It's never a perfect situation. Ultimately, we do need to recycle some of that capital. We have chosen assets in that portfolio that have gone through reversion and will potentially be fairly flat in the process and we are looking to execute at values that potentially in a year's time could be slightly better, but still offer great value from where Equites invested and the total IRR that we will have delivered to the Equites team to the Equites shareholders will be significant nonetheless.
Thank you. Now, I'm condensing a couple of questions between Nazeem, Francois from Anchor. There's basically questions around Basingstoke. There's a question around the carrying value for Basingstoke at 1H 2025, which I'll answer, and then just the capitalized interest and do we expect that the fair values are still or the carrying value is still reflective of the fair value. At the moment we're carrying it at GBP 30 million. We've capitalized just under GBP 1 million for the period on the Basingstoke land. But I think to put that in context, Andrea, where do we see in terms of the second payment and where do we see the fair value of the land?
In terms of fair value of land, we are still significantly below that. We are of the opinion we're going, as I said, to planning before Christmas this year. In the event that planning is unsuccessful, we will certainly appeal it again. We believe that there is headroom in the current valuation as opposed to the unlock of value going forward that will allow us to potentially go through three further planning applications effectively, should that be necessary. We are of the opinion that won't be necessary, and the value will at last be realized. What we can tell you is that should we get planning, the level of interest against that particular development is very high.
Okay. Thank you. Riaan, Nazeem from Investec, you mentioned that the majority of assets of the early acquisition portfolios, reversionary risk is in the base. He's asking, "Are you implying that there's no further risk on the remaining portfolios on long-term leases, or what is our expectation?
Well, thank you for the question. I think it's a very good one. What I'm saying is that obviously, on 10-year leases that were concluded two, three years ago, there may be at the end of the lease period some reversions. But what we've seen over the past five years, several of them, there were no reversion or remained flat, and where there were reversions, other than the properties in the Meadowview and Attacq portfolios from them, the reversions were negligible. I think that's why we wanted to put a perspective on those 16 properties that have now been reviewed, because they were done at an elevated initial yield and 10 years of very high escalations. Obviously, what we're seeing now is that it's very hard to achieve an 8% escalation.
Our escalations, excluding Shoprite, would be around between 6.75% and 7.2%. Also that protects you to excessive risk in that regard. We're confident, having gone through the next six renewals of over the next 18 months, we've also seen there that they're mostly flat, and if there are reversions, they are negligible.
I think this is the last one, and again, I'm combining two questions. Francois from Anchor and Moesha from SBG. Francois is asking, can you please explain the reduction in initial yield of the SA portfolio from 8.1% to 7.89%? I'm gonna deal with that bit, and then I'll hand over to you on the second bit. We've actually disposed of 3 higher yielding assets, and we've transferred a number of higher yielding assets to assets held for sale. And then we've included the Shoprite assets. Just for context, we've said that we are recycling out of the non-core assets, which inevitably would lead us to that initial yield becoming lower on the portfolio.
The inclusion of Shoprite at the 7%-7.5% for Centurion and 7.75% and 7.8% on the remainder, that resulted in the lower initial yields. Moesha is asking, has Shoprite given any indication if they intend to initiate new developments in South Africa with Equites?
I mean, I think it would be presumptuous of us to say that they will do them with Equites, but there's no question that there will be further developments over the next five years with Shoprite. We'd like to think that as a consequence of the Retail Logistics Fund that we have in the JV with them, that the scope and opportunity to put more assets into that joint venture is definitely there. Obviously Shoprite will make the appropriate decision at the appropriate time. We would like to think that we are in the pound seat of potentially being their preferred partner in that. Yeah, it is an important part of our business. I think what's important...
I mean, another question that I know you haven't asked it, but maybe I should throw in there, is that at the moment, if you strip out Shoprite and the non-controlling interests that we have, Shoprite accounts for, I think, just shy of 17% of our portfolio. I think we would probably welcome that number up to about 20%, potentially going slightly above it for a short period of time. I think we would be very comfortable for Shoprite representing that quantum of income for Equites for the foreseeable future.
I think that's all the questions we have time for, unfortunately. We will get back to everyone, in the next day or two. Yeah, thank you for the engagement.
Fantastic. Yeah. Thank you, everybody. Yeah, for those that have scheduled one-on-ones, we look forward to engaging with you in the next couple of weeks. Thank you. Bye-bye.