Can you start from the top of the slide? Okay. No problem. We good to go? Okay. Apologies for that. Can you start from the top of the slide? Okay. No problem. We good to go? Okay. Apologies for that. A few technicals. The beauty of not having to present in front of you, we do get these issues from time to time. Just to start again, distribution for the year at ZAR 141, which is a 5.3% growth year-on-year. The lower end of our guidance of 5%-7%, as we had communicated, the sale of the U.K. portfolio sort of took a little bit longer than anticipated.
Consequence of which is the benefits of that sale will only sort of start filtering through the organization during the course of this year. NAV up slightly. Obviously, we'd like to caveat that with the fact that the South African portfolio performed remarkably well. We had a fantastic re-rating on that portfolio. Obviously, the high quality and caliber of it is finally starting to pay off. The U.K. side, obviously the exchange rate from Feb 25 to Feb 26 was massively against us. Consequently, the U.K. portfolio, the U.K. side of the business, obviously has dragged that NAV down. I'm sure Laila will take you through the detail of that a bit further on.
Loan-to-value at 35.1 as of Feb and obviously substantially lower than that as of today. Portfolio value at ZAR 28.7 billion, likewise, as of today, that portfolio value is slightly lower. Obviously we'll take you through our development expectations over the next 24 months and we'd like to think that we will be back and above those numbers very quickly. The WALE at 13.7 years, probably very little unchanged. I think the U.K. and the S.A. portfolio were very balanced in that. Maybe a little bit lower, but not really that much.
Vacancy at 0.3%, obviously still very low, and the expectation that that particular vacancy, a 5,000 sq m facility up in Johannesburg, is currently under offer and let's see if we can get that let in the next four to six weeks. Very excited about that. Revenue, the revenue stream still come. Obviously our business is hinged on the fact that our revenue streams come from A-listed tenants. That really there's no sign of that changing. Notwithstanding the sale of the U.K. portfolio, that will still remain very much in that target range.
The S.A. all-in cost of debt obviously has come down very nicely during the course of this year, and Warren will take you through that in the treasury, the treasury piece. Really where the cycle is, Equites from sort of late 2022 into 2023 went through a massive asset recycling process. Some S.A. assets were sold on to optimize the balance sheet. Obviously now with the sale of the Springbok or Aviva portfolio, that even more so.
The positive thing is obviously is that we are as busy as we've ever been in the 12 years since we listed. Consequently, we'd like to think that we will be deploying a significant portion of that capital in the very much the short term rather than the medium term. South Africa now remains the engine of our growth and value creation and we are extremely optimistic based on the current level of activity that we are currently involved in. The business, where are we? Obviously, we are one step closer to completing our U.K. exit. I think a very big step closer, and we'll talk a little bit more detail in terms of where we are with everything. The South African deployment obviously keeps on growing.
We had a 2023 and a 2024 where we had in excess of ZAR 2 billion of developments. I think this financial year that's just gone by has been a little bit a bit slower, almost a reassessment of our position and the year ahead, and in fact the year thereafter already looks like it's going to be bumper years. Very excited about that. Obviously the capital structure of the balance sheet is looking fantastic. Loan to value is where we want it, so it gives us lots of leeway to be able to carry on growing the business. Cost of debt is below our yields.
Obviously, we have very good liquidity in terms of availability of those funds to basically deliver on our pipeline. At the same time, we've got an incredible hedging position and policy in place, but respecting that policy and implementing it is a job that obviously has been ably done by Warren and his team he will talk you through that as well a bit later on in the presentation. Where are we in the U.K.? During the period, I suppose the start was the sale of DPD Burgess Hill that was sold to an institutional buyer during the course of the financial year. We are out of that.
Goldthorpe, which is third on the list, that has been signed and transferred to the Newlands team. Obviously the Aviva portfolio has also been sold now to an institutional buyer. What does that leave? It leaves four more pillars to the Equites pipeline in the U.K. I just wanted to give you a quick update in terms of where we are. Let's start with Coton Park. Coton Park is currently being developed for JD.com, and everything is on schedule to be complete in September. In terms of our agreements, we should be paid out within two weeks of PC of that particular development. Nothing really negative or positive. Everything's on schedule in terms of that happening.
Thrapston, Newlands have got their option in place to draw down that land from us. They have already indicated that they are going to trigger that option. We're still awaiting a final trigger day. Our expectation is it potentially could be sort of late June, early July. Obviously there are a few issues around the drawdown on that which are not in Equites' control. We remain positive that that will happen, as we do know that the Newlands team do have deals on that land pending. They are very eager to draw down and the issues are actually not in their control either.
The final part of what I think will probably also reach its conclusion during the course of this calendar year is the DHL in Leeds. That is currently in arbitration with DHL on the rent review from last year. We'd like to think that that will probably be settled within the next four to six weeks. When it is, and we do have that new base on the rental, we will then be in a position to put that particular piece of property onto the market. The expectation is that we will probably find a suitable buyer for it at a suitable price, I would say again, also before the end of the calendar year. The final piece of the jigsaw in the U.K. obviously is Basingstoke.
We, as you are all aware, we do have planning consent and everything's in place to go. We are currently at an advanced stage with two users for that particular site, which will require us to submit new planning applications for the detail of what they are requiring, as it is different to what the approval was. That process hopefully will follow through during the course of this year. We've got heads of terms agreed with one of the users. We just need to sign them and then get that process going. Our expectation is that all, if everything goes according to plan, we should be in a position to start exchanging during the first half of 2027.
Now, realistically speaking, for us to get through the whole of Basingstoke in terms of developing it, again, not to own any of it in terms of doing freeholds or doing pre-lets where we would onsale the pre-let to institutional investors, our expectation is that we will probably be involved in Basingstoke till probably the back end of calendar 2028. Consequence of which is that executing on all this, that deal flow will result in us effectively bringing that to full cycle, but obviously with a bit of profit on it as well, which obviously is very exciting, after the eight years of trying to get the planning consent approved.
I think big question and we thought it would be opportune to really put this slide in as well, in terms of what's gonna happen with this windfall of cash that has sort of entered our bank account in the last few days. Really, we've had to take certain things into consideration. Firstly, the fact that we have got a 35% loan-to-value. We are already in a fairly positive stance in terms of balance sheet. We have obviously quite a few facilities in place which we do not wanna cancel because we know our pipeline is gonna be significant over the next few years.
Consequence of which is within those facilities, some of them do have the ability to place the funds into sort of an access facility. Over and above that, there are certain facilities that are coming to their end during the course of this financial year. The intention would be to repay those. Then we need to balance obviously, our position in the DCM market. We've established a twice annual auction, and we really do not want to be removing ourselves from that, those calendar events. We will continue to operate in that, and Warren will take you through that a little bit later.
In terms of the pipeline over the next 36 months, you know, we are of the opinion that there is the possibility that we could be deploying anywhere between ZAR 4 billion and ZAR 6 billion in South Africa, as far as what the pipeline outlook currently looks like. In terms of acquisitions, I mean, we're constantly looking. Obviously, we have a very high threshold criteria in terms of the product that we would like to buy. What we find is a lot of people that own product that we would like to buy probably are not sellers.
Where they potentially do become sellers, the process has become quite competitive and pricing can sometimes get to a point where potentially Equites would not be prepared to play. Notwithstanding that, we continue to look, and we continue to engage with the market and, yeah, we've got nothing to report at the moment, but obviously there are from time to time opportunities do arise. In terms of share buybacks, at current share price, obviously, probably not the best use of our capital.
Subject to the vagaries of the market, you know, we are in a position now, a very liquid position, where we can execute on share buybacks as and when we feel the purchase price of those shares is acceptable to us. Effectively within the process of what we do with this windfall of capital, we do have to be mindful of the fact that 75% of our income needs to be property-based income to retain and satisfy the REIT status. The consequence of which is that we've had to think long and hard as to where we will place that money in the short term, and we will be investing in some U.K. equities in the property space.
The key elements in terms of the decision-making around where we will be putting that capital obviously relies on whatever equity we do purchase to have a high liquidity threshold. What we will do is also we will place some downside protection on that capital over the period. Our expectation is that that money will start being drawn down through the system probably within 12 to 18 months in terms of our requirement of it. That being said, you know, we will manage that process through the treasury department internally.
In terms of development update, obviously, the year that's been, what we've won and what we are completing, a total of about 160,000 sq m of GLA. I mean, Tiger Brands obviously being the real cherry on the cake, if we like. I mean, obviously it was a process that took 18 months and obviously extremely pleased to have been selected by the client. We can tell you that obviously the bulk earthworks are underway and almost more than halfway complete, and the main contractor has been appointed and will be on site towards the end of May.
In terms of other prelets, obviously we've got the DHL in Boksburg, which we will hopefully start demolition in June of an existing structure. Then that will result in a building coming up with a completion of May 2027. Over and above that, we've got the Meadowview spec building, which came on stream in April. That currently is basically showing significant interest. One client in particular is really circling around it, and we hope to have that let soon. In Jet Park, we have two buildings coming out of the ground there, one of 10 and one of 7,500 sq m. Both of them are basically included in RFP rounds with clients.
The completion dates on those are effectively towards the back end of August this year. We still very optimistic that they could be prelet prior to completion. In terms of Extension 102, we have that particular site under offer, subject to the third-party logistics organization winning a tender. We know they are one of two on that tender, and should they win that tender then hopefully that deal becomes consummated. Very excited there. The final part of the jigsaw obviously is Premier. We're doing an extension to their existing facility, and that will take them up to a bit about 38,000 sq m in total.
Obviously, as you're probably all aware, Premier FMCG acquired Rhodes Food Group and the consequence of which is that they would require a bit more space for their central distribution facility. We also engaged with SPAR on a deal up in the Eastern Cape in Gqeberha, and that really is a stepping stone to relationship building. Notwithstanding, you know, the press that SPAR is getting at the moment and the difficulties, we are still very optimistic that they are a serious player in the supermarket space, and we hope to be doing some really good business with them in the next three to five years.
Very excited about creating those relationships there and obviously feeding into what is to come. In terms of the RFPs that we're currently involved in, we are basically involved in RFPs to the value of about 170,000 sq m, which would be approximately ZAR 2.3 billion-ZAR 2.4 billion worth of property. We are basically in all of those RFPs, one of two in every single one. Very excited about our prospects there and hopefully in October we will be able to present a few wins there. We remain highly optimistic about that. Just thought we'd spend a bit of time rather than sort of talk about the state of the S.A. market in general, which we normally do.
We thought we'd really spend a bit of time in terms of Riverfields and what it's become, I suppose. I mean, we have the benefit of a farmer who effectively owned massive tracts of lands on the R21 and was able to start a process of getting land rezoned probably about 15 years ago. That process was approved and we have the JT Ross Property Group to thank for having taken that site from basically a mielie field to becoming the stepping stone of what it's become today.
I think the point I am trying to make here, and I think one of the key factors that has allowed this particular site to reach the position of preeminence that it has today, I think is really related to the fact that the developer farmer that started the process of getting the land rezoned had a massive vision for the area. The infrastructure that the Erasmus and Laudes, who is the leader of the crew there, the vision that Laudes had to put in a road infrastructure which would meet the level of growth that the area has seen.
I think if you were to add up all of the developments in this area and what's coming, I think you wouldn't be far short of probably 2 million sq m- 2.5 million sq m of space. If ever any of you are in the area and you drive around, even at peak traffic hour, you would never realize that you were in an area with that level of logistics engagement. I think it's testimony to what an incredible vision that the Erasmus family had in terms of creating this area. We've obviously jumped on the bandwagon. As I said, the JT Ross organization were first here.
We've followed and obviously have followed extremely well, and obviously own all the parts that you see on the screen there that are in yellow, including the purple pieces on the right, which is land which we are looking to execute on. You can see where Tiger Brands will be going. We hope to be announcing within the next six to eight months a few more deals on those purple pieces of land. I think the point I'm trying to make is that we are the beneficiaries of being involved on land, which I think I can comfortably say, has created the most preeminent logistics precinct, I think, in South Africa.
You can see it by the names of the tenants on those buildings, and the names of tenants that will be coming further down the line. In terms of obviously the big win for us is Tiger Brands. Purpose- built DC. It's gonna have a cross-dock process facility to it. There's gonna be a returns processing and aerosol storage. The aerosol storage obviously is almost like a hazard store. As obviously if something were to go off there, it would be pretty dramatic. I think what's key here is that Tiger Brands made the decision that they wanted to consolidate several Gauteng-based distribution centers into one facility.
The consequence of which is that the level of logistics involved in getting product to client is massively reduced. The industrial engineers reports that we received on creating this facility talk to a massive saving over the 10-year lease period for Tiger Brands just in diesel alone, never mind all the other operational efficiencies that come to bear by having everything under one roof. The consequence of it also allows Tiger Brands to have a much stronger inventory resilience. What does that mean?
It means that their ability to fulfill an order from the various clients that they have, from the Shoprites, the Pick n Pay, the SPARs, their ability to fulfill an order to 100%, basically results in then the retailer then having the product in stock all the time. And consequently, the availability factor on shelf in stores, and online for that matter, basically starts hitting north of 90% and hopefully approaching 100%. I don't think we ever get to 100%, but the consequence of that is that sales normally do go through the roof also. I think we spoke on the previous slide in terms of all the quality of tenants.
I think really what it talks to, you can see it's the fact that Shoprite came to the area as well and the sheer scale of the whole area, that then obviously puts the question mark into the Tiger Brands decision-making process of where should we be. I think the success of the first deal brings the second deal, which potentially brings the third, and so on. It almost becomes a domino effect, and we're starting to see that by the level of interaction and engagement we're having in this area.
And the precinct obviously then attracts the complementary nature of the various organizations that basically feed each other and consequently also reduce each other's operating logistics costs as well, which obviously is what Equites has been trying to sell into the market for the last 12 years. That traction and that belief in the system is only getting stronger and stronger. I'm gonna hand over to Riaan now, who's gonna take us through the portfolio operations and the highlights of the previous financial year on the ground.
Thank you, Andrea. I think on screen we see the outstanding operating metric, which confirms the impeccable Property fundamentals of our portfolio. We've been going for 12 years, and consistently over the 12-year period, we've had near insignificant vacancy levels. To put the 0.3% vacancy in perspective, we've got under management 1.6 million sq m. There are probably many reasons why we continue to attract and retain high-quality tenants. Two of the most important, in my view, would be the quality of our buildings, modern logistics facilities that's really future-proof. Secondly, they are located in very strategically located logistic nodes in secure parks that makes them very desirable locations for tenants that specialize in this sector.
This slide confirms that our portfolio at the end of Feb 2026 were to the value of ZAR 28.7 billion. We have 59 South African facilities locally and, over the period, we continue to attract new clients and Our focus remain on developing and building the portfolio based on pre-let engagements as well as a very measured speculative program. Only 1% of our portfolio is consisting of land at the moment. We continue to look at strategic nodes with well-located land which have been zoned and, we're looking to build a further land bank to cope with the demand we've got for our facilities. Over the period, you'll see that our portfolio grew from ZAR 27.7 billion- ZAR 28.7 billion.
We've had a healthy ZAR 1 billion uplift in value over the period. We acquired ZAR 146 million of land in the Riverfields area. As Andrea noted, we also started a relationship with SPAR in Gqeberha area, where we acquired a facility for them. In the area, we had disposal of some non-core S.A. assets as well as the DPD Burgess Hill facility. Importantly, the weighted average net initial yield of our portfolio is 8% and importantly, if you exclude the Shoprite assets held in the RLF joint venture, the net initial yield is 8.3%. The upcoming renewals in our portfolio is always a topic of interest. Interestingly, at the year-end, we only had a further 47,000 sq m of facilities up for renewal during the current financial year.
That's made up of four leases, of which three we're busy trying to renew, and it's well advanced. One facility which have become too small for the tenant will be moving out in the second half of this calendar year, and we are well placed to replace them. Importantly, two of the renewals are located at Lordsview. Those were leases that were concluded in the COVID years at below-market rental levels, so we're expecting a healthy positive reversion on those ones. We continue to deploy capital in our strategic nodes. Riverfields, if you look at the breakdown of our various nodes, you'll see at the moment that Riverfields make up 24% of our portfolio with a WALE of 9.2 years.
That's going to grow significantly, firstly, with the coming on stream of the Tiger Brands facilities, and also we've got two further RFPs that are well advanced. We expect our exposure to the Riverfields node to increase significantly over the coming years. You'll see that the Western Cape is still a significant part of our portfolio, especially with the two significant Shoprite facilities in Brackenfell. It consists of, at the moment, of 25% of our portfolio. As you can see, there's a healthy distribution between various nodes and we hope to be building on that in the future. The year it's just been that just ended end of February, we saw nine leases signed during the past financial year. Two of them were new leases and seven of them were renewals.
The renewals made up about 80,000 sq m of facilities. You'll see that the weighted average lease expiry profile of the U.K. and South Africa is identical. We obviously always reward tenants that are willing to conclude long-term leases with us. It also there where we may be more lenient with our escalation profiles because obviously the certainty that it gives us to have a 15 or 20-year lease just makes it so much easier for us to plan. You'll see from a tenant concentration point of view, Shoprite is a significant partner of ours. We are very pleased with the relationship and we hope to be building that further. Then DSV, TFG, and Imperial Logistics are also significant players in the South African market.
Obviously, Tiger Brands will also now come in as one of our major tenants, and the top 10 tenants make up 77% of our portfolio. That's it from me, and I hand over to Laila. Thank you.
Thank you, Riaan. Let's start off by, I think Andrea did touch on this right up front, where we are at in terms of distribution per share, ZAR 1.4101, this is growth of 5.3% over the prior year. This is in line with our guidance, again, our guidance was a range of 5%-7%, that was predicated on the timing and deployment of the Aviva proceeds, which has only happened subsequent to year-end. In our guidance, at the lower end of that guidance.
Our NAV per share, ZAR 1,669, this is a growth of 1.2% from Feb 25. We'll break that down a little bit in the NAV bridge, which will take you through some of those movements which resulted in the NAV per share ending up where it did. Our loan-to-value at 35.1%. It feels like some of these numbers are slightly outdated because the Aviva portfolio concluded, or the disposal of the Aviva portfolio concluded yesterday. We'll talk about where this loan-to-value is and how comfortable we are with where it will go given the Aviva proceeds. Our ICR of 2.9.
A few years ago, that ICR was around 2.1, 2.2, and really, as we have seen developments come online and become income producing, that ICR has increased significantly, and we're very well positioned to implement our growing development pipeline. If we just move on to a snapshot of our statement of financial position, I think where we have to start, and the most important element of our business, is obviously our property portfolio. We've lumped together those three lines on the top, the investment property, properties held for sale, and trading properties. If you look at them combined, the total value is ZAR 28.7 billion in FY 2026 compared to ZAR 27.7 billion in FY 2025.
The reason for that is there has been some development spend, some acquisition spend, and that was offset by disposals during the period. We sold one asset in the U.K., DPD Burgess Hill. We sold some land parcels in the U.K., and then we sold some non-core assets in South Africa. Overall, the main change is really that we've had a large movement from investment property to investment properties held for sale at 28 Feb, and the majority of that sat in that Aviva portfolio, which has transferred subsequent to year-end. If you look at trading property, we just have to break down what sits in that trading property. At year-end, so at Feb 26, we had Basingstoke and we had Goldthorpe. Goldthorpe has subsequently transferred to Newlands, and all we have left is the Basingstoke land parcel, which Andrea touched on earlier.
If we look at liquidity, our cash balance at year-end is slightly higher than it was in the prior year, but this is as a result of us being long cash for the majority of the year. We had taken advantage of some very well-priced debt in the market, and that was held as cash reserves. Warren will talk a little bit about how we managed our cash over the period. Again, just to highlight that the cash facilities of ZAR 2 billion plus available facilities of ZAR 1 billion gives us ZAR 3.1 billion in cash and undrawn facilities, which means that we're incredibly well-placed to execute that development pipeline, which we know is imminent. Debt management.
If you look at the loans and borrowings, it's increased slightly year- on- year, but we expect to manage this going forward with the deployment or how we bring back the Aviva proceeds and as we look to settle debt facilities as they come up for renewal. Again, Warren will talk to that a little bit just in terms of how we manage the tenor of debt alongside the cost of debt. If we look at equity, we did share buybacks in the beginning of the year, and then we issued shares in the second half of the year, and I'll touch on that a little bit more because I think it's testament to how we managed our capital structure efficiently over the period.
Okay, if we look at the distribution statement, if you just look at the top line and net property related income, this was supported predominantly by like-for-like rental increases of 5.4%, and it was supplemented by new developments coming online during the period. We had developments at Riverfields, Wells Estate, and Meadowview, which have come online, which have bolstered that net property related income. Admin expenses. Last year, we spoke quite a bit about this admin expense line, and we said that there would be a reduction as a result of the U.K. admin expenses winding down. Where we're at right now is 110, and this is sort of where we expect it to be. This is the expected run rate on admin expenses.
It may come down slightly as we wind down completely the U.K. operations, but very comfortable with where we are in terms of our admin costs going forward. If you look at the finance cost, I think it's worth just pausing because we had a slight increase in our finance, in our debt balances. However, if you look at the gross finance cost, that number's actually come down year-on-year, and that's purely as a result of exceptional treasury management and managing the margin on new debt. Again, Warren will talk through this, but I think it's important to highlight that we've been incredibly successful at managing the margin on new debt coming online. The other element is that there was a large element of finance income for the period.
Now, finance income is not only interest earned on cash balances, which we were long cash for the period, but it also relates to interest income on interest rate swaps over the period. The last element is there was a reduction in capitalized interest over the period. Interest capitalized reduced from ZAR 335 million in FY 2025 to ZAR 188 million in FY 2026. Again, this is just a much cleaner base in terms of going forward. Where we expect interest to still be capitalized going forward is on developments, and as we all know, we recover that through rental income as soon as those developments are concluded. I just have to point out that the NCI adjustment in this period is significantly more skewed just towards Retail Logistics Fund and PIP.
Again, looking at these numbers, and we always get questions from analysts, the Newlands element of NCI is largely winding down out of the system, and the majority of this NCI allocation relates to the joint venture with EPPF and with Shoprite. Just in terms of the number of shares outstanding, I've spoken to this before, but just looking at the decrease in number of shares as a result of the buybacks but then the increase as a result of the share issuance, which we did in December. We look at the distribution bridge, I think I just wanted to point out some high-level elements. You look at the largest contributors to the growth in distribution per share, it really is the highest quality ones.
You look at the S.A. and U.K. like-for-like rental income, that was the highest contributor to the growth in distribution per share. Ultimately, that's what underpins our business. It's the growth in rental income year-over-year. Further to that, the tightening in debt costs really show that we managed to efficiently manage our cost of debt and our capital structure, which resulted in ZAR 0.0496 growth in that distribution per share. Overall, looking at rental income and tightening in debt costs, I think that is testament to how we've managed the business really well over the period.
You look at the detractors from distribution per share, it's development dilution and some vacancies, then the E&GL write-down, which we're still feeling the impact of because transferring elements like Goldthorpe, Coton Park, there were some costs which had to be written off, and those were detractors to the growth in distribution per share. Again, those are generally once-off items, and now they're embedded in the base, and we look forward to having this distribution bridge being a lot cleaner going forward. We look at the NAV per share, really two elements that we want to highlight in terms of the movement in NAV per share. We started the year at ZAR 16.49, and we had probably the most successful year in terms of valuation uplifts ever in the South African portfolio.
6.7% like for like increases in the valuation, in the valuation of the S.A. portfolio, ZAR 1 billion, which we recognized, and this was driven largely by underlying market rental growth, which is now being captured in those valuations. A significant performance of the S.A. valuations in terms of the overall valuation performance. The largest detractor is the FX for the period. If you recall, in FY 2024 we made the decision to close out all our cross-currency swaps, and in doing that, we made investors aware that we would be providing exposure to that underlying hard currency. In good years, where the rand depreciated, invested would have ultimate exposure to that depreciation. In the current year, we had almost ZAR 2 of strengthening in the rand, and that resulted in ZAR 0.60 reduction in the NAV as a result of that FX.
If we look at where we are right now, we're back to ZAR 22.30, and we've written back some of that, but obviously we're judged at a point in time, and that's really where that FX loss has come through and impacted the NAV per share. If you look at the U.K. developer, that's costs which we've incurred on Newport Pagnell and Coton Park, which we've had to write off. Those are capital in nature, but from a NAV per share, they do impact us, and that's where we see the ZAR 0.11 detraction in NAV per share. There were some other movements as a result of disposals during the period. The last one is just again to point out that we did those share buybacks when the share price was low.
We did ZAR 137 million of share buybacks at an average price of ZAR 13.82, then we did an accelerated bookbuild. We raised ZAR 712 million at a share price of ZAR 17.25. Again, just efficient and disciplined capital allocation in terms of managing the overall capital structure, that brings us to our NAV per share of ZAR 16.69 at FY 2026. I think my last slide is just the LTV bridge, again, this is somewhat outdated, but we report at FY 2026, we look at the movements for the period. The buybacks, those increased our LTV by 0.5%. We had the equity raise, which was accretive to NAV and reduced our LTV by 2.5%. There were some S.A. and U.K. disposals, which again reduced the LTV.
Some developments for the period, which increased the LTV by 2.5%. The valuation uplifts and some FX brings us to the loan-to-value at FY 2026, which was 35.1%. We include the proceeds, the net proceeds of the Aviva disposal, and we look at where that takes us to now as a pro forma LTV, that reduces the LTV to about 25%. In overall terms, we're very well positioned, very happy with our balance sheet, and the strength that we have to execute on that development pipeline going forward. I'm now gonna hand over to Warren to take us through treasury and funding and an exceptional job done over the period.
Thank you, Laila. It's important to bear in mind the context before I go into the treasury metrics here. That is that our investors, both on the equity and debt sides, understand Equites as a business. They understand the high quality of the product that we develop. They understand the high quality of the tenants that we have and those long-dated leases, and that's the context to bear in mind as we look at these numbers. First, first of all, we've spoken about the cash and available facilities, ZAR 2.1 billion of cash that we had at year-end, as well as another ZAR 1 billion of facilities. Laila mentioned our interest coverage ratio of 2.9, and ICR does have a significant lag factor. It's 12-month backward-looking, and we forecast that to go up to sort of the mid-3s.
As the development pipeline plays out over the next 24 months, we've got that significant headroom to allow us to do that development spend before those become revenue generating. I'm gonna go into more detail in a couple of slides later on about the cost of funding, but let's just touch on that weighted average debt maturity of 2.9 years. Ideally, we try to keep that above three. As my colleagues have mentioned, with the disposal of the Aviva portfolio, the proceeds coming back, what we've allowed is for some of those debt facilities to scroll down to maturity. Some of those are maturing over the next 12 months, which we'll be able to repay, and hence that debt maturity sitting just under three years. We expect that to be significantly above three going forward.
In terms of our hedge ratio, the last two years have seen significant geopolitical turmoil, a lot of uncertainty in markets, be that from a monetary policy perspective, from an inflation perspective. We are adamant about providing certainty to our investors. We sit well above 80% in terms of debt hedged. In terms of sensitivity to rates, that 32% indicates that if there was 100 basis point or 1% increase in interest rates, we would incur a 32 basis point increase in our cost of debt. In terms of our credit rating, we rate a double A-minus by GCR, I want to touch on that as we go through some slides a little bit later on. In the top right-hand corner, there's a funding mix, and that is It shows a diversification of where we source our funding from.
The domestic medium-term note programme is our JSE-listed debt. Just under ZAR 5.5 billion is sourced from that avenue. S.A. Banks, ZAR 4.5 billion is what is drawn. We have a further ZAR 1 billion of facilities. Just more than half of our S.A. debt is from S.A. Banks bilateral facilities. The Aviva debt is being transferred with the sale of that portfolio, so that'll disappear. Then the cash and undrawn facilities, we've got ZAR 2.1 billion of cash, as I said, and a further ZAR 1 billion of facilities available there for us to draw down on. In the bottom right-hand side, you can see the We can ignore the bottom blue one, that's the U.K. That'll disappear with the sale of Aviva.
The top section in the red shows our cost of debt, that's come down from 9.1% in Feb 2024. That dropped 0.5% through to Feb 2025, a further 0.5% to Feb 2026, we're sitting at that 8.1% now. This is indicative of why we have been able to bring that cost of debt down. Yes, reference rates have come down a bit. We've been in that in the debt capital markets for around about five, six years now, and you can see that compression. The different colored dots indicate the maturity of the listed debt we've raised on the JSE. You can see in the last 6 months, between August and February, we raised five month debt.
We managed to do that at 108 basis points over JIBAR, which was less than the cost of the debt we raised in a three-year note, less than 12 months previously. Laila referred to the one-year debt that we also raised. You can see that that is at a very low level. This graph here is a little complex, so I'm gonna take my time just to talk through it. We have presented it before. There's a number of chart bars and groupings here. Each of those groupings represent a six-month period. The light-colored bars, the light gray-colored bars, represent the debt that's matured in that six-month period, and the blue bars indicate the new debt that we've issued.
The little red and green boxes indicate the cost of debt or the spread over three-month JIBAR. The red is that, the spread over three-month JIBAR of the debt that matured, and the green is the level at which new debt was issued. You can see across all those periods, if you look at the tenor starting from the left-hand side, the tenor was 2.9 years of debt that matured through to 3.7 years of the new, the weighted average tenor of debt that was issued. If we look at the second half of 2026, same type of picture. The debt that matured, 2.7 years. New debt we issued at a weighted average of 3.5 years. Then we've been able to bring that spread down, so we've seen a significant spread compression.
The one exception is the first half of 2026, and I say it's an exception because we're not comparing like with like there, in that it was a 5.5-year, ZAR 200 million note that matured at ZAR 165. We issued a short term or one-year, ZAR 1.2 billion note at JIBAR plus 83. That's not really comparing like for like, but for the other four periods that are illustrated there, you can compare those and that is indicative of how we've been able to compress that cost of debt, and that all feeds through into the ability to develop and be profitable on those developments that we have been, and it augurs well for our development pipeline over the next 24 years. Sorry, over the next 24 months.
Over to you, Andre.
Thank you, Warren. Yeah, God willing, it will be for the next 24 years.
Yeah.
On sustainability, quick note, obviously very, very, very key metric in the Equites proposal. You know, every new build that we put, we put to clients, comes with an advanced EDGE certification. We currently have 60% of the portfolio effectively EDGE certified, and that really talks to almost 1 million square meters. The addition of the further, let's say 300, potentially 300,000, 350,000 square meters of space coming in the next 24 months, will all obviously be EDGE certified. We've spoken over the last sort of, I suppose 12 to 18 months about the water issue specifically in the Gauteng region. As a consequence of that, we have started a process of looking to recycle as much water.
We have finally got approval on our first recycling plant at Riverfields and that is currently being implemented. The consequence of which is 75% of the water usage on in the facilities in that particular park, we will be able to recycle that water. We're not recycling obviously to potable standard, so that will only then be recycled into flushing, into truck washes and also irrigation for the landscaping, which has become commonplace in these beautiful environments, logistic park environments that we have.
The level of data monitoring that we have, and the advent obviously of AI and what that will bring over the next 18 to 24 months and our ability to manage all of these points, with smart metering and being able to control everything obviously becomes absolutely key to not wasting water and also advising clients where water is not being used appropriately. In terms of the social and the governance, we obviously are really pleased to have retained our Level 2 BEE rating. We've got 78% verified Black ownership, and within the realms of a small team at Equites of 48 employees, we are 71% effectively Black employees.
I think as an organization, within the realms of all of our sustainability stuff and our governance and our social impact, I think we are really, really well pleased and well-placed and obviously the board and the executive team are obviously very, very pleased with current status there. I think to close off, and before I get to prospects, I do believe we had a few problems at the beginning of the presentation. I do believe that the highlights were adequately addressed by the various parties, by Laila, Riaan, and Warren during the presentation, so I won't bore you with going back to them. I think we will look to conclude with the prospects.
We, we retain the belief that our distributable share for the guidance that we give for the year ahead, is again 5%- 7%. The range obviously is now reflective of the Aviva monies being in, and how we invest those monies to create enhanced earnings for the organization. Ultimately everything is anchored by the long WALE, the limited amount of lease renegotiation that Riaan and his team are gonna undertake this year, and the belief that the reversions in those negotiations will be muted and in some instances will be positive.
The final part of the jigsaw obviously is the capital deployment, and that really is talks to U.K. money being drip fed back into the S.A. system and being drawn down through our development pipeline. As I said earlier, we're constantly looking for buying opportunities. There are very few that are able to meet our metrics, from time to time they do come along, and normally when they do come along, they are sizable. Obviously we are in a very healthy balance sheet position to execute on those things. All in all, really positive base, really positive outlook and very excited for the year ahead. Not just the year ahead, actually, the next two or three years ahead.
Everything seems to be falling back into place, and we can only control what we can control. Over and above that, what happens in the broader world, we can only manage what we can manage. All positive there. I think that really leads us into the final element, which is a few questions, we would be happy to reply to them. I'm gonna defer to Laila now. She's got the iPad with the various questions there.
We've got a lot of questions, which obviously means that people are very excited about the results. I'm gonna try and group them together, just as a quick disclaimer, if we don't get to any of them, please email us. We're always available to answer your questions, particularly the more technical ones. Just put them in an email and we'll come back to you. Let's maybe start with, there's a question, actually a couple, Moisho, Nazeem, on what is the impact of the Iran war on some of our tenants? With fuel price increases, are we seeing our tenants being affected by it? Particularly on something like the new Tiger Brands deal, how would they be affected by this?
Well, I think the greatest effect to them will be diesel prices, no question. Keeping their fleets on the road, keeping factories in production. In some instances, obviously, raw materials that are all linked to oil, the various plastics, the various packaging material. I'm sure that that will slowly filter through the system. That being said, I do believe that there are still 60 million people that need to be fed in this country. That whilst the results may be some pricing inflation, which I think is, I suppose, expected across the board, it doesn't detract from the decision that has been made to basically optimize their business.
In fact, if anything, it emphasizes the absolute need to be working and operating out of a 22nd century building in terms of creating those efficiencies. You know, I think if I can take it one step further on the Tiger Brands thing, I mean, the question obviously will also be around pricing on the various materials that go into the construction phase. For the time being, we haven't seen significant increase in pricing in anything. For Tiger Brands, what I can tell you is that we are very closed to closing out the steel contract on there, which is obviously a massive portion of that build and will have a big bearing on the final cost.
Our expectation is that there potentially will be some construction inflation coming through the system, but it hasn't come through yet.
Okay. Thank you. Another question just on, I think there's some questions on the Aviva disposal itself. Maybe I'll just take these. There was a question around tax, and there was some deferred tax liabilities. Will that effectively come through? Will that actually be taken off the proceeds? No, because we sold it as a corporate transaction, there won't be any impact of those. They, you know, simply pass on to the buyer. No impact, no tax impact. The proceeds which you saw in the SENS yesterday, those are the net proceeds that will effectively have effectively flown to, yeah, been passed on to Equites now. Rian, I think this is a question for you.
Just in terms of the leases that were renegotiated and our expectations for leases in the upcoming year, where do we see them being renewed relative to market?
Thank you, Laila. I think where we had renewals of leases that came off a 10-year period, specifically in the Meadowview and Waterfall areas, we have seen some significant reversions. Overall, we've seen the last three, four years, the underlying rental growth is between 4.5% and 5.5%. Ultimately, those leases escalated between 6% and 8%. There we saw negative reversions. However, all of them have now been dealt with. Going forward, the leases that are coming up for review are leases that were concluded either on a five-year term in the early 2020s or coming off a 10-year lease concluded by Equites in the late 2016 to 2018. The significant impact of the reversions, I think, are behind us.
With the latest two, three-year rental growth that we've seen, we think that the impact will start to be mooted.
Okay. There's a question on the rationale to buy listed equities in the U.K. How long do we expect to hold this, and, you know, what is our rationale?
I mean, obviously the rationale is intrinsically linked to our income having to be 75% from property related. Unfortunately, for us to bring back that money and just put it on money market would result in us falling foul of that, and consequently, we needed to find places to put that money in a way that we could create property income. Obviously we didn't want to go from a less liquid source like the Aviva portfolio into another property transaction in the U.K., or as a consequence of the South African pipeline being development linked rather than acquisition linked. Obviously, if an acquisition were to come about, we'd be more than happy to bring the money back to transact for that. Ultimately, we had to be mindful of not losing our REIT status.
As a consequence, the idea is to deploy that capital into U.K. equities that have got enough liquidity that give us the ability to trade in and out at will. Ultimately, that really remains the fundamental part. You know, the criteria that we will look to implement those deployments will be very much linked to markets that we understand. The U.K. market we understand. It will be the industrial market that we understand. Consequently, it will be management teams that we know and have ability to basically interact with should it be necessary.
We believe it's a probably, let's say 12-24 months, but with probably the majority of the money probably coming back in the 12-18 month period. The deployment will be immediate. Repatriation won't be immediate. It will be, it will be stepped as and when we need. As you can imagine, we won't need the full quantum of the money on one particular day. We will need it piecemeal, and we will be looking to take advantage of moments in time where either the rand is trading particularly badly or a share price in one of the counters that we have invested in is trading particularly well.
That really is. Ultimately, we are going to be putting in a hedge to protect the downside on those equities as well. We are very mindful that we do not want to put ourselves in a position where we burn away a ridiculous amount of capital should something out of our control or cataclysmic happen in terms of the world.
Last question. I know we're out of time, but I think this one's quite an interesting one. Talk us through the equity raise in H2. If we were confident that the Aviva transaction was happening, why did we proceed with that equity raise?
Just to maybe give some context on the Aviva transaction, we started that transaction in May last year. We closed it in May this year. You can imagine, the process was not a simple process. It took time. We wanted to achieve certain pricing. We needed to find a suitable suitor. Ultimately, we had a deal with a party which unfortunately fell out of bed sort of towards mid-October last year. We re-engaged with a new party who gave us an unsolicited offer basically at the beginning of this year. We had a significant pipeline which we knew was coming our way.
The share price behaved in a way which gave us an opportunity to raise capital, which ensured that even if the Aviva portfolio transaction were not to happen in the next six to eight months, post that capital raise, we knew that we had sufficient capital to continue to transact in the development market without putting our balance sheet under any pressure. Ultimately, it's all fine and well having the crystal ball today knowing that we're gonna do the deal, the reality is, until that money was in the bank, there was no deal. The rationale to do that capital raise in September basically stacked up, not 100%, probably 200%. Very pleased with that capital raise.
What it did is it gave us the tranquility to be able to also engage with the buyer in the U.K. in a position of confidence rather than a position of need or desperation. That really sums up, I suppose where Equites is at the moment. We are in a position where we are able to transact with potential tenants in a way where we're selling the opportunity to come into 21st century logistics, enhance operational efficiencies, and have the balance sheet to be able to deliver on sizable opportunities and coupled with that, obviously, have the ability to draw down on further land as and when it is required to meet the various opportunities that may come our way.
I think that's it.
Awesome.
For the rest of the questions, we will either respond via email, or if you have any further questions, please feel free to reach out to us.
Fantastic. Thank you, Laila. Thank you, Riaan. Thank you, Warren. Yeah, thank you, everybody. We look forward to some of the institutional shareholders. We will be seeing you in the next couple of weeks and look forward to the one-on-one engagements. For our retail shareholders that are out there, we trust that you're pleased with the outcome of where the business is going and obviously the optimism that the management team has for the future is very high and we hope to continue to deliver on the promise that we have been making to you even through some of the 2023 and 2024 years where the markets were significantly more difficult for Equites. Yeah, we remain very optimistic for the future.
Thank you and all the best. Cheers.