Equites posts 20% drop in half-year distribution

Specialist logistics property group Equites on Tuesday reported a 20% drop in its half-year distribution to shareholders, which it has partly blamed on higher interest rates.

The group announced a distribution of 65.37 cents per share for its half-year ended August 31, down from 81.58 cents a year earlier, and said it remained on track to meet full-year guidance for a distribution of 130-140 cents per share.

Like other real estate investment trusts (REITs), higher interest rates make it more expensive for Equites to finance infrastructure.

“Despite the challenges posed by a capital-constrained and higher interest rate environment, management remains confident in its ability to drive sustainable value creation for shareholders over time,” the company said in a statement.

South Africa’s central bank held its main interest rate at 8.25% for a second consecutive Monetary Policy Committee meeting in September.

But 10 consecutive hikes before that had taken the rate to a 14-year high, putting pressure on both companies and households.

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