RMB Funds Equites And Shoprite Group Joint Venture
RMB Funds Equites And Shoprite Group Joint Venture. RMB has provided a R700 million funding solution for the development requirements of Retail Logistics Fund, a joint venture between Equites Property Fund and the Shoprite Group.
RLF combines the expertise of Equites, the only specialist logistics real estate investment trust (REIT) listed on the JSE, with the Shoprite Group, Africa’s largest listed retail player, to optimise the retailer’s supply chain and enable them to continue to deliver affordable goods and services.
“Through the joint venture, Equites will manage the development of warehousing space and will lease it to the Shoprite Group to meet their large network of distribution needs around South Africa. This mutually beneficial arrangement allows Equities to grow its portfolio in line with strategy, while the Group can leverage the experience of property experts to develop their distribution centres and warehouses, allowing them to focus more strategically on their retail endeavours,” explains Warren Douglas, Treasurer and Head of Risk Management Equities
“Partnerships of this nature have historically been performed on a single-asset basis, where property players partner with a retailer to develop a single asset and sell it to the retailer. This joint venture represents a market first, as it includes a scalable portfolio of properties, occupied by a single tenant. This indicates a shift in the market as retailers seek to optimise their logistics processes,” says Sashen Naidoo, Transactor at RMB.
The innovative solution delivered by RMB caters effectively to the requirement of RLF for flexibility to pay for development and related costs. Such development facilities are historically challenging for clients to manage, so RMB’s offering enables RLF to dynamically manage their short- and long-term funding needs. The funding solution also incorporates green funding, off the back of RLF’s EDGE (Excellence in Design for Greater Efficiencies) certified logistics assets, which will incentivise environmental sustainability and offer improved access to capital and cost savings.
“Leveraging our long-standing relationships with both entities positioned us well and made RMB the natural choice as the first bank to provide debt funding to the combined RLF entity. The funding structure is underpinned by RMB’s streamlined backend operations, which empower our liquidity management needs,” Anton De Bruyn, Chief Financial Officer at Shoprite Group, concludes.