The Fund's investment strategy is approved by the Board of Trustees on an annual basis and is described in the Fund's Investment Policy Statement (“IPS”), which is reviewed by the Board and the financial regulators (i.e., Financial Sector Conduct Authority) annually.
The Trustees continually analyse the performance of the Fund and regularly review the strategy to ensure it remains relevant during the prevailing market and economic environments, noting however that saving for retirement is a long-term goal and therefore the focus tends to be on the long term.
Reason for the Transaction
Although the Funds' investments have recovered from the short-term losses experienced in 2020 due to the Covid-19 pandemic the Fund is continually searching for asset classes that have proven to be defensive against market downturn and the impact of Covid-19. Industrial and logistics assets which offer inflation-linked cash flow distributions and liquidity to the Fund to meet its obligations to the members, is just such an asset.
The Eskom Pension and Provident Fund has formed a Joint Venture (JV) with Equites Property Fund Limited (“Equites”) and has acquired the DSV campus (industrial and logistics asset) as announced by the Stock Exchange News Services (SENS). The EPPF will hold 49% shareholding in the JV-Special Purpose Vehicle (SPV) at an approximate equity contribution of R720 million (all costs included).
The DVS Campus is a property that consists of approximately 87,000 m² of warehouse space, 40,000 m² of cross-dock space, and a three-storey office facility measuring over 10,500 m². The property is strategically located on the R21 Highway in Riverfields, Gauteng, with convenient and easy access to Johannesburg, Pretoria, and the surrounding municipalities, the O.R. Tambo International Airport, and intermodal transportation services. It is within the growing logistics node.
Benefits of the transaction
- This transaction presents the Fund with a unique opportunity to invest in high-quality real estate assets, which have long-term lease agreements and predictable cash-flows that are CPI-hedged (inflation linked).
- This asset class (industrial and logistics assets) has proven to be defensive against economic downturn and COVID-19 impact - it continued to afford investors with value growth and decent yields.
- It is the mandate of the real assets portfolio to seek opportunities which offer inflation-linked cash flow distributions and liquidity to the Fund to meet its obligations to the members.
- This partnership with a reputable, large logistics specialist Real Estate Investment Trust (REIT) in the South African property industry allows the EPPF to benefit from the specialist property expertise of the Equites management team and benefit from the tax-advantaged treatment of the REIT framework.
- Equites has a good track record backed by a strong balance sheet which signals the promising growth potential of this partnership.
For any enquiries please contact the EPPF Call Centre on email@example.com or on 0800 11 45 48.