Shoprite and Equites start R4.1bn joint venture

Retailer will transfer warehouses to the deal with the property fund, which will inject cash

Retailer Shoprite and Equites Property Fund have agreed to form a joint venture worth R4.1bn that aims to develop underutilised land and may acquire further property.

Shoprite will contribute distribution centres and land worth R2bn in exchange for a 49.9% stake in the venture, which will be managed by Equites, which will inject R2.1bn in cash in exchange for a controlling stake.

Shoprite said on Tuesday the properties comprise of a logistics campus, two modern distribution centres and undeveloped land, saying these properties did not generate rental profits for the group, as they were used for operational purposes.

The joint venture company will acquire a distribution centre from Shoprite in Brackenfell for R1.2bn, with Equites saying on Tuesday the deal will unlock value for the retailer.

Equities said the transaction would add to its portfolio of high-quality distribution centres.