Logistics giant Newlyn Group gets massive R5bn backing from Absa CIB

Burgeoning logistics property and infrastructure giant, Newlyn Group, has secured a R5 billion financing deal with the Absa Corporate and Investment Banking (Absa CIB) unit, which is likely the biggest single funding deal of its kind of a private property company in South Africa.

Newlyn, which is behind the development of the R3.4 billion Newlyn PX Terminal near the Port of Durban, together with Absa CIB, revealed the deal in a statement on Wednesday, saying it will power the group’s national development pipeline, enabling growth at scale.

Read: Durban Port’s new terminal now open [April 2024]

The new Newlyn PX Terminal was one of the projects highlighted at President Cyril Ramaphosa’s SA Investment Conference a few years ago.

Ramaphosa said the development represented a “good model of the public-private partnerships South Africa urgently needs to upgrade local port infrastructure” when he officially opened the Newlyn PX Terminal in Durban in 2024.

Absa said Newlyn is a leading South African ports logistics and infrastructure developer, adding that “the finance solution will fund Newlyn Group’s delivery of infrastructure assets across key logistics corridors” in the country.

“This innovative transaction with Newlyn Group reflects our ability to structure complex solutions and demonstrates the strength of Absa CIB’s partnerships with key clients across the real estate sector,” comments Somaya Joshua, Managing Executive for Real Estate at Absa CIB.

“Newlyn Group has established a three-decade track record of proven investment and development expertise in South Africa’s specialist port logistics sector,” the joint-statement noted.

Its national portfolio of large-scale logistics parks and properties spans 32 assets and more than 1.3 million square metres of gross lettable area (GLA), and includes a 2 million square metres of landbank as well as 200 000m2 of developments currently under construction.

“We are pleased to announce that Absa CIB has developed a bespoke real estate solution at favourable terms for Newlyn Group, unlocking liquidity to enable our growth at scale, while, at the same time, supporting our ongoing balance sheet strength,” says Rajendra Balmakhun, founder and CEO of Newlyn Group. 

According to the Durban-headquartered (Florida Road) group, it remains “committed to a development pipeline of strategically located, high-performance facilities at South Africa’s key coastal and inland logistics hubs”.

Newlyn says: “Its bespoke bulk cargo terminal developments are engineered to raise efficiency across the bulk logistics sector and are set to transform the country’s port logistics landscape.”

While Newlyn is privately-held, it competes with the likes JSE-listed logistics property majors such Fortress Real Estate, Equites Property Fund, Collins Property, and other private and family-owned groups like Shree Property Holdings.

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