Financial services firm Absa Corporate and Investment Banking has increased the financing facilities for logistics and industrial infrastructure developer Newlyn Group to R5.1-billion.

Newlyn focuses exclusively on infrastructure that improves the efficiency of national supply chains through strategically located logistics parks, multimodal freight facilities and bespoke port-related developments.

It owns and manages a portfolio of 32 logistics assets comprising more than 1.3-million square metres of gross lettable area, while maintaining a strategic 24 ha landbank that positions it for future growth.

Its developments are designed to reduce logistics costs, improve operational efficiency and strengthen the competitiveness of businesses operating in South Africa’s freight economy.

The Newlyn PX Bayhead Rail Terminal, adjacent to the Port of Durban, and its planned back-of-port logistics infrastructure in Coega projects are part of a development strategy aligned with national freight logistics reforms and government’s objective of shifting greater volumes from road to rail.

These investments are designed not only to create modern industrial facilities but also to develop integrated logistics ecosystems that connect ports, rail infrastructure and road networks into a seamless supply chain, says Absa.

Absa’s R5.1-billion financing provides the capital platform that enables this next phase of growth. The transaction reflects confidence in clients with proven records, execution capability and sector expertise.

The transaction is a strategic investment in real estate infrastructure that supports South Africa’s long-term growth agenda, and demonstrates confidence in South Africa’s logistics sector at a time when government reforms are creating new opportunities for private capital to participate alongside public infrastructure investment, says Absa.

South Africa’s economic competitiveness depends on its ability to build infrastructure that enables trade, improves logistics efficiency and attracts private investment.

As Africa’s busiest container port, Durban remains the country’s principal gateway for international trade. Continued reforms in the port and rail sectors, together with increased private-sector participation, present an opportunity to reposition South Africa as a globally competitive logistics hub.

However, the success of ports depends on an integrated ecosystem of an efficient harbour, modern warehouses, logistics parks, rail connections and distribution facilities that reduce supply chain costs and improve cargo flows, says Absa.

Over the past decade, increasing volumes of container traffic have migrated onto roads, thereby placing enormous pressure on the national road network, particularly along the Durban-Gauteng corridor. The consequences are visible every day, such as higher logistics costs, increased congestion, accelerated road deterioration, greater carbon emissions and heightened safety risks.

Every efficient logistics park, warehouse and multimodal terminal reduces the cost of moving goods, improves export competitiveness, strengthens industrial development and creates employment throughout the value chain.

Globally, successful logistics economies do not force road and rail to compete, but integrate them.

Road transport should continue to perform the critical first-mile and last-mile functions that provide flexibility and responsiveness. Rail should become the backbone of long-distance freight movement, particularly for containerised cargo travelling between Durban and the country’s industrial heartland.

This integrated model reduces costs, improves reliability and extends public infrastructure’s lifespan, the bank says.

South Africa’s logistics recovery will require collaboration between government, developers and financial institutions. Public sector reforms are creating the policy environment, specialist developers are delivering world-class logistics infrastructure and institutions are providing the long-term capital required to accelerate delivery.

The R5.1-billion transaction is about financing real estate infrastructure assets that will strengthen supply chains, improve trade competitiveness and support South Africa’s long-term economic growth.

Absa is committed to financing catalytic infrastructure that unlocks economic activity, facilitates trade, creates employment and creates lasting value for clients and the broader economy, it says.