Spear Reit, a property fund focused on the Western Cape, has reported a 22.24% increase in distributable income for the first half of its financial year.
The total distributable income rose to R111.2 million for the six months ending in August, up from R90.99 million the previous year.
Distributable income per share increased by 2.06% to 41.61 cents, while distribution per share grew by 3.1% to 39.53 cents.
Our investment portfolio is made up of 28 properties comprising a well-balanced mix of Industrial (56%), Commercial (32%), Retail (12%),
During this period, Spear’s management concentrated on navigating a challenging trading environment and capitalising on increased tenant activity to reduce portfolio vacancies, particularly in its commercial properties.
Despite the tough market conditions, Spear experienced positive leasing momentum in the first half of the 2025 financial year.
Significant progress was made in reducing the overall vacancy rate, especially in the office portfolio, with over 9,000 square meters of commercial office space leased.
This increased the commercial office occupancy rate by 616 basis points.
In April, the JSE listed company announced the acquisition of a real estate portfolio from Emira Property Fund Limited valued at R1.146 billion.
The acquisition, which consists of a diversified portfolio situated exclusively in the Western Cape, highlights Spear’s focused strategy of solely investing in this province, the group said at the time.
The Western Cape real estate market has shown a mix of optimism and realism, with large-scale capital investments from both the public and private sectors driving employment and social upliftment.
Key factors for Spear’s success included robust rental collections, increased letting activity, strong tenant retention, and effective financial, debtors, and vacancy management.
These efforts led to improved occupancy levels, with the core portfolio reaching 95% occupancy. Spear’s balance sheet remains strong, with a loan-to-value ratio of 23.93% before the Emira transaction and the disposal of 100 Fairways Close.
Spear’s strategic focus is supported by strong return-to-office trends, semigration, localisation, and the beginning of an interest rate tapering cycle in South Africa. These factors are expected to benefit both landlords and tenants as overhead cost pressures ease.
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