Vukile Property Fund reported a 6.0% increase in its interim cash dividend to 55.2cps for the six months ending 30 September 2024.
The consumer-focused retail REIT, known for its sector specialisation and international diversification, showed strong half-year results, positioning it to meet its full-year guidance of 2% to 4% FFO per share growth and 4% to 6% DPS growth.
Laurence Rapp, CEO, said: “Our strong first-half performance delivered outstanding operating results and solid trading metrics across our property portfolios, which positions us well for continued growth.”
Vukile leads in consumer-focused shopping centres with R40.1 billion in property assets, including 33 malls in South Africa and 18 shopping centres in Spain and Portugal through its subsidiary Castellana Properties.
About 59% of Vukile’s assets are in the Iberian Peninsula, with nearly 48% of its property net operating income in Euros.
In South Africa, Vukile’s strong platform and improving macroeconomic conditions have driven excellent results.
"With sentiment improving, loadshedding decreasing, consumer confidence rising, and interest rates falling, the sustained strong metrics produced by our successful operating platform enjoyed a welcome boost. We anticipate this momentum to persist into the second half and beyond," Rapp said.
Vukile’s South African portfolio, valued at R16 billion, showed 4.6% net operating income growth and a 3.7% increase in retail portfolio value.
Vacancies are low at 1.9%, with 85% of leases signed at the same or better rental levels and 93% tenant retention. The portfolio achieved 4.2% trading density growth and a decreased cost-to-income ratio of 15%.
The solar PV rollout in South Africa has been successful, adding four PV plants with 4.9MWp capacity to its existing 28 plants. Vukile is also focusing on water management and efficiency.
Vukile’s redevelopment projects include the Mall of Umthatha, East Rand Mall, Bedworth Centre, and Thavhani Retail Park.
The company said it continues to look for new investment opportunities in South Africa. "We are actively exploring opportunities and are currently in the early stages of evaluating several potential deals in the market,” said Rapp.
In Spain, Castellana Properties has solidified its market leader position, benefiting from Spain’s strong economy. The Spanish portfolio is fully let, with 95% of space leased to blue-chip tenants, achieving 2.1% rental growth and 45.5% positive rental reversions.
Vukile’s capital allocation strategy includes selling its 28.8% stake in Lar Espana for €200 million, generating a €70 million profit. Castellana is in exclusive talks to acquire Bonaire Shopping Centre in Spain and has entered the Portuguese market with three shopping centres valued at €176.5 million.
Vukile’s balance sheet remains strong, with a reduced LTV of 35%, an increased ICR of 2.5-times, and R6.4 billion in liquidity.
“Vukile delivered excellent first-half operating performance and has laid a firm foundation for future growth. We remain committed to our scalable consumer-led model to create value for all our stakeholders.”
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