Vukile Property Fund says its township retail segment was a performer for its South African portfolio fed by increased foot traffic during Black Friday and festive season trading in November and December.
The property group said its local and Iberian retail property portfolios, the latter being owned by its 99.5%-held Spanish subsidiary Castellana Properties, delivered impressive increases in performance in November and December 2024, signalling a successful Black Friday and holiday trading period.
“The robust trade of our assets and the vibrant demand from both shoppers and retailers for our shopping centres, particularly in the township and rural markets, remains encouraging. These impressive trading figures bode well for income and valuation growth.”
The South African Portfolio achieved a strong 6.1% growth in trading density during the combined November and December 2024 period, compared to the same months in 2023. This continues the portfolio’s positive annualised trading density momentum, which was 2.4% in March 2024 and 4.2% in September 2024.
“To date, FY25 has continued to show improved and sustained growth as anticipated, driven by an improved macroeconomic environment, governmental reforms on electricity and pension funds, and continued positive sentiment following the formation of the government of national unity, it said.
During the two-month period, township shopping centres were the best performing portfolio segment with trading density growth of 9.6%. Rural and urban centres delivered trading density growth of 5.9% and 4.6%, respectively, “further highlighting the strong festive shopping demand within the communities we serve, the group added.
Retail categories with the most significant turnover growth were Unisex Wear (+7.7%), Groceries (+7.2%), Fast Food (+6.3%) and Home Furnishing (+6.0%), which all recorded substantial, sustained growth. These increases demonstrate strategically sound category exposure particularly in the non-discretionary segments of the market.
Shopper visits in November 2024 increased by 5% compared to November 2023, reflecting stronger Black Friday trade over the month. December 2024 footfall remained consistent with the same period last year.
Vukile said that trading activity within the portfolio during November and December 2024 underscores the robust growth outlook for Spain and Portugal, primarily fuelled by private consumption.
“The projections for 2025 remain pleasingly positive, buoyed by strong employment figures, healthy savings, and manageable inflation. These factors are likely to continue driving interest rate cuts, thereby enhancing consumer spending power.”
Castellana remains in exclusive discussions to acquire the largest shopping centre in Spain’s Valencia province, Bonaire Shopping Centre, from multinational retail REIT Unibail-Rodamco-Westfield. The transaction’s closing was extended due to the tragic 2024 floods in Spain. Unibail-Rodamco-Westfield is making good progress towards reinstating and reopening the centre, which is expected mid-February 2025.
Towards the end of December 2024, Castellana Properties closed the sale of its 28.8% stake in Lar España. “Through the Lar España exit, Castellana has created an opportunity to recycle capital into other strategically aligned and financially accretive growth opportunities with attractive yields and with significantly lower operational and deal execution risk, it said.
And continuing its expansion into Portugal, on 19 December 2024 Castellana acquired 50% of Alegro Sintra shopping centre in Lisbon from Ceetrus. The 50% stake was priced at €46.5 million. The asset is valued at €180m, representing a first-year net initial yield of 8.00%.
Alegro Sintra, Vukile said, is a highly successful shopping centre located in the north of Lisbon, a dense and growing residential node, with an annual footfall of 8.7 million visits and a total gross lettable area (GLA) of 58,000m2, including a top-performing Pingo Doce supermarket.