{"id":9661,"date":"2025-06-17T17:01:17","date_gmt":"2025-06-17T15:01:17","guid":{"rendered":"https:\/\/sareit.co.za\/?p=8357"},"modified":"2025-06-17T17:01:17","modified_gmt":"2025-06-17T15:01:17","slug":"vukile-produces-powerful-results-in-a-pivotal-year","status":"publish","type":"post","link":"https:\/\/muddev.co.za\/sareit\/vukile-produces-powerful-results-in-a-pivotal-year\/","title":{"rendered":"Vukile produces powerful results in a pivotal year"},"content":{"rendered":"

Vukile produces powerful results in a pivotal year <\/strong>and is primed for further growth<\/strong><\/p>\n

Vukile Property Fund (JSE: VKE), the leading specialist retail REIT, reported a standout set of results for the financial year ended 31 March 2025, reflecting a transformative year of dealmaking, ongoing operational excellence, and decisive and disciplined capital deployment. Delivering on its market guidance, Vukile achieved 3% growth in full-year funds from operations (FFO) per share and increased its dividend per share (DPS) by 6%.<\/strong><\/p>\n

Vukile announced upgraded FY26 guidance, forecasting growth of at least 8% in both FFO per share and DPS.<\/p>\n

Laurence Rapp, CEO of Vukile Property Fund, comments, \u201cWe are pleased to report strong results in a transformative year, distinguished by accretive strategic growth and capital rotation. This outstanding performance validates Vukile\u2019s strategy, expands its earnings base and positions the business for compounding future growth.\u201d<\/em><\/p>\n

It\u2019s total property assets now exceed R50 billion, reflecting an ambitious yet tightly focused investment strategy. During the year, Vukile grasped a golden window of opportunity that expanded its Iberian direct asset base by nearly 60%, consolidating its footprint across two of Europe\u2019s most resilient consumer economies. Now, 65% of the group\u2019s assets, and an expected 60% of its net property income is derived offshore.<\/p>\n

Vukile entered Portugal during the year through its 99.6% held Spanish subsidiary Castellana Properties. The fully-funded multi-asset entry capitalises on Portugal\u2019s strong economic growth and fragmented retail property sector that is ripe for consolidation, mirroring opportunities seized in Spain.<\/p>\n

Continuing its creative dealmaking, in Spain Vukile exited its investment in Lar Espa\u00f1a with a capital profit of \u20ac82 million, concurrently redeploying the proceeds into acquiring the Bonaire Shopping Centre in Valencia with a cash-on-cash return exceeding 8% thereby enhancing sustainable earnings.<\/p>\n

Vukile closed the year with an investment portfolio of 33 urban, commuter, township and rural malls in South Africa,15 shopping centres and retail parks in Spain and five shopping centres in Portugal.<\/p>\n

\u00a0<\/em>\u201cIn South Africa, Vukile\u2019s robust operating platform yet again delivered outstanding results,\u201d<\/em> notes Rapp.<\/p>\n

Valued at R16.7 billion, Vukile\u2019s defensive, dominant South African retail portfolio delivered strong performance and growth. The value of its retail portfolio rose by 8.5%, while like-for-like net operating income increased by 6.4%. Vacancies remain exceptionally low at 1.7%, supported by active letting, with positive rental reversions of 2.4%. Notably, 85% of leases were signed at the same or higher rental levels, with tenant retention at 91%. The total portfolio recorded trading density growth of 5.2% – with its township and rural portfolio outperforming at 6.7% – driven by Vukile\u2019s shopper-first approach, which continues to boost footfall and sales. The portfolio\u2019s cost-to-income ratio was 15.3% – its lowest level in a decade \u2013 reflecting proactive cost management, with the benefit of solar energy contributing to significant efficiency gains.<\/p>\n

Vukile\u2019s solar PV rollout in South Africa has been highly successful, boosting margins and advancing its path to carbon neutrality. Over the year, solar capacity grew by 67%, with 14.4MWp added to the existing 21.6MWp. Solar power now supplies 27% of the portfolio\u2019s energy needs. Vukile has identified a further 10.6MWp of solar projects for FY26 and is finalising the agreements for two wheeling projects totalling 2MWp.<\/p>\n

Adding value to its South African portfolio through acquisitions and developments, Vukile\u2019s R113 million redevelopment of Mall of Mthatha (formerly BT Ngebs), in which Vukile acquired a 50% stake in May 2024, has delivered strong early performance, with the vacancy rate dropping from 16% when acquired to just 2%. The highly accretive project is set for completion in September 2025. The comprehensive R141million Bedworth Centre strategic upgrade in Vanderbijlpark, delivered a high-convenience, community-focused retail destination with enhanced tenant mix, aesthetics, amenities, access and security.<\/p>\n

Vukile\u2019s well-established investment in Spain, together with its new investment in Portugal has clearly cemented Castellana’s position as a market leader, capitalising on the advantages of the region\u2019s status as a European growth powerhouse.<\/p>\n

The Economist ranked Spain as Europe\u2019s top-performing economy in 2024, with GDP growth of 3.2% and forecasts of 2.3% in 2025. The country\u2019s economic growth is fuelled by strong household spending. Disposable income rose by 8.7%, supported by higher salaries, employment and savings levels. Additionally, tourism hit a record \u20ac126 billion with 94 million visitors.<\/p>\n

Portugal\u2019s economy outperformed expectations with 1.9% growth in 2024, driven mainly by household consumption, with record-high employment levels, real wages increasing and high disposable income. Private consumption rose 3.2% in 2024. Growth is forecast at 2.3% in 2025. Like Spain, Portugal is benefiting from easing inflation, projected to fall to 2.3% in 2025.<\/p>\n

Castellana\u2019s R32.9 billion, 20-asset Iberian portfolio remains effectively fully let, with marginal vacancies of around 1% and 95% of space let to blue-chip international and national tenants. Portfolio like-for-like net operating income grew 6.4%. It achieved high positive rental reversions and new lettings of 17.31%. The portfolio has a weighted average lease expiry of 8.8 years. Excellent trading metrics featured across the portfolio, with footfall up 2.4% and sales increasing by 4.3%.<\/p>\n

\u201cCastellana\u2019s on-the-ground presence and expertise has added substantial value to the Iberian portfolio. This year has been one of rapid growth in the region, and our priority is to crystalise potential in our newly acquired assets and deepen value within our existing footprint.\u201d<\/em> says Rapp.<\/p>\n

Vukile\u2019s balance sheet remains exceptionally strong, with a stable LTV of 40.95% and an increased ICR of 2.9-times. The REIT enters FY26 with a well-hedged balance sheet and minimal debt maturities of less than 2% of group debt in FY26, as well as a very healthy liquidity position, with cash and undrawn facilities of R4.6 billion.<\/p>\n

Vukile has an AA(ZA)<\/sub> corporate rating reaffirmed by GCR with a positive outlook. Fitch has awarded Castellana an international investment-grade credit rating of BBB- also with a positive outlook.\u00a0 Over the year, Vukile increased its green and sustainability-link debt by 69% from R1.3 billion to R2.2 billion, aligning its funding strategy with its continued commitment to ESG goals.<\/p>\n

Rapp concludes, \u201cVukile is in a strong position, underpinned by a clear strategy, a proven operating platform, a strong balance sheet, high-quality assets and disciplined capital management. It is well placed to deliver sustainable real growth by maintaining operational excellence, advancing value-added projects within existing portfolios and pursuing further opportunities in our core markets. We are committed to our proven scalable consumer-led model to create value for all our stakeholders.\u201d<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Vukile produces powerful results in a pivotal year and is primed for further growth Vukile Property Fund (JSE: VKE), the leading specialist retail REIT, reported a standout set of results for the financial year ended 31 March 2025, reflecting a transformative year of dealmaking, ongoing operational excellence, and decisive and disciplined capital deployment. Delivering on […]<\/p>\n","protected":false},"author":4,"featured_media":8359,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_price":"","_stock":"","_tribe_ticket_header":"","_tribe_default_ticket_provider":"","_tribe_ticket_capacity":"","_ticket_start_date":"","_ticket_end_date":"","_tribe_ticket_show_description":"","_tribe_ticket_show_not_going":false,"_tribe_ticket_use_global_stock":"","_tribe_ticket_global_stock_level":"","_global_stock_mode":"","_global_stock_cap":"","_tribe_rsvp_for_event":"","_tribe_ticket_going_count":"","_tribe_ticket_not_going_count":"","_tribe_tickets_list":"[]","_tribe_ticket_has_attendee_info_fields":false,"footnotes":""},"categories":[9],"tags":[62,173,15,90],"class_list":["post-9661","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-members-news","tag-financial-results","tag-retail-specialists","tag-sa-reit","tag-vukile-property-fund"],"featured_image_src":{"landsacpe":["https:\/\/muddev.co.za\/sareit\/wp-content\/uploads\/2025\/06\/Laurence-Rapp-450x445.jpg",450,445,true],"list":["https:\/\/muddev.co.za\/sareit\/wp-content\/uploads\/2025\/06\/Laurence-Rapp-450x348.jpg",450,348,true],"medium":["https:\/\/muddev.co.za\/sareit\/wp-content\/uploads\/2025\/06\/Laurence-Rapp-263x300.jpg",263,300,true],"full":["https:\/\/muddev.co.za\/sareit\/wp-content\/uploads\/2025\/06\/Laurence-Rapp.jpg",450,513,false]},"_links":{"self":[{"href":"https:\/\/muddev.co.za\/sareit\/wp-json\/wp\/v2\/posts\/9661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/muddev.co.za\/sareit\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/muddev.co.za\/sareit\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/muddev.co.za\/sareit\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/muddev.co.za\/sareit\/wp-json\/wp\/v2\/comments?post=9661"}],"version-history":[{"count":0,"href":"https:\/\/muddev.co.za\/sareit\/wp-json\/wp\/v2\/posts\/9661\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/muddev.co.za\/sareit\/wp-json\/wp\/v2\/media\/8359"}],"wp:attachment":[{"href":"https:\/\/muddev.co.za\/sareit\/wp-json\/wp\/v2\/media?parent=9661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/muddev.co.za\/sareit\/wp-json\/wp\/v2\/categories?post=9661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/muddev.co.za\/sareit\/wp-json\/wp\/v2\/tags?post=9661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}