Vukile closes a ‘transformative year’, on track to meet full-year guidance
Vukile Property Fund has posted its trading update for its financial year ended 31st of March 2025, reflecting a ‘transformative year’ with strong performances from both its South African portfolio and its 95% held Spanish subsidiary, Castellana Properties.
In South Africa, its assets witnessed an improvement in trade, particularly in the township (+7.8%) and rural (+4.4%) segments with overall trading density growth of 4.8% (FY2024: +2.4%). The REIT attributes its current retail vacancies of 1.9%, with vacancies excluding retail offices at 1.2%, to its strategic leasing initiatives.
Vukile says it continues to experience strong demand for space across all segments, with its rural and value centres effectively let at 0.1% and 0.5% respectively. Urban vacancies improved to 1.2% from 1.5% in FY2024 with commuter and township retail vacancies decreasing to 2.6% and 1.4% respectively from 3.7% and 3.4%.
“We are greatly encouraged by the improved consumer environment with growth in household consumption, national retail sales, household credit extension and the SA consumer index in the past quarter,” comments Itumeleng Mothibeli, MD of Vukile Property Fund Southern Africa.
“The better trade environment resulted in improved collection rates (101%) and a 22% decrease in outstanding balances. Our portfolio remains well positioned and dominant across all provinces to both deliver growth whilst retaining strong defensive characteristics.”
The REIT reported an overall improvement in its segmental portfolio trading density growth with 7.8% in its township assets, 4.4% in rural, 3.8% in commuter, and 1.1% in its value centres.
Vukile’s township and rural centres continued to outperform with year-on-year growth in both sales (+8.8% and 3.5% respectively) and footfall (+2.3% and 2.6% respectively).
“We are encouraged to see sustained customer loyalty, reflecting our continued focus on consumer needs and strategic initiatives, resulting in a 1% increase in footfall with rural (+2.6%), township +2.3%, commuter +4.1% and urban 4.8%,” notes Mothibeli.
All retail categories reported growth in trading densities, signaling positive trade across the REIT’s asset segments and delivering annualised trading density growth to R35 780/m2 at a rent-to-sales ratio of 6.1%. ‘Groceries’ (21% of Vukile’s gross lettable area (GLA)) experienced trading density growth of 5.6% (FY2024: 0.9%) with ‘fashion’ (23% of GLA) recording trading density growth of 3.4% (FY2024: 0.9%).
The best performing provinces regarding footfall across its assets were Gauteng (+5.4%), the Western Cape (+3.6%) with East Rand Mall (15.5%), Moruleng Mall (12.3%) and Durban Workshop (6.8%), exhibiting the most significant growth in the broader portfolio. Year-on-year portfolio sales increased by 4.5%, continuing to grow across all major categories.
Vukile projects like-for-like net operating income (NOI) growth to increase by 6.4% (FY2024: 5.4%).
During the period, Vukile exited its listed share exposure in Fairvest having sold its remaining stake of c.R141 million and it acquired a 50% stake in Mall of Mthatha (formerly BT Ngebs) in May 2024.
The REIT also exited its investment in Lar España, through Castellana Properties, at a profit of €82 million. The Lar España proceeds with the proceeds from its September 2024 capital raise of R1.5 billion allowed the REIT to acquire three assets in Portugal for €176.5 million, acquire 50% of Alegro Sintra for €44.5 million, acquire the Bonaire shopping centre in Valenica, Spain, for €305 million, and grow the direct asset base of Castellana by c.60% to €1.6 billion.
Vukile says that one more Portuguese acquisition is in the works with both debt and equity funding in place.
The REIT is on track to meet its full-year guidance of 2% to 4% growth in funds from operations (FFO) per share and 6% growth in dividends per share with its results for the full year ended 31st March 2025 to be published on the 17th of June 2025.
