Burstone Group has posted its financial results for the year ended 31^st March 2025, having strengthened its balance sheet, reducing its loan-to-value (LTV) from 44% to c.36%, while its South African, European, and Australian portfolios continued to perform in line with expectations.

Following an internalisation process concluded in 2023, Burstone is now established as a fully integrated international real estate business.

Its South African portfolio reflected a marginal increase in base like-for-like net operating income (NOI) of 0.2% year-on-year, maintaining a weighted average lease expiry (WALE) of 3 years. Its retail portfolio continued to post NOI growth while the office and industrial portfolios were impacted by ongoing negative rent reversions.

Reversions across Burstone’s local portfolio improved to -4.6% (March 2024: -9.3%) with the expectation that it will deliver modest like-for-like NOI growth in FY2026, driven largely by its office and retail assets.

The Group concluded sales of c.R1 billion at c.25% discount to book value during the period, targeting a further c.R0.6 billion to c.R0.8 billion of asset disposals in the next 12 months.

In Europe, Burstone retains a 20% co-investment in the approximate €1 billion Pan-European Logistics (PEL) portfolio, serving as the asset manager. The portfolio recorded 0.5% base like-for-like NOI growth in Euros (March 2024: 6.2%) with growth in contracted rent offset by an increase in vacancies (6.1%, March 2024: 2.2%). Burstone re-let or renewed 94% of space that expired during the period.

Burstone’s Australian operations saw an increase in equity AUM to $624 million, up 27% year-on-year with solid growth in fee revenue, up 16.7% year-on-year. To date, Burstone has deployed c.A$52 million / R0.7 billion alongside capital partners in the region.

Burstone’s Australian JV with Irongate Group has entered into a strategic agreement with TPG Angelo Gordon, establishing a new industrial programmatic JV in Australia.

Overall, Group distributable earnings were impacted by marginally dilutive sales despite the completion of an accretive Blackstone transactional deal with Group distributable income per share (DIPS) decreasing by 3% to 102.5 cents per share (March 2024: 105.7 cents per share).

Total Group debt net of cash amounts to R6.2 billion with a ZAR cost of debt of 8.9%, EUR cost of debt of 4.3%, and AUD cost of debt of 5.5%. Total ZAR swaps amount to R3.5 billion with a weighted average swap rate of 7.2% (March 2024: 7.3%). Its Euro debt is 100% hedged at an average weighted swap rate of 2.2% (March 2024: 1.9%).

Burstone has c.R2.6 billion of committed available facilities to settle short debt expiries, maintaining a high 95% hedge against total debt (March 2024: 98%) at Group level. Euro currency risk is managed through the Group’s policy to hedge against foreign income, by way of foreign exchange contracts.

Its Board declared an FY2025 final dividend of R47.65 cents per share (R383 million), representing a 90% payout ratio of H2 FY2025’s distributable earnings of 52.94 cents per share.

The Group foresees anticipated earnings growth of 2% to 4% for FY2026.