Heriot REIT has reported a record-breaking year during FY2025 with its distributable earnings having climbed to R389,209 million, reflecting a 26.1% increase on FY2024’s R308,754 million.

The Company says the remarkable growth was driven by several key factors including the acquisition of Thibault in late June 2024 which led to the first-time inclusion of Thibault’s comprehensive income, contributing R61.9 million to distributable earnings, alongside R19.1 million from Thibault’s 10% shareholding in Safari Investments.

Thibault also benefited from significant distributions through its investment in Texton Property Fund which declared distributions totalling 120.10 cents per share.

Net proceeds of R15 million from the disposal of an investment property were included in the earnings, along with a non-IFRS® adjustment of R4.4 million reflecting Thibault’s share of Safari Investment’s final dividend pre-acquisition.

Safari Investment’s alignment of its financial year with Heriot REIT resulted in 15 months of distributable earnings being included, with Heriot REIT’s increased shareholding lifting its share of profits from R103.389 million to R111.366 million despite Safari Investment’s year-on-year distribution decline.

Additionally, a 100-basis point reduction in the repo rate and lower weighted average cost of debt (9.73% versus 10.27% previously) contributed to its financial results.

Performance gains were also seen in the aparthotel sector due to new developments and strategic upgrades, and in the industrial sector from letting vacant space and higher rental renewals.

Heriot REIT’s vacancies remained low at 1.6% compared to 3.1% the previous year, supporting overall earnings growth.

The Company says the inclusion of Thibault’s statement of comprehensive income for the 12 months ended 30 June 2025 significantly contributed to its 14.8% increase in net operating income (NOI) when compared to the prior period with additional growth achieved through Safari Investment’s internalisation of electricity and water utility management.

Heriot REIT’s distribution per share (DPS) of 121.91 cents for the reporting period reflects a 14.3% increase compared to the 106.69 cents per share declared in FY2024. The Company says this growth in DPS is not directly aligned with distributable earnings as the Thibault acquisition initially led to an approximate 4% dilution in DPS but delivered a 7% increase in net asset value (NAV) per share.

The REIT’s net asset value (NAV) per share increased by 17.5% from R17.53 as at 30 June 2024 to R20.59 as at 30 June 2025, driven by an increase in the value of its property portfolio and supported by positive rental escalations on renewals and re-lets across its assets.

Its Board declared a final dividend of 65.07 cents per share for the six months ended 30 June 2025, representing a 14.5% increase compared to the final dividend of 56.81 cents per share for the same period in 2024 with its management pursuing growth of 10% to 15% in its dividend per share for FY2026.