Vukile Property Fund (JSE: VKE), specialist retail real estate investment trust (REIT), delivered a strong pre-close trading update for the five months from 1 April to 31 August 2025, confirming it is confidently on track to meet its full-year guidance of at least 8% growth in funds from operations (FFO) and dividends per share (DPS).
Operational strength is evident across Vukile’s portfolio of well-located, high-performing shopping centres, which are designed and managed around the customers and communities they serve. Driving positive momentum is the active integration of recently acquired assets in Spain and Portugal, with both Iberian portfolios delivering outstanding metrics, supported by top-tier performance from the South African portfolio.
Spanish subsidiary growing
Through its 99.5%-held Spanish subsidiary Castellana Properties, Vukile acquired its fifth Portuguese asset, Forum Madeira, for EUR63 million at a yield of 9.5% in April 2025. The transaction places 65% of the group’s more than R50 billion of assets, and 60% of its net property income, offshore.
“We signalled to the market that our operational priority was integrating, optimising and unlocking value from our newly acquired Iberian assets. Significant progress has already been made, including the alignment of processes and data management, allowing the Castellana team to start implementing their expertise in value-add asset management initiatives,” confirms Laurence Rapp, CEO of Vukile Property Fund.
The Iberian portfolio demonstrated significant strength. Occupancy across the portfolio is 99%. Positive rental reversions totalled 3.4% — 2.8% in Spain and 6.17% in Portugal. Sales grew 5.7% in Spain and 4.1% in Portugal, or 5.1% in total, with footfalls up 3.0% across the board.
SA portfolio remains in line
In the South African portfolio, all key metrics improved or remained in line with the prior period’s excellent results. Like-for-like net operating income grew 8% and vacancies remained below 2%, reflecting sustained high occupancy and strong demand for Vukile’s retail space across all segments. Vukile reported positive rental reversions for the fourth consecutive year, which are
now growing at around 1.6%, with 83% of leases agreed at positive or flat rental levels. Portfolio trade and footfalls increased, led by township and rural malls. Vukile successfully reduced its cost-to-income ratio yet again, to 13%, led by additional solar PV installed and targeted cost efficiencies.
Support from local debt capital market
Vukile continued to enjoy excellent support in the local debt capital market, with its R500 million bond issuance in August 2025 six-times oversubscribed and 21 investors participating. It achieved the lowest margins since the DMTN programme launched in 2012. In addition, GCR upgraded Vukile’s credit rating to AA+(za) with a stable outlook.
“Vukile has commenced FY26 with robust and sustainable operational and financial strength. We remain open for business with an early-stage pipeline of deal opportunities, which will be subject to our disciplined capital allocation ensuring the deals we do are both strategically aligned and financially accretive,” says Rapp.
Vukile Property Fund will update the market with revised guidance when it reports results
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