Vukile Property Fund issues R500 million in corporate bonds amid strong demand

Vukile Property Fund has successfully concluded the issuance of R500 million in senior unsecured corporate bonds across three- and seven-year maturities.

The offering was met with overwhelming demand, attracting more than R3 billion in bids — over six times the target issue size.

The three-year tranche of R214m priced at 102 basis points (bps) and the seven-year tranche of R286m priced at 135bps — both tighter than initial price guidance. The weighted average margin of 121bps represents a substantial improvement over existing debt maturing in Vukile’s 2026 financial year, which will be repaid, lowering Vukile’s cost of capital.

Vukile CEO Laurence Rapp said: “We are pleased with the strong demand and favourable pricing received. The substantial support for the auction demonstrates the market’s endorsement of Vukile’s disciplined approach to capital allocation, our high-quality assets and our long-term investment strategy.”

Absa Bank Limited, through its Corporate and Investment Banking division, acted as sole lead arranger.

Absa Debt Capital Markets Principal Marcus Veller said there was keen investor interest, with over 21 institutions participating in the auction, and this had demonstrated Vukile’s strong position as a meaningful and regular DCM issuer.

“Vukile’s track record of financial performance and a supportive market culminated in an excellent auction and issuance outcomes,” he said.

“The record low pricing of this bond issuance marks a significant milestone in our debt capital markets strategy. The favourable outcome reduces Vukile's average cost of debt and extends our maturity profile, reinforcing balance sheet strength and flexibility," said Vukile Group head of Treasury Maurise Shapiro.

In July, GCR Ratings upgraded Vukile’s national scale long-term issuer credit rating to AA+(ZA) from AA(ZA) and affirmed its short-term rating at A1+(ZA), with a stable outlook. GCR highlighted that “Vukile’s property performance remains a key rating strength,” citing its resilient portfolio as a consistent outperformer in the broader property sector.

Vukile is a specialist retail REIT with a portfolio valued at approximately R50 billion, operating across South Africa, as well as Spain and Portugal through its 99.6% owned Spanish subsidiary, Castellana Properties.

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