Vukile Property Fund reports strong growth and optimistic outlook for 2026

Vukile Property Fund reported strong trading metrics for the five months to August 31 and that it is on track to meet full year guidance of at least 8% growth in funds from operations (FFO) and dividends per share (DPS).

The group’s management anticipates being able to revise its annual guidance at the release of its interim results on or about November 26, 2025, but they had made a “great start” to the 2026 financial year and “at the moment it’s all trending in the right direction,” said the CEO Laurence Rapp in a pre-close online presentation on Monday.

The JSE-listed specialist retail real estate investment trust (REIT) is driving momentum through a strong performance from its South Africa portfolio, the integration of recently acquired assets in Spain and Portugal, and from a continuing robust performance from the portfolio in Spain.

CEO Laurence Rapp said the assets acquired in Spain and Portugal were now fully integrated into the group systems. Alfonso Brunet, CEO of Castellana Properties, Vukile’s Iberian subsidiary, said he expects relatively lower rental collection rates of the Portuguese assets to improve, as these were the result of the assets being under-managed for a long period under previous owners.

Through Castellana Properties, Vukile acquired its fifth Portuguese asset, Forum Madeira, for €63 million 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.

Brunet said the economies of Spain and Portugal were expected to remain relatively strong for the remainder of the year, particularly in Spain where tourism was reaching new heights and in spite of a small downward revision in Portugal’s GDP outlook due to the US tariffs.

“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, allowing the Castellana team to start implementing their expertise in value-add asset management initiatives,” said Rapp.

Occupancy across the Iberian portfolio was 99%. Sales grew 5.7% in Spain and 4.1% in Portugal, or 5.1% in total, with footfalls up 3% across the board.

In the South Africa portfolio, all key metrics improved or remained in line with the prior period’s strong results. Like-for-like net operating income grew 8% and vacancies were below 2%, reflecting sustained high occupancy and strong demand for Vukile’s retail space across all segments.

Portfolio trade and footfalls increased, led by township and rural malls. Vukile successfully reduced its cost-to-income ratio, to 13% from 15.3% at the end of the 2025 year, led by additional solar PV installed and targeted cost efficiencies.

Some 300 new leases were signed, 88 of which were new contracts. The key focus over the five months had been cost containment and the group eperienced strong demand from tenants, said the MD of the South Africa portfolio Itumeleng Mothibeli.

The group’s R500m bond issuance in August 2025 was six-times oversubscribed, with 21 investors participating. In addition, GCR upgraded Vukile’s credit rating to AA+ (za) with a stable outlook.

“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’s share price slipped 0.39% to R20.69 on the JSE Monday morning, and the price was 13.3% higher than a year earlier.