Convenience retail is an integral part of the Collins Property Group portfolio, while some 60% of its asset value is from industrial and logistics spaces.
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Collins Property Group increased its distributable income per share (DIPS) by 12.8% to 123 cents in the year to February 28, from 109 cents in 2025, as its already very low vacancy rate reduced even further.
It made a final distribution of 65 cents a share, comprising a normal dividend of 54 cents and a return of capital of 11 cents per share. The dividend payout ratio also increased to 95% from 92%.
The bulk of the company’s portfolio comprises commercial warehouse and distribution centres in South Africa, where it also owns convenience retail centres, and it owns commercial and industrial properties in Australia, Netherlands, Namibia, Mozambique, and Zambia.
The distribution per share increased by 17% to 117 cents. The vacancy rate on its portfolio reduced to a low 1.7% from 1.8%. The company loan-to-value ratio was much in line at 49.2% from 49.8% in 2025.
Directors said that in an interconnected world where wars have global impacts, the knock-on effects brought about by disrupted supply chains came in the form of higher energy costs adding inflationary pressure.
“Unfortunately, the expectation of reduced interest rates in 2026 has been significantly diminished as central banks look to hold or increase rates to combat these inflationary pressures. Elevated costs, including financing costs, reduce demand and limit growth, which is so badly needed in South Africa,” the company's directors said.
“Despite these challenges, we have and will continue to build a robust portfolio that can deliver returns to shareholders through the various cycles,” they said.
Revenue was constant for the period due to the sell-off of non-core assets; however, operating profit increased 8% year on year due to the realisation of sold properties at higher than their book value. Finance costs decreased by R35 million because of lower interest rates.
Total assets amount to R12.91 billion versus R12.3bn at the end of the previous financial year. Investment properties were written up by 2.3%, well below the average inflation rate.
The shareholders' total return for the year came to R2.88 per share, representing a 16.2% return on net asset value or 27% on the year-end closing share price, directors said.
“A strong focus over the last few years has been to replace non-core assets with hard currency assets in Europe. During the year under review, we sold 12 properties in low-growth areas, at above book values, generating R682m in surplus cash. A portion of this cash was used to acquire a portfolio of 8 properties occupied by Intergamma, a leading DIY operator in the Netherlands,” they said.
“We will continue to sell down our exposure to offices and assets in Mozambique, where we only have two assets left, one of which is expected to transfer in June 2026.”
The company continued with its redevelopment of a 17,600 square metre convenience retail centre in Somerset West, the final phase of which would be completed in September.
Phase 1 of an 18,500 m² convenience retail centre in Paarl was opened in November 2025, with phase 2 completing this month. The combined value of the developments was over R1bn.
BUSINESS REPORT