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Archives for June 2025

Hyprop’s dominant retail centres maintain their growth trajectory

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Hyprop, the JSE-listed specialist retail fund, reported strong performance for the five months ended 31 May 2025. In its pre-close update, the Group expressed satisfaction with the significant progress it has made so far, positioning itself for further growth in the near to medium term.

“Our sturdy performance during the period reflects the dominance and resilience of our portfolios in South Africa and Eastern Europe despite geopolitical challenges,” CEO Morné Wilken said. “We continue to look beyond the short term for organic and new growth opportunities to deliver value for all our stakeholders.

“In line with our growth and diversification strategy, we recently announced our intention to make a voluntary offer for a controlling stake in MAS plc to expand our footprint in the Eastern European market, for which we have raised R808 million via a book build. We believe the MAS plc transaction could be a game changer for Hyprop and will give us access to new countries in the region, namely Romania and Poland. However, before proceeding with the transaction, we must meet certain conditions, with one key condition being approval from our shareholders.

“If this transaction does not proceed, we can effectively deploy these funds into reducing debt in the short term, as well as for asset management initiatives, organic growth opportunities, further solar-PV projects and new investments within Hyprop’s expansion strategy.”

Hyprop is strongly positioned to make investments, with R1.2 billion of cash and R2.2 billion in available bank facilities, after receipt of the capital raise proceeds. The cash injection took the LTV ratio down from 36.3% at 31 December 2024 to 34.2%.

Since the Group embarked on its new strategic journey in 2019, it has made significant progress, including optimising its EE portfolio, settling dollar equity debt in the sub-Saharan Africa portfolio, and selling the sub-Saharan Africa portfolio in return for shares in Lango, a pan-African real estate investment company. In the same period, Hyprop reduced its LTV from a peak of 52%, shaved its euro equity debt from €403 million to €87 million, simplified its structure, improved its credit rating, and continuously invested in enhancing the attractiveness and sustainability of its centres in South Africa and Eastern Europe.

SA and EE centres maintain attractiveness

In the South African portfolio, tenant turnover rose 7% in the five months ended 31 May 2025 compared with the same period in 2024 while trading density increased by 10.2%. At 31 May 2025, retail vacancies were 3.9%, primarily due to Edgars’ rightsizing its stores in the portfolio, which provides flexibility to secure new tenancies to meet shoppers’ demands. The weighted average reversion rate remains in positive territory at 2.9%, and the retail new deal reversion rate was very pleasing at 13.5%.

All the centres have made good progress with letting and projects. Here are some of the highlights:

In the Western Cape, Canal Walk is pleased to see that Edgars is performing well in the new rightsized space, which includes a world-class fragrance and cosmetics offering. Overall, leasing activity has been positive, with office demand increasing significantly. At Somerset Mall, the Phase 2 expansion of the centre is progressing well, and terms have been agreed with several stores which will occupy the expanded area, including Game, Computer Mania, Total Sports, a variety of athleisure and affordable luxury brands such as New Balance, Burnt, Curve Gear, and Napapijri, an international outdoor apparel brand. At CapeGate, the development of satellite offices around the centre on a leasehold basis is still in the early stages, but it is gaining traction and already attracting potential tenants.

In Gauteng, Rosebank Mall enhanced its tenant mix by adding six new stores: Cannafrica, One Stop Travel & Tours, Drip4Life (IV drip experts), Glow Theory (Korean beauty store), John Craig and Cajees (a watch and accessories retailer). Hyde Park Corner will be significantly enhanced in August with the opening of a new Checkers FreshX store. At Woodlands, the Pick n Pay supermarket has rightsized from 5 600m² to 3 636m² and a new lease agreement has been signed with a franchisee. The Glen completed its egress and ingress project in April and is currently refurbishing its exterior signage.

In Eastern Europe, tenant turnover increased by 3.5% and trading density rose by 4.0%, despite a decline in foot count of -3.3% mainly due to non-trading Sundays in Croatia and recent store boycotts related to rising food prices. Despite these challenges, tenant demand remains robust, as reflected in the modest 0.1% vacancy rate at 31 May 2025.

In Croatia, City Center one East and City Center one West continued to broaden their retail offerings. At The Mall in Bulgaria, various projects have been completed to enhance the sustainability and efficiency of the centre: upgrading the lighting system, replacing the water meters to enable remote reading, and replacing the roof structures over the parking ramps with more durable material. Recent highlights at Skopje City Mall include the grand openings of Ehoreca, the official Nespresso reseller in North Macedonia, and the new Gerry Weber mono-brand store that opened in February 2025.

Enhancing energy, water and waste resilience

Hyprop is focusing on solar-PV installations at its centres and is taking the necessary steps to add a further phase at The Glen. Meanwhile, CapeGate, Somerset Mall and Canal Walk are beginning their initial phases of solar projects. In June 2025, the Group will issue a request for proposals to the energy wheeling market to enhance both existing and new solar-PV installations. Once these solar-PV and wheeling energy projects are completed, they are expected to supply more than 60% of the SA portfolio’s energy requirements. Additionally, the total carbon emissions of the SA portfolio, relative to the 2019 baseline which was aligned with Science-Based Targets, will be below the carbon reduction targets set for 2030.

The three-day backup tanks and pumps for potable water have been installed at all Gauteng centres, with similar initiatives set to start soon in the Western Cape. The organic waste recycling initiatives have proven highly effective, with five centres (Canal Walk, CapeGate, Somerset Mall, The Glen and Woodlands) achieving net zero waste status.

Looking ahead

“Our focus is on creating retail spaces that connect people by providing excellent retail experiences for our tenants and shoppers while unlocking value through initiatives within our existing portfolios in South Africa and Eastern Europe,” Wilken said.

“We will continue to pursue both new and organic growth opportunities in our preferred geographies (being the Western Cape and Eastern Europe), reposition the SA and EE portfolios to maintain their dominance and retain and grow market share, annually review our portfolios and recycle capital where appropriate, implement sustainable solutions to reduce the impact of the infrastructure challenges we face in South Africa, and ensure our balance sheet remains robust.

“Hyprop is confident of delivering strong growth in the coming financial year through improved operational performance of its portfolios, including benefits from solar and other energy projects anticipated to come on stream, a reduction in interest costs and the benefits from deploying the additional R808 million of capital, even in the absence of the MAS transaction,” Wilken added.

Hyprop expects to release its results for the six months to 30 June 2025 on or about 16 September 2025.

Growthpoint’s new Sandton Drive Link Bridge

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Growthpoint’s new Sandton Drive Link Bridge connects assets, access and attractions in Sandton Central

Growthpoint Properties is proud to announce that construction has commenced on the Sandton Drive Link Bridge – a project set to significantly enhance safety, accessibility and connectivity in Sandton Central.

This landmark bridge, which will provide an easy and direct pedestrian route over busy Sandton Drive between Growthpoint’s The Place at 1 Sandton Drive office building and the iconic Sandton City shopping centre, is a game-changer for the precinct. It will provide a secure pedestrian crossing while seamlessly linking key locations within this dynamic hub. It also introduces an eye-catching new landmark.

Funded and driven by Growthpoint Properties, South Africa’s leading JSE-listed real estate investment trust (REIT), the R26 million bridge is more than just a safe crossing point. It is a statement of innovation, urban design and community commitment. The bridge physically and symbolically unites both sides of Sandton Drive, integrating offices, residences and retail spaces into a more cohesive precinct.

Designed for safety, built for the future

The Link Bridge is engineered to be safe, durable and maintenance-free. Its unique architectural design features an angular balustraded walkway clad in stainless steel making it both a functional and aesthetic enhancement to the area.

At its core, the bridge boasts a central covered glass viewing deck offering breathtaking views of both bustling Sandton and the city’s spectacular sunsets. The eco-friendly illuminated viewing deck is a dynamic feature that can change colour to mark seasons, celebrations and events taking place in the area.

The stainless-steel sections and glass box are currently being manufactured off-site in multiple parts while the concrete support columns and walkway are being constructed beside Sandton Drive between Rivonia Road and Alice Lane.  Then, the prefabricated parts of the bridge will be assembled on-site.

A strategic investment in Sandton’s growth

“We are thrilled that this long-held vision is now a reality,” says Neil Schloss, Head of Asset Management at Growthpoint. “This bridge delivers on Growthpoint’s promise to tenants of The Place at 1 Sandton Drive. Together with our partners on this journey – Sandton City, Sandton Central Management District and the City of Johannesburg, among others – we’ve overcome numerous obstacles to create a vital new link.”

Timothy Irvine, Growthpoint Head of Asset Management: Offices, says the new Link Bridge not only boosts the value and attractiveness of The Place at 1 Sandton Drive but enhances mobility and fosters greater connectivity of the entire area. “For tenants of The Place, the bridge adds an invaluable amenity to their prime location. The investment underscores Growthpoint’s commitment to providing exceptional business spaces with sought-after features that set our office properties apart in the South African market.”

Supporting Sandton’s key stakeholders

Sandton City has been a vital supporter of this project, recognising the bridge’s importance as a new link, giving their visitors open access to a spectacular vantage point with views of the vibrant hub that has grown around this exceptional shopping centre while also prioritising their pedestrian customers’ safety and convenience.

Dimitri Kokinos, Liberty Two Degrees Asset and General Manager for Sandton City and Nelson Mandela Square, says, “We welcome this new addition, as a transformative step towards enhancing urban connectivity.  We believe the bridge will provide a safe and efficient route for pedestrians, making access into Sandton City from Sandton Drive South side even easier. This is a great move for the overall Sandton Central precinct.”

Elaine Jack, City Improvement Manager for Sandton Central, adds, “Sandton Central welcomes this substantial enhancement to the precinct, as the Link Bridge will create direct, safe pedestrian access between Sandton City and The Place on Sandton Drive. Growthpoint has always been highly supportive of Sandton Central and the construction of the access bridge further highlights their on-going commitment to the value of the node.”

Public access and security

The Link Bridge will be open to the public from Sandton City during the day, with limited controlled access at night. On the east side of the road, it will be accessible from The Place’s balcony nearest Rivonia Road, leading pedestrians safely across the street and on Sandton City’s upper parking deck near the Woolworths entrance on the west side.

A key group of bridge users will be visitors to the US Consulate in Johannesburg, neighbour to The Place, who will now have a safer and more direct pathway across the road with direct street-level bridge access serving this building.

Investing in premier people-friendly places

Growthpoint Properties has long been a leader in shaping Sandton Central’s skyline, placemaking and public experiences, in addition to investing in real estate, infrastructure and green energy. It already owns a significant portfolio of office assets in Sandton’s core. The bridge is one of several major new investments Growthpoint is making in Sandton Central’s future, shaping a greater, connected and accessible precinct.

Growthpoint’s Link Bridge across Sandton Drive will stand as a testament to a business that goes beyond building structures — shaping stronger, safer, more accessible and sustainable places.

“Thanks to all involved in this initiative over the years, Sandton Central is set to become an even more integrated, convenient and people-friendly place for all who work, live, play and visit,” says Irvine.

Growthpoint brings warmth and dignity to Tembisa learners

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Growthpoint and Threads for iKasi partner bring warmth and dignity to Tembisa learners

Empowering young futures through staff-led community engagement

Growthpoint Properties (JSE: GRT), in collaboration with the non-profit organisation Threads for iKasi Foundation and on behalf of its employees, has donated 50 full winter school uniforms to learners at Ikusasa Comprehensive School in Tembisa, Kempton Park. The handover ceremony, held at the school on Friday 23 May 2025, showed the spirit of employee-driven social impact.

Each complete uniform package includes a jersey, drymac, trousers with shirt, shoes, socks and a winter beanie. These donations are part of Growthpoint’s G² (Growthpoint Gives) programme, which enables the company’s team members to actively participate in upliftment efforts in their own communities.

Ikusasa Comprehensive School is a beacon of resilience and academic ambition in the Tembisa community. With a consistent rise in matric pass rate, increasing from 77.1% in 2021 to an outstanding 95.8% in 2024, the school aims to achieve a 100% pass rate and a 75% Bachelor’s pass this year. Together with its strong academic programme, Ikusasa promotes holistic development through arts, sports, culture and active social awareness campaigns around bullying, substance abuse and health.

The school currently supports many vulnerable learners, including eight child-headed households and 47 orphans. It faces infrastructure challenges and requires greater access to educational resources, technology, and classroom upgrades.

“We are incredibly touched by the generosity of Growthpoint and Threads for iKasi,” says Principal Gladwell Makhoba of Ikusasa Comprehensive School. “These uniforms mean so much more than just clothing – they restore dignity, boost self-esteem, and remind our learners that they matter. The support we’ve received sends a powerful message: our children are seen, they are valued, and they have a community that believes in their future.”

Threads for iKasi, with its mission to create environments where no child is left behind, has successfully rolled out similar initiatives in over a dozen schools in Tembisa. Its model is grounded in restoring dignity through educational support and ensuring that learners are equipped not just academically, but emotionally and socially.

“For me, a school uniform has always meant more than just clothing — it’s a sense of pride, a feeling of belonging, and a quiet promise of potential,” says Khabo Mnguni, Co-founder of Threads for iKasi. “Growing up in the township, I saw firsthand how something as simple as a uniform could change how a child saw themselves. That’s why this mission is so close to my heart. Our partnership with Growthpoint is a golden thread of care, stitched into the futures of these learners. It’s about more than just warmth and appearance — it’s about dignity, confidence, and showing our children that they are seen, supported, and worthy.”

This contribution reflects the heart of the G² programme, which encourages Growthpoint’s staff to lead with empathy and impact.

Shawn Theunissen, Head of Corporate Social Responsibility at Growthpoint Properties. “A Growthpoint team member introduced Threads for iKasi, which brought Ikusasa’s needs to our attention, and we are proud to support their call. In addition to providing vital warmth for children in winter, the initiative is also affirming dignity and supporting learners to focus on their education without unnecessary hardship.”

Growthpoint Properties’ CSR approach is rooted in its commitment to responsible corporate citizenship. Through G², every employee also receives eight hours annually to participate in volunteer activities, making social impact a shared value across the organisation.

“We believe that corporate responsibility lives not just in boardrooms but in every hand helping,” adds Theunissen. “This donation is one small part of our broader commitment to our employees, their communities and to education. We believe that partnerships with educators will yield positive results towards our shared vision of building a better life for all.”

Vukile produces powerful results in a pivotal year

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Vukile produces powerful results in a pivotal year and is primed for further growth

Vukile Property Fund (JSE: VKE), the leading specialist retail REIT, reported a standout set of results for the financial year ended 31 March 2025, reflecting a transformative year of dealmaking, ongoing operational excellence, and decisive and disciplined capital deployment. Delivering on its market guidance, Vukile achieved 3% growth in full-year funds from operations (FFO) per share and increased its dividend per share (DPS) by 6%.

Vukile announced upgraded FY26 guidance, forecasting growth of at least 8% in both FFO per share and DPS.

Laurence Rapp, CEO of Vukile Property Fund, comments, “We are pleased to report strong results in a transformative year, distinguished by accretive strategic growth and capital rotation. This outstanding performance validates Vukile’s strategy, expands its earnings base and positions the business for compounding future growth.”

It’s total property assets now exceed R50 billion, reflecting an ambitious yet tightly focused investment strategy. During the year, Vukile grasped a golden window of opportunity that expanded its Iberian direct asset base by nearly 60%, consolidating its footprint across two of Europe’s most resilient consumer economies. Now, 65% of the group’s assets, and an expected 60% of its net property income is derived offshore.

Vukile entered Portugal during the year through its 99.6% held Spanish subsidiary Castellana Properties. The fully-funded multi-asset entry capitalises on Portugal’s strong economic growth and fragmented retail property sector that is ripe for consolidation, mirroring opportunities seized in Spain.

Continuing its creative dealmaking, in Spain Vukile exited its investment in Lar España with a capital profit of €82 million, concurrently redeploying the proceeds into acquiring the Bonaire Shopping Centre in Valencia with a cash-on-cash return exceeding 8% thereby enhancing sustainable earnings.

Vukile closed the year with an investment portfolio of 33 urban, commuter, township and rural malls in South Africa,15 shopping centres and retail parks in Spain and five shopping centres in Portugal.

 “In South Africa, Vukile’s robust operating platform yet again delivered outstanding results,” notes Rapp.

Valued at R16.7 billion, Vukile’s defensive, dominant South African retail portfolio delivered strong performance and growth. The value of its retail portfolio rose by 8.5%, while like-for-like net operating income increased by 6.4%. Vacancies remain exceptionally low at 1.7%, supported by active letting, with positive rental reversions of 2.4%. Notably, 85% of leases were signed at the same or higher rental levels, with tenant retention at 91%. The total portfolio recorded trading density growth of 5.2% – with its township and rural portfolio outperforming at 6.7% – driven by Vukile’s shopper-first approach, which continues to boost footfall and sales. The portfolio’s cost-to-income ratio was 15.3% – its lowest level in a decade – reflecting proactive cost management, with the benefit of solar energy contributing to significant efficiency gains.

Vukile’s solar PV rollout in South Africa has been highly successful, boosting margins and advancing its path to carbon neutrality. Over the year, solar capacity grew by 67%, with 14.4MWp added to the existing 21.6MWp. Solar power now supplies 27% of the portfolio’s energy needs. Vukile has identified a further 10.6MWp of solar projects for FY26 and is finalising the agreements for two wheeling projects totalling 2MWp.

Adding value to its South African portfolio through acquisitions and developments, Vukile’s R113 million redevelopment of Mall of Mthatha (formerly BT Ngebs), in which Vukile acquired a 50% stake in May 2024, has delivered strong early performance, with the vacancy rate dropping from 16% when acquired to just 2%. The highly accretive project is set for completion in September 2025. The comprehensive R141million Bedworth Centre strategic upgrade in Vanderbijlpark, delivered a high-convenience, community-focused retail destination with enhanced tenant mix, aesthetics, amenities, access and security.

Vukile’s well-established investment in Spain, together with its new investment in Portugal has clearly cemented Castellana’s position as a market leader, capitalising on the advantages of the region’s status as a European growth powerhouse.

The Economist ranked Spain as Europe’s top-performing economy in 2024, with GDP growth of 3.2% and forecasts of 2.3% in 2025. The country’s economic growth is fuelled by strong household spending. Disposable income rose by 8.7%, supported by higher salaries, employment and savings levels. Additionally, tourism hit a record €126 billion with 94 million visitors.

Portugal’s economy outperformed expectations with 1.9% growth in 2024, driven mainly by household consumption, with record-high employment levels, real wages increasing and high disposable income. Private consumption rose 3.2% in 2024. Growth is forecast at 2.3% in 2025. Like Spain, Portugal is benefiting from easing inflation, projected to fall to 2.3% in 2025.

Castellana’s R32.9 billion, 20-asset Iberian portfolio remains effectively fully let, with marginal vacancies of around 1% and 95% of space let to blue-chip international and national tenants. Portfolio like-for-like net operating income grew 6.4%. It achieved high positive rental reversions and new lettings of 17.31%. The portfolio has a weighted average lease expiry of 8.8 years. Excellent trading metrics featured across the portfolio, with footfall up 2.4% and sales increasing by 4.3%.

“Castellana’s on-the-ground presence and expertise has added substantial value to the Iberian portfolio. This year has been one of rapid growth in the region, and our priority is to crystalise potential in our newly acquired assets and deepen value within our existing footprint.” says Rapp.

Vukile’s balance sheet remains exceptionally strong, with a stable LTV of 40.95% and an increased ICR of 2.9-times. The REIT enters FY26 with a well-hedged balance sheet and minimal debt maturities of less than 2% of group debt in FY26, as well as a very healthy liquidity position, with cash and undrawn facilities of R4.6 billion.

Vukile has an AA(ZA) corporate rating reaffirmed by GCR with a positive outlook. Fitch has awarded Castellana an international investment-grade credit rating of BBB- also with a positive outlook.  Over the year, Vukile increased its green and sustainability-link debt by 69% from R1.3 billion to R2.2 billion, aligning its funding strategy with its continued commitment to ESG goals.

Rapp concludes, “Vukile is in a strong position, underpinned by a clear strategy, a proven operating platform, a strong balance sheet, high-quality assets and disciplined capital management. It is well placed to deliver sustainable real growth by maintaining operational excellence, advancing value-added projects within existing portfolios and pursuing further opportunities in our core markets. We are committed to our proven scalable consumer-led model to create value for all our stakeholders.”

Stor-Age reports strong year end results

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Stor-Age reports strong year end results, delivering a decade of successful performance

HIGHLIGHTS

  • Earnings: Distributable income per share for the year 123.01 cents, up 4.1%
  • Financial performance: Rental income up 8.3%, occupancy up 16 000m² and net investment property value up 6.0% to R12 billion
  • Portfolio growth: Number of trading properties increased from 99 to 108, with the total portfolio including developments now exceeding 700 000m² GLA
  • Strategic partnerships: Working with Hines, one of the largest privately held real estate investors and managers globally, on five development projects in the UK
  • Balance sheet management: Loan-to-value ratio of 31.3% and 84.2% of net debt subject to interest rate hedging
  • Future outlook: Forecasting distributable income per share growth of 5 – 6% for FY26

JSE REIT Stor-Age, South Africa’s leading and largest self storage property fund, marked a decade of consistent performance and significant portfolio growth, releasing its tenth annual set of results since listing on the JSE in 2015. Demonstrating resilience, the Group continues to strengthen its market-leading position, delivering another year of robust financial and operational performance.

Stor-Age CEO Gavin Lucas comments, “In 2015 we brought to market a highly specialised self storage REIT, the first self storage REIT to be listed on an emerging market exchange globally and the first, and still only, of the real estate “alternatives” to be listed on the JSE. After a decade of consistent performance, we are pleased to have delivered another strong set of trading results, driven by gains in occupancy and rental rates. While continuing to maintain a conservative balance sheet, we’ve also grown the number of trading properties in our portfolio from 99 to 108.

“Against the backdrop of persistently weak macroeconomic conditions, and including events such as “Nenegate” happening less than a month post our listing, the Financial Services Conduct Authority investigation into high-profile JSE-listed REITs, Covid-19 and a period of rampant inflation and rapidly escalating interest rates, Stor-Age has significantly outperformed both the economic cycle and sector indices over the past decade.

“Assuming R100 was invested on the date of our listing in November 2015 and provided that the full pre-tax dividend was reinvested, an investment in Stor-Age would be worth R329 at the end of May 2025. The same investment in the JSE All Share Index and in the JSE All Property Index would be worth R255 and R112 respectively. The underpin to this stellar performance has been our same-store rental income growth in both SA since 2016 and the UK since 2017, with the compound annual growth rate over the periods in excess of 9% and 8% in SA and the UK respectively, well ahead of the corresponding GDP figure of less than 1% in each market.”

During the past twelve months the South African portfolio delivered another strong performance with same-store rental income and net property operating income increasing by 10.2% and 11.1% respectively compared to the prior year. The UK portfolio delivered an equally pleasing set of results, with same-store rental income and net property operating income increasing by 6.5% and 5.0% respectively.

Stor-Age has a long and successful track record of acquiring, developing and managing self storage properties in prime locations that have delivered high occupancy and rental rate growth. Over the past two years, the Company has completed 12 new developments, six each in South Africa and the UK. Each of these developments were completed in JV structures, where Stor-Age partners with institutional or private equity capital, enabling the Company to acquire, develop, operate and manage assets across multiple locations.

In FY25 the Company opened two new developments in SA, one in Century City in Cape Town and another in Kramerville in Johannesburg, and one development in the UK, located in Leyton in East London. In addition, the Company added four new third-party managed properties in the UK and acquired an existing operator in South Africa, Extra Attic, located near Cape Town Airport.

Post year-end, in June 2025 the Company opened a new £25 million property in Acton, West London in its JV with Moorfield. In addition, following Stor-Age entering into a third-party management agreement with Hines earlier in the year to manage the acquisition of a three-property portfolio in the UK, the two companies have now also partnered on five additional development projects. Hines is a privately owned global real estate investment manager overseeing c. US$90 billion in assets across multiple property sectors. Stor-Age’s development pipeline at year-end consisted of 18 active projects at various stages of planning and completion, amounting to over 83 000m² GLA.

Comments Lucas, “We continue to evaluate new on-balance sheet developments, including extensions to existing properties, and also exploring opportunities to continue partnering with institutional and private equity capital. These partnerships may take the form of joint ventures or sit within our third-party management platform, which enables us to generate additional revenue with minimal capital outlay. This flexible approach has proven successful in the UK where the portfolio has expanded from 26 properties two years ago to 45 today.”

Concludes Lucas, “Over the past decade we have consistently demonstrated our resilience and the ability to deliver robust financial and operational performance despite encountering challenging macroeconomic headwinds in both markets. We will continue to deploy capital strategically, adding quality and scale to our high-quality portfolio on a select basis and in line with our strict investment criteria.

“In South Africa, an improved inflation outlook, a stabilising political climate and recent interest rate cuts have created a favourable environment for further growth. We expect the UK self storage sector to remain resilient, with moderate revenue growth supported by operational efficiencies. We remain focused on enhancing operational performance and driving growth across both South Africa and the UK, supported by a strong and flexible balance sheet, disciplined capital allocation and robust operating margins.”

Stor-Age is forecasting distributable income per share growth of 5 – 6% in FY26.

The share closed on Friday at R16.45.

Fairvest delivers another strong preformance

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 FAIRVEST DELIVERS ANOTHER STRONG PERFORMANCE AND ANNOUNCES RETAIL ACQUISITIONS VALUED AT R478 MILLION

  • An 8.8% growth in interim distribution per B share to 23.10 cents
  • Interim distribution per A share of 69.66 cents
  • Pay-out ratio of 100% maintained
  • Like-for-like net property income increased by 5.1%
  • Vacancies at 5.5%
  • New deal WALE of 47.3 months
  • Loan-to-value ratio reduced to 31.8%
  • Distribution per B share growth for the year expected of between 8.0% and 10.0%

Fairvest Limited announced results for the six months to 31 March 2025, with an interim distribution of 69.66 cents per A share and 23.10 cents per B share. The latter represents an 8.8% growth rate, significantly outpacing the Consumer Price Index.

Fairvest owns and manages a direct property portfolio comprising 127 retail, office, and industrial properties, valued at R12.5 billion, with an average property value of R98.1 million. During the six months, the Group increased its holdings in Dipula Properties Limited from 5.0% to 26.3%, which was accretive to earnings, loan-to-value and net asset value.

Chief Executive Officer Darren Wilder said: “Fairvest is making consistent progress in transforming its diverse portfolio by improving the quality while pursuing its aim of becoming a retail-only REIT servicing low-income communities in South Africa. This is achieved by disposing of non-core assets and reinvesting in retail-focused properties. Approximately 70% of revenue is already generated from retail properties.

Solid property fundamentals

Fairvest experienced positive letting activity, with 236 new deals and 216 renewals concluded over the six months. Pleasingly, the new deal weighted average lease expiry (WALE) has increased from 36.7 months at year-end to 47.3 months. Positive rental reversions continued to improve from 3.6% to 4.3%. Average gross rentals have increased by 2.5% to R130.69 per m2 since year-end. The weighted average lease escalation across the portfolio was stable at 6.6%, with a weighted average lease expiry increasing from 28.6 to 31.0 months. While vacancies have edged up from 4.3% to 5.5%, they remain low, with a tenant retention of 81.3%.

The Group continued to exercise strict control over its expenses, with the entire 8.0% increase in property expenses linked to higher municipal costs. Excluding this factor, operating expenses decreased by 1.9%.

Improving the quality of the portfolio

Fairvest disposed of one industrial property valued at R24 million during the period. The transaction was concluded at an average yield of 9.0% and a 14.3% premium to book value, underscoring its conservative valuation approach. Fairvest continued to invest in the portfolio, incurring capital expenditure of R139.0 million, of which R19.8 million relates to further investments in solar initiatives. The Group also invested R76.6 million in fibre network infrastructure, which earns rental income.

A lower LTV and improved cost of funding

The Group’s net loans of R4.4 billion represent an SA REIT loan-to-value (“LTV“) of 31.8%, a 150bps reduction since year-end (September 2024: 33.3%). The weighted average interest rate for the Group improved by 32bps to 9.38% (September 2024: 9.70%), with a weighted average maturity of 1.9 years.  Fairvest remains well within the Group and portfolio LTV and interest cover ratio covenants. As at 31 March 2025, the Group had cash on hand and undrawn debt facilities of R547.4 million to apply towards growth.

Substantial progress in ESG resilience

The Group has made significant progress with its business continuity strategy during adverse conditions. Currently, around 48.3% of the portfolio GLA has access to either partial or complete backup power.

The Group has also continued to invest in renewable energy, increasing the number of solar plants to 46, with a total installed capacity of 21.9 MWp. These plants provided 16.7% of the combined portfolio’s electricity needs in the six months. Clean, renewable energy generated during this time amounted to R33.1 million. A further eight plants are currently undergoing feasibility assessments, approvals, and implementation, which will add 2.1 MWp of capacity.

Water management remains a significant focus area. A range of water management and water savings projects is underway, including 23 operational groundwater harvesting plants and the strategic installation of 29 smart monitoring equipment to enable early leak detection.

Positive growth expected

CEO of Fairvest, Darren Wilder, said: “The portfolio continues to benefit from the disciplined execution of our strategic objectives – vacancies remain consistently low, tenant quality has improved, and the portfolio remains operationally robust. These solid fundamentals, combined with conservative balance sheet management, position the Group for sustained growth”.

 Given the strong operational metrics and accretive transactions concluded, Fairvest expects distributable earnings per B share to increase by between 8.0% and 10.0% for the 2025 financial year. In line with the Company’s Memorandum of Incorporation, the distribution per A share will increase by the lesser of 5% or the most recent CPI value.

The Board has resolved to maintain the current dividend payout ratio of 100% of distributable earnings.

The retail portfolio is bolstered through several acquisitions

Consistent with its strategy to expand its portfolio of retail assets, Fairvest also yesterday announced the acquisition of five retail properties located in KwaZulu-Natal and the Western Cape. The total value of the acquisitions is R477.7 million with a blended yield of 9.81%. Fairvest concluded agreements to acquire Nquthu Shopping Centre, Ulundi Shopping Centre, Eyethu Junction, and Shoprite Manguzi in KwaZulu-Natal. These shopping centres have key food retailers, including Shoprite, Boxer, and SuperSpar, as anchor tenants.

Fairvest has, in addition, entered into an agreement to acquire Thembalethu Square, located outside George in the Western Cape, which is anchored by Shoprite and Boxer. Fairvest owns 51% of the issued shares in the new acquiring company.

The new shopping centres will add 34 118m² of gross lettable to the retail portfolio.

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