Dipula Properties (JSE: DIB) today announced five strategic acquisitions totalling approximately R700 million, underscoring its commitment to long-term value creation. Foremost among them is the R480 million acquisition of Protea Gardens Mall in Soweto.

Dipula is a prominent South Africa-focused REIT with a defensive portfolio, and more than two-thirds of its income derived from retail centres in townships, rural areas, and urban convenience nodes.

With these acquisitions Dipula continues its portfolio growth strategy, focused primarily on retail, industrial and logistics assets.

Izak Petersen, CEO of Dipula Properties, describes the acquisitions as “an agile response to improving market conditions and a more favourable cost of capital environment”.

Protea Gardens Mall, Soweto

Protea Gardens Mall is a 24,000sqm community shopping centre located in the densely populated area of Protea Soweto. Anchored by leading national retailers including Shoprite, Boxer, and Cashbuild, alongside top-tier fashion brands, the mall boasts over 70% national tenant occupancy, representing both retail strength and income durability.

“Protea Gardens Mall is an excellent strategic fit for Dipula with embedded growth and value unlock potential, underpinned by quality tenants and a growing consumer market,” confirms Petersen.

The acquisition supports Dipula strategic objective to grow its exposure to its targeted retail markets. It also reinforces the company’s commitment to community upliftment through accessible, everyday shopping experiences.

Additional retail expansion

Dipula also announced it has concluded terms for two retail additions that will deepen its presence in key and proven markets.

Woolworths Gezina is adjacent to the Dipula’s highly successful Gezina Galleries. This 4,600sqm addition will be incorporated into the existing centre. The expansion enhances the overall tenant mix and brings the centre’s gross lettable area to around 20,000sqm.

The company has also agreed to acquire land adjacent to the 15,000sqm Tower Mall in Jouberton. This acquisition unlocks future expansion potential for the strongly performing shopping centre.

Industrial growth aligned to strategy

Complementing its retail momentum, Dipula concluded terms for two properties that further cement its core focus on logistics and industrial assets.

Airborne Industrial Park, located near OR Tambo International Airport and adjacent to the N12 highway, is a fully let multi-tenanted park of 6,964sqm. Abland DC, is a modern logistics development spanning more than 16,000sqm, anchored by a strong tenant covenant on a long lease.

“Both these assets have excellent tenant profiles, and are well aligned with our approach to capital allocation in the industrial sector, which is a core part of our strategy,” adds Petersen

Accretive effects

All the income-earning properties are both income and quality enhancing for Dipula’s portfolio. The deals are subject to standard conditions precedent. Transfers are expected to take place between September and November 2025.

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Stor-Age Property REIT Limited, South Africa’s leading and largest self storage property fund, announced robust trading results for the four-month period ending 31 January 2025, with total occupancy and average rental rates up.

 Stor-Age delivered a strong trading performance in South Africa in Q3 of FY25, ending 31 December 2024, which continued in January 2025. Occupancy in the owned portfolio increased by 5 400m² compared to September 2024, to close at 93.5% at 31 January 2025. The portfolio achieved an average rental rate increase of 7.8% year-on-year.

In the context of a subdued economic environment and relative to publicly traded operators, the UK portfolio’s performance was resilient. With Q3 being the weakest trading quarter seasonally in the UK for the self storage sector, total year-to-date occupancy still ended up 1.5%, increasing by 1 400m². The portfolio achieved an average rental rate increase of 4.1% year-on-year.

The company’s joint venture (JV) properties performed well in both markets, with occupancy since 30 September 2024 increasing by 4 100m² and 2 700m² in South Africa and the UK respectively.

Comments Stor-Age CEO Gavin Lucas, “We are pleased with the continued strong operational performance achieved over the four-month period. Our South African portfolio has performed exceptionally well, while our UK portfolio continued to demonstrate its defensive nature and resilience.”

The company has continued to expand its footprint in both markets. In Cape Town, expansion continued at the Parklands property which will increase the GLA to 6 900m². In the company’s JV with Garden Cities, a purchase agreement was also recently finalised to acquire a parcel of land adjacent to the Sunningdale property, which has performed exceptionally well since its opening in May 2021, to expand the property to 10 500m².

In London, together with its JV partners, the company completed the development of its property in Leyton (located in east London) in January 2025 and progress continued at the Acton property (located in west London), with a targeted completion date of Q1 FY26. The Leyton property will comprise 3 900m² on full fit-out while the Acton property will comprise 5 800m².

Adds Lucas, “There remains an undersupply of high quality self storage properties across both South Africa and the UK providing the group with an excellent opportunity to expand its presence in both markets. The long lease-up period (financing cost implications) required to reach stabilised occupancy at new properties in these high-barrier-to-entry locations also contributes to the defensive nature of our portfolio.”

The company has also continued to make significant progress with its third-party management offering, Management 1^st, particularly with privately owned global real estate investment, development and management firm Hines. In addition to the three property Kent Space portfolio which closed in May 2024, the Hines development pipeline now consists of an additional six properties.

Adds Lucas, “Within the Hines pipeline, two development sites have recently been acquired in Chelmsford and Buckinghamshire. Construction at the first site in Chelmsford, Essex is scheduled to begin in Q1 FY26 and work is underway to submit a detailed planning application for the second site in Buckinghamshire by the end of March. Hines hold exclusivity over the four remaining properties in the pipeline, all of which are in various stages of planning.”

Looking ahead, the company remains focused on further expanding its portfolio while continuing to produce an attractive trading performance. Concludes Lucas, “The outlook for development activity remains positive and we are well positioned to pursue these opportunities with our JV partners as they arise.”

The share closed on Friday at R14.60.

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In 2024, Redefine received an overall Sustainalytics ESG risk rating of 6.5, positioning it 35th out of 15,111 companies rated by Sustainalytics worldwide and 12th globally in the real estate category. A rating of 6.5 places Redefine in the lowest negligible-risk bracket, meaning that the company’s exposure to ESG issues is low, while its ability to manage any issues with the help of its practices and policies is high.

Redefine is dedicated to setting the benchmark for ESG leadership in the South African real estate sector. Its strategy embeds ESG principles into every decision, ensuring long-term value creation through sustainable investment and operations. The company’s environmental strategy is defined by clear policies, measurable impact, and accountability across key focus areas.

As part of its ESG efforts, Redefine integrates numerous sustainable design practices into its office parks and properties. Energy-efficient buildings, green spaces, and eco-friendly materials are standard, reinforcing its dedication to operational efficiency and environmental responsibility. These efforts translate into tangible benefits, from lower utility costs and healthier workspaces to increased tenant satisfaction.

As demand for responsible and sustainable real estate grows, Redefine continues to lead by example. For instance, Blue Route Mall is advancing its sustainability efforts by working toward becoming a plastic-free mall, while Matlosana Mall has implemented waste reduction and energy conservation initiatives to minimise its impact.

Sustainalytics’ ESG Risk Ratings provide a multi-dimensional assessment of a company’s exposure to industry-specific risks and its ability to manage them. The rating system is built on three key pillars: Corporate Governance, Material ESG Issues (MEIs), and Idiosyncratic Issues. By assessing companies through this framework, Sustainalytics analyses policies, practices, and performance data to determine ESG risk levels.

As ESG factors increasingly shape investment decisions, Redefine’s achievements reinforce its status as a responsible, forward-thinking REIT. Looking ahead, the company remains focused on advancing its ESG strategy, continuously improving sustainability measures, and driving meaningful change in the real estate sector.

As stated by Ursula Mpakanyane, Head of ESG at Redefine Properties: “At Redefine, sustainability is not just a commitment; it is embedded in everything we do. Being the only South African REIT featured in Sustainalytics’ Global 50 Top-Rated ESG Companies is a testament to our unwavering dedication to responsible real estate. Our negligible-risk ESG rating of 6.5 reflects the strength of our policies, governance, and environmental initiatives, reinforcing our ability to manage ESG risks effectively. As we continue to integrate sustainability into our operations, from energy-efficient buildings to waste reduction and green design, we remain focused on creating long-term value for our stakeholders while shaping a more resilient and sustainable built environment.”

With a commitment to ESG leadership, Redefine is not just future-proofing its business; it is shaping the future of responsible real estate. Through innovation, accountability, and a results-driven approach, Redefine continues to set new standards, delivering lasting value for stakeholders and the environment. This is not just progress; it’s a sustainable legacy in the making.

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Attacq Limited is proud to share its latest pre-close update, reflecting solid progress aligned with our strategic vision and reinforcing confidence in achieving our FY25 distributable income per share (DIPS) growth guidance of 17% to 20%.

As a JSE-listed REIT, Attacq remains committed to delivering long-term value for stakeholders, with recent achievements demonstrating our dedication to sustainable growth and resilience.

Key highlights from the update include:

–  A high occupancy rate of 92% and an impressive collection rate of 98.7%, reflecting the strength of our portfolio and partnerships

– The successful R760 million DMTN issuance at reduced margins fortifies our financial flexibility, with FY25 interest cover ratio projected above 2.5 times and gearing below 30%

– Five rooftop PV systems are in progress, elevating our renewable energy mix to 9.3% and advancing sustainablity objectives

– The Waterfall Junction water connection has been finalised, creating pathways for developments and sustained economic growth

– Strategic upgrades, including a 1 995m² Checkers expansion and 23 store revamps, modifying the retail experience and enhancing value for our clients and shoppers.

Attacq’s achievements are a testament to our unwavering commitment to people, purpose, and progress. “Our journey is driven by a vision to create spaces that inspire, deliver sustainable growth, and leave a lasting impact on the communities we serve,” says CEO Jackie van Niekerk.

With an eye on the future, Attacq continues to lead through innovation and purpose, building a sustainable legacy characterised by growth and resilience

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Black Friday’s late arrival on 29 November sets the stage for a uniquely condensed peak shopping season. With five fewer days until Christmas compared to the November 25 and 24 dates of the past two years, the question remains: how will this impact retail sales performance?

Black Friday has come to symbolise the kick-off of the holiday shopping period. Despite the earlier dates, the past two years have seen disappointing Black Friday spending. Savvy shoppers demand real value and great experiences, and many South Africans have been particularly cash-strapped.

A shortened shopping season but more consumer confidence

This year, fewer shopping days between Black Friday and Christmas Eve could signal lower sales over the festive period, even with a surge in shopping as consumers scramble to make purchases. However, consumers are feeling more confident about spending than in recent years, and some even have a little more to spend, which could result in bigger baskets balancing out the effects of the compressed timeline.

Factors contributing to this rise in confidence include a settling political landscape, the suspension of load shedding, a stabilising currency, improving inflation rates, a second local interest rate cut, and the first payouts from South Africa’s new Two-Pot Retirement System.

Retailers adapt

General dealers like Game, Makro, Builders, and Jumbo Cash & Carry have already responded to this festive season’s time-crunch dynamic with month-long Black Friday promotions starting in early November.

These extended campaigns may actually work in consumers’ favour, allowing them to feel more secure in their purchasing decisions as they have longer to evaluate deals and sales. That said, campaigns like Game’s, which notes “When it’s gone, it’s gone”, send a clear message not to dither over purchasing decisions too long.

Interest rates and disposable income

Historically, when consumers perceive their financial situation as stable or improving, they’re more likely to splurge during seasonal shopping peaks.

With last week’s announcement of a further 25bps interest rate cut resulting in interest rates being 50bps lower than this time last year, putting a bit more money in consumers’ pockets, we can expect a positive impact on festive spending. The start of a downward interest rate cycle in September means consumers will have some more disposable income to allocate towards non-essential purchases.

Wage increases and year-end bonus payouts are expected to improve in 2024, adding to seasonal spending power. Yet, many companies remain under financial strain, with limited capacity to pay bonuses, instead opting for retail gift cards for their employees.

The two-pot effect

When it comes to the first payouts from the Two-Pot Retirement System, indications are that much of this will go to debt repayment and education-related spending. Still, it will also benefit retail as the easing of other financial pressures allows people to loosen their spending belts a little.

A focus on essentials

However, for the 2024 festive season overall, consumers will continue to remain cautious, focusing primarily on essentials. At Emira, recognising the increasing preference for an all-in-one shopping experience has led to a focus on providing exceptional shopper experiences and smooth journeys.

Buy-now-pay-later

The attractiveness of buy-now-pay-later (BNPL) options like Pay Just Now and Payflex will play a role in festive buying trends – online and instore, offering consumers no-fee, interest-free repayment plans that are especially appealing to budget-conscious consumers.

The role of social media

Social media will have an immense influence on the choice of gifts and the season’s most-wanted items, with platforms like TikTok, Facebook, and Instagram becoming virtual shop windows. Influencers have become modern-day advertisements that help retailers reach audiences in an authentic way.

Seamless shopping experiences

For shopping centres and retailers, the short season means a greater emphasis on providing seamless experiences. Ensuring ease throughout the shopping journey means customers can enjoy frictionless festive shopping outings.

Many price-conscious and time-pressed shoppers arrive at a shopping centre knowing what they want after comparing products and pricing online but still prefer the in-store purchasing experience. So, it’s important to make their shopping trip a good one.

All-in-one shopping

At Emira, our retail centres offer a variety of essential and unique retailers. One example is Wonderpark Shopping Centre in Pretoria, which is expanding its entertainment and leisure offering with the launch of Goldrush in November and a refurbished Play Area and Kiddies Club in time for December and the school holidays, surrounded by various restaurants and eateries. These amenities invite customers to linger longer, providing maximum value to their overall shopping experience.

A January boost?

Interestingly, the condensed festive season may actually lead to higher spending in January. Consumers may feel rushed, postponing certain purchases until the new year. The growth in the popularity of gift cards as presents means redemptions will occur in January, driving sales.

Back-to-school dash

Back-to-school shopping in January may also see a more pronounced trend than in the past, with both inland and coastal public schools, as well as most private schools, starting on the same day, 15 January 2025. This creates another potential time crunch, emphasising excellent seasonal planning to meet demand and quickly pivot from one retail season into another.

The stakes are high

The stakes are always high for retailers and shopping centres over the holiday season, and this year’s condensed timelines intensify the pressure.

Shopping centres that deliver smooth, seamless, all-in-one experiences, with retailers offering trending products and services, various payment options, and great customer service, will be best positioned to benefit from the upside of the early improvement in consumer sentiment.

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Johannesburg, 4 November 2024 – Redefine Properties (JSE:RDF) has reported solid improvements across its key operational metrics for the financial year ending August 31, 2024. This year has marked a crucial turning point for the property sector, as easing interest rates and increasing confidence are leading to better property fundamentals and a more favourable operating environment.

Andrew König, CEO of Redefine, stated that the decrease in political risk, along with a stable electricity supply, has boosted confidence. He noted, “Advancements in strategic reforms, such as Operation Vulindlela and the Government of National Unity’s emphasis on supporting local government as well as a commitment to achieving 3% economic growth, are all contributing to this increased confidence, which serves as a cost-effective form of economic stimulus. This, combined with falling interest rates, is helping to propel the property cycle upward.”

Redefine has focused on preparing for a potential recovery in the property cycle. The reported enhancements in operating metrics, though starting from a low baseline, are primarily the result of strategic initiatives. These include efforts to simplify the asset base, optimise capital by restructuring R27.7 billion in local debt, develop talent, and expand sustainability initiatives like the implementation of solar PV systems to meet energy needs.

Redefine’s COO, Leon Kok, noted that during the reporting period, most of the company’s South African operating metrics have either stabilised or improved. “In particular, occupancy rates increased to 93.2%, up from 93.0% in FY23, with noticeable enhancements across all sectors. Tenant retention, which has become more difficult due to heightened competition from excess supply, is nearing 90%. This is a strong result that reflects the quality of Redefine’s portfolio and the strength of our relationships with tenants, who are eager to renew long-term leases with us.”

He stated that Redefine’s retail portfolio continues to perform well, with occupancy rates for FY24 rising to 95.0% (FY23: 93.6%). “We anticipate further improvements in occupancy rates for FY25 due to positive sentiment and decreasing interest rates, which are expected to enhance consumer spending power.”

Redefine reported an overall improvement in renewal reversions, now at -5.9%, up from -6.7% in FY23, primarily driven by the retail and industrial sectors. While the office portfolio saw negative reversions of -13.9%, Kok explained that this was due to market rentals not keeping pace with underlying rental escalations. He anticipates stabilisation as market conditions improve.

However, occupancy in the office portfolio continues to benefit from Redefine’s exposure to P- and A-grade assets. The limited demand in the office market is increasingly focused on higher-quality properties, where Redefine holds a more competitive advantage.

Redefine’s industrial portfolio remains resilient, benefiting from long leases and quality tenants, with renewal reversions increasing by 5.5% during the period. Kok noted that this result reflects both the portfolio’s quality and the underlying activity supporting market rental growth. “Our strategy in this sector is bullish regarding capital allocation, as we have access to developable land in prime locations near key transport hubs, which should create a strong pipeline of leasing opportunities.”

Kok highlighted the increase in solar PV capacity as another positive result from FY24. During the year, Redefine added a further 8MW of solar capacity, with an additional 18MW currently underway. Once completed, this will bring the total installed capacity to over 60MW.

Solar PV accounts for 18% of the energy requirements for the South African retail portfolio, while Polish retail, logistics, and office sectors utilise 25%, 86%, and 100% green energy, respectively.

In Poland, EPP’s core portfolio has achieved an occupancy rate of 99.1% (FY23: 98.4%), with renewal reversions turning positive at 0.2% (FY23: -7.2%), which signals a return to market rental growth.

“The Polish economy is stabilising, and we are beginning to observe a rebound in retail spending growth due to moderating inflation and electricity costs returning to pre-energy crisis levels,” König explained. “Likewise, the logistics sector is performing well, supported by a market that favours infrastructure expansion, particularly in Western Europe and Germany.”

ELI, Redefine’s Polish logistics platform, has an occupancy rate of 93.4%, and the 62,601 sqm of developments completed during the period are fully occupied.

Redefine’s self-storage operations in that market are also growing, following the acquisition of TopBox. Along with seven new developments being considered, this could potentially increase the net lettable area by an additional 33 277 sqm.

Redefine CFO Ntobeko Nyawo said that from a financial standpoint, Redefine’s balance sheet remains strong. “We achieved distributable income per share of 50.02 cents, in line with our market guidance. Net operating income in our South African portfolio grew by 5.2% to R4.967 billion, demonstrating our ability to maintain profitability amidst challenging conditions.”

The EPP core portfolio delivered net property income of R1.3 billion, which is an improvement on last year’s R1.2 billion, and was largely driven by rental indexation and increased occupancy levels. The cash distributions from the joint ventures also increased to R612.4 million compared with R334.3 million in FY23.

“We have acknowledged concerns regarding the complexity and high leverage of our joint ventures. To address these issues, we have developed a comprehensive plan and programme that will be implemented over time. Although this is not an immediate process, we have a medium-term strategy designed to tackle the challenges associated with these joint ventures, including necessary corporate actions. We are also pleased to report that institutional investment is returning to the Polish market, which supports the launch of our action plan.”

Nyawo said that the solid operational results were offset by the net finance charges increasing by 15.1% to R2.1 billion. “However, if we look at the quality of our earnings, it is pleasing that 95.8% of FY24 distributable income is recurring in nature; demonstrating the business’ ability to generate sustainable earnings in a tough operating environment.”

Nyawo stated that a major priority this year has been developing an efficient funding model to support the growth ambitions of the property platform. During the period, Redefine achieved a significant milestone with its innovative R27.7 billion common debt-security structure, which is anticipated to enhance competition among funders.

“The substantial refinancing completed in FY24 has resulted in a very low-risk debt maturity profile for us. In FY25 and FY26, no more than 10% of our group debt will be maturing, and with access to liquidity of R4.8 billion, our business is able to absorb headwinds and cease opportunities as they arise.”

He noted that the SA REIT’s loan-to-value ratio for FY24 stood at 42.3%, slightly exceeding the target range of 38% to 41%. The acquisition of the Mall of the South contributed 1.1% to this figure, which Redefine had previously communicated to the market. There are plans in place to reduce this ratio within the target range over the medium term.

“Finally, we are pleased to report that our distribution results include a payout of 22.2 cents for the second half, bringing our FY24 payout ratio to 85%. This is within our established dividend payout range of between 80-90%.”

Looking ahead, König said that Redefine is optimistic about FY25, with expectations for distributable income per share to range between 50-53 cents. “We are aware of the geopolitical risks that could disrupt inflation trends and monetary easing. Therefore, we are committed to improving our business performance by enhancing operational efficiency, restructuring our debt, and further simplifying our asset base. This approach will enable us to achieve risk-adjusted returns throughout market cycles. We are transitioning from merely identifying opportunities to actively capitalising on them, building on the progress we’ve made over the past year and focusing on the opportunities we identified in FY24.”

He added that much of the recent improvement in Redefine’s share price can be attributed to macroeconomic factors, such as increased confidence and the downward shift in interest rates. “Moving forward, we need to reinforce this improvement with operational results that support our share price. Our strategy emphasises organic growth, and as our share price approaches a level where the forward yield aligns with our debt pricing, we can reassess the overall debt-equity balance. Additionally, we will offer a dividend reinvestment plan, which seeks to conserve cash for the company and give investors the opportunity to cost effectively reinvest in Redefine’s compelling investment proposition.”

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Cape Town, 24 October 2024: Spear REIT Limited (SEA: SJ), the only regionally specialised Real Estate Investment Trust (REIT) listed on the JSE, has reported its interim results for the half-year ending on the 31st August 2024 (HY2025). With REITs experiencing varied performance due to challenging macroeconomic conditions, Spear delivered solid results, showcasing the resilience of its portfolio and its strategic focus on the Western Cape. The board of directors maintained a 95% payout ratio and announced a Distribution Per Share (DPS) of 39.53 cents for the six months ended on the 31st August 2024.

Quintin Rossi, CEO of Spear REIT Limited, commented on the results: “Within the context of the persistently tough trading environment, we are pleased with Spear’s performance in HY2025. The interim period has established a solid foundation to build on for the remainder of the financial year. Our Western Cape-focused strategy, coupled with our hands-on asset management approach, have allowed us to continue delivering value to our stakeholders as Spear delivers a mission statement-aligned financial and operational outcome for the reporting period. We continue to be optimistic as the economic landscape shows signs of improvement, particularly since the formation of the Government of National Unity (GNU) in South Africa, the easing off of loadshedding thanks to the stabilisation of the national grid, and the commencement of the interest rate tapering cycle by the SARB, which have all positively impacted investment confidence.” According to Rossi, these are encouraging signs for the real estate market, as sovereign bond yields compress, inflation comes under control and economic expansion commences, the property market is likely to see improved occupancy rates, increased tenant activity, and stronger financial performance.

Key financial and operational highlights

• Distributable income per share (DIPS) for HY2025: 41.61cps (up 2.05% from HY2024)
• Dividend per share (DPS) for HY2025: 39.53cps (up 3.14% from HY2024)
• Payout ratio: 95.08%
• Occupancy rate: 95.08%
• Loan-to-Value (LTV) ratio: 23.93%
• Interest Cover Ratio (ICR): 3.01 times
• Tangible Net Asset Value (TNAV) per share: R11.74
• Collection rate: 98,05%

Spear achieved a 6.34% increase in group revenue excluding smoothing, driven by strong leasing activity, reducing vacancies, and maintaining in-force escalations. The net property operating profit for HY2025 saw an increase of 1.92% compared to HY2024 excluding smoothing, reflecting resilient expense management despite difficult trading conditions. Commenting on Spear’s performance, Nesi Chetty, Fund Manager and Head of Property at Stanlib, said, “Leasing fundamentals across the Spear portfolio have been strong over the last 12 months. A buoyant jobs market, scarcity of land, an increasing Business Process Outsourcing (BPO) presence in the Western Cape, along with strong asset management from the company, have contributed to the strong year-to-date occupancies and escalation rates.”

The like-for-like contractual income growth was 9.54%, and the like-for-like net property operating profit grew by 9.48%, driven by decreased vacancies and strong in-force escalations and rental reversions. During the interim period, rental reversions improved to +5.35%, indicating positive outcomes in lease renewals and relets.

At the interim period, Spear’s portfolio was valued at R4.22 billion, consisting of 27 high-quality assets, with a total gross lettable area (GLA) of 405,709m². While the period presented several challenges, including increased property operating and management expenses due to the severe impact of storms and record-breaking rainfall in Cape Town between June and August 2024, profitability was marginally impacted by the higher-than-normal repairs and maintenance interventions required.

Management remains laser focused on absorbing these additional costs in the final six months of FY2025. During the interim results presentation, Rossi commended his team for their hands-on, ‘get stuck in’ approach, which he credits as a core element of the company’s culture and a key driver of its success.

The portfolio’s occupancy rate improved by 200 basis points to 95%, with the commercial office sector being a standout performer, seeing over 9,000m² of commercial office space let during HY2025. This resulted in a 616 basis points improvement in commercial office occupancy, indicating a strong return-to-office trend within the Western Cape. The company’s aggressive marketing and leasing initiatives have contributed to these positive outcomes, as management prioritised reducing overall vacancy rates, particularly in the office portfolio.

At the end of HY2025, the overall portfolio vacancy rate had decreased to 4.92%, down from 6.88% in FY2024. This improvement is well below the national average vacancy rates recorded by IPD and SAPOA, further emphasising Spear’s effective asset management strategy.

Spear’s contractual escalations averaged 7.47%, and the weighted average lease expiry (WALE) remained steady at 26 months, providing stability to the company’s income stream.

Spear’s balance sheet remains robust, with gearing reduced to 23.93% from 31.60% in FY2024. This was largely due to the disposal of non-core assets, including the Liberty Life Building in Century City and 142 Edward Street in Tygervalley. These disposals have strengthened the company’s liquidity position and enabled management to allocate capital into strategy aligned Western Cape investment opportunities.

The company has no immediate debt refinancing obligations, thanks to its proactive management of the debt portfolio, ensuring well-staggered refinancing terms and a defensive expiry schedule across its funding partners.

Spear’s rental collections remained strong, with a collection rate of 98.05% for HY2025, reflecting once again, effective tenant management and operational oversight.

In closing, Chetty added, “From a valuation perspective, Spear is trading at an attractive forward dividend yield, while still reflecting a notable discount to its latest reported NAV. The company maintains a robust pipeline of value-creating opportunities, including planned brownfield redevelopments. Spear is steadily becoming a core holding in many property funds, particularly within the small to mid-cap segment.”

 Outlook for FY2025

Looking ahead, management is optimistic about the prospects for the remainder of FY2025 as it integrates the newly acquired real estate portfolio, valued at R1.146 billion, from Emira Property Fund. This follows the announcement via SENS on 23 October 2024, confirming the successful implementation of the transaction. Following this acquisition, Spear’s total portfolio value has increased to R5.36 billion, with a market capitalisation of R3.2 billion.

Rossi added: “We remain focused on executing our strategic priorities for FY2025. With our high-quality portfolio, strong tenant relationships, and active asset management approach, this is an exciting time for the real estate sector and Spear is well-positioned to continue delivering value to our shareholders and stakeholders in the months ahead.”

Rossi concluded the interim results’ presentation by providing full-year distribution guidance, forecasting DIPS growth of between 2% – 4% compared to FY2024, with the payout ratio maintained at 95%. This outlook is supported by key assumptions, including no load-shedding for the remainder of FY2025, reduced vacancies, successful lease renewals, and stable tenant performance in absorbing rising utility and municipal costs.

“Our full-year guidance reflects the strength of our team and portfolio,” said Rossi. “We are confident that, with these positive indicators, we can continue to achieve our strategic objectives for the year.”

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