Linkedin-in
Twitter Linkedin-in

QUICK
LINKS

SA REIT

Growthpoint completes Phase 2 of the Arterial Industrial Estate.

by

Growthpoint’s Logistics Portfolio is Bolstered by Completion of Arterial Industrial Estate, Cape Town 

Growthpoint Properties (JSE: GRT) has reached another milestone in its ongoing strategy to improve the quality of its directly held South African portfolio with the completion of Phase 2 of the Arterial Industrial Estate in Cape Town.

Driving its domestic portfolio enhancement, Growthpoint has strategically grown its logistics and industrial assets from 15% to 20% of the total SA portfolio value in recent years.

At the same time, South Africa’s leading REIT (real estate investment trust) has increased its exposure to modern logistics warehouses, the backbone of Growthpoint’s long-term value creation approach in this sector. Modern logistics properties are and now represent approximately half of the portfolio’s gross lettable area. It is also focusing its investment in better performing, higher demand areas of the country, specifically in the Western Cape and KwaZulu-Natal.

A notable stride in this direction is the recent completion of Phase 2 of the Arterial Industrial Estate in Cape Town, adding quality capacity to the sought-after location. With 21,831sqm of additional lettable space, Phase 2 has added six more warehouse units, ranging from 2,945 square meters to 5,713 square meters, catering to a variety of business needs. Together, both phases of the development represents a nearly R400 million investment from Growthpoint.

The estate is experiencing strong demand, with two of the six units in Phase 2 already snapped up supported by strong tenant interest, highlighting the need for high-quality industrial space in the region. Phase 1 of Arterial Industrial Estate, spanning 19,741 square meters is fully let to top names in national and international industry.

“The completion of Arterial Industrial Estate’s Phase 2, and the good demand and take-up of available space it is experiencing, underscores the value we provide to businesses seeking efficient and sustainable industrial real estate solutions,” says Wouter de Vos, Growthpoint’s Regional Head: Western Cape.

“Growthpoint is reporting strong performance in its logistics and industrial portfolio, fuelled by high occupancy rates and a strategic focus on modern facilities. Our well-let logistics and industrial portfolio demonstrates the increasing demand for modern, strategically located facilities,” says Errol Taylor, Growthpoint’s Head of Asset Management, Logistics and Industrial Property.

Arterial Industrial Estate is strategically positioned in Blackheath, a popular industrial hub in Cape Town, offering exceptional access to key transportation routes, including the R300, N1, and N2 highways, as well as Cape Town International Airport and the region’s seaports. This prime location allows businesses to efficiently connect with both local and global markets.

The estate offers 24-hour security, flexible warehouse and office space, and a commitment to sustainability, including solar panels and a four-star Green Star certification from the Green Building Council of South Africa.

“This project reflects a continued and deliberate pivot toward better-performing, future-fit logistics assets and aligns with Growthpoint’s strategy of targeted investment and divestment, and development,” adds Taylor.

Dipula reports strong interim results as it marks its 20th year

by

Dipula Properties (JSE: DIB) has reported a strong set of interim results for the six months ended 29 February 2025, demonstrating continued strategic and operational momentum in a persistently challenging macroeconomic environment. The property portfolio increased in value by 5% to R10.3 billion, supporting a 6% rise in net asset value. Dipula’s distributable earnings per share (DPS) increased 4.2% for the half year, on track with full year guidance of 4.0% to 6.0%.

Dipula Properties (formerly Dipula Income Fund) is a prominent, diversified South Africa-focused REIT with a long-standing track record of sustainable value creation. As a black-managed property company celebrating two decades of operation this month, and nearly 15 of those as a listed entity, Dipula exemplifies a rare blend of resilience, transformation and consistent delivery that continues to contribute to the real estate sector and South Africa’s broader economic landscape.

The Dipula portfolio includes 161 retail, office, industrial and residential properties across South Africa, predominantly in Gauteng. The portfolio is defensively positioned with retail centres in townships, rural, and urban convenience locations contribute 67% of portfolio income.

Izak Petersen, CEO of Dipula Properties, comments, “Dipula’s operational performance reflects solid delivery and a strongly defensive position in persistently challenging conditions. However, we have felt the impact of higher prevailing interest rates and hedging costs relative to expiring hedge instruments. Encouragingly, we are seeing signs of recovery in the office sector and continued stability in our retail and industrial portfolios, with sustainability initiatives expected to support long-term performance.

Dipula’s revenue for the six months was similar to the prior period at R760 million. Net property income rose 3.0%, constrained by property related expenses, which grew 6.0%, mainly driven by municipal tariff increases. However, cost control remains a management priority, and the total cost-to-income ratio rose marginally to 43.5% (FY24: 42.6%), driven by improved recoveries and Dipula’s solar energy roll-out. The administrative cost-to-income was unchanged at 4%.

Operational highlights included significant leasing activity, contributing to a reduction in overall portfolio vacancies from 8% to 7% during the period. Dipula additionally achieved a weighted average positive renewal rental rate across the portfolio, underpinned by positive rates across the portfolio. The office portfolio recorded a renewal rate of 8.3% followed by industrial at 6.2% and retail at 2.4%. New and renewed leases concluded during the period amounted to R309 million, securing sustainable income streams.

Tenant retention of 79% is lower than in recent periods as Dipula has adopted stricter tenant criteria to improve tenant quality in its industrial portfolio, specifically for mini-units where there is high tenant turnover. Even with this change, Dipula’s industrial vacancies still decreased. Industrial and logistics assets deliver 13% of Dipula’s rental income and with a vacancy of just 4%, this segment remains stable and sought-after.

Dipula’s retail assets remain core to its performance, offering accessible and well-positioned spaces across diverse communities. The retail portfolio reported steady vacancies at 6%.

Offices comprise 16% of Dipula’s income, offering adaptable, well-situated workspace. The office vacancy rate ended the period at notably lower at 19%, down from 23% in the prior interim period, showing clearer signs of recovery starting. “The office improvement is refreshing, however there is still some way to go, and the Johannesburg office market remains oversupplied and highly competitive.”

Dipula has telegraphed to the market that it intends to sell its affordable and conveniently located residential rental units, which currently represent 4% of income. This is to re-allocate capital to the retail and industrial sectors that are core to its business. This portfolio showed a reduced vacancy rate from 10% to 9% over the six months.

Dipula continues to implement value-enhancing asset management strategies. It invested R117 million in refurbishments and redevelopments. Nearly R70 million of this was for income-generating projects, including solar PV, with the remainder allocated to defensive projects. A portion of the proceeds from R125 million in disposals, achieved at a 4% premium to book value, contributed to funding these projects together. While no acquisitions were completed during the period, Dipula has a strategic pipeline of growth opportunities.

“We’re firmly committed to future-proofing our portfolio,” says Petersen. “We are assessing some interesting opportunities which fall within our core focus, a few of which we hope to close in the short-term. Dipula’s installed solar capacity will more than double to approximately 16MW after the instillation of an additional 9MW of new solar projects to be rolled out during this calendar year.”

Dipula benefits from a strong balance sheet and has maintained prudent debt levels. Gearing was stable, at 36.3% compared to 36.1%, and a steady ICR of 2.8 times at the end of the period reflect a consistently well-managed balance sheet. R400 million in undrawn facilities provide additional liquidity.

Commenting of the operating environment in the second half of Dipula’s financial year, Petersen notes that global uncertainty has intensified amid shifting US trade policies and ongoing tariff disputes, which are expected to place upward pressure on inflation and interest rates. Domestically, South Africa faces persistent fiscal, economic and service delivery challenges, with subdued confidence and higher than anticipated interest rates.

“At Dipula, we remain focused on executing our strategic priorities: driving operational efficiency, optimising our tenant base and recycling capital to reinforce balance sheet resilience.” says Petersen.

Redefine strengthens position in uncertain market

by

Redefine strengthens position in uncertain market, eyes future upside

Johannesburg, 12 May 2025 – Redefine Properties, a leading South African Real Estate Investment Trust (REIT) with a diversified portfolio locally and in Poland, has reported solid financial results for the six months ended February 2025. The company’s core operating segments delivered organic growth, underscoring the efficiency, durability and quality of its asset platform.

Profitability continues to improve across all regions, driven by improved occupancy levels and disciplined cost management. The group-wide net operating profit margin rose to 76.9%, up from 76.5% in the comparable period, with South Africa at 79.1% and EPP core (Poland) at 77.2%. EPP’s core occupancy reached a near-full 99.2%, while local occupancy also showed steady improvement, signalling the resilience of the leasing market despite ongoing rental pressures – particularly in the local office sector.

Reflecting on the past five years, CEO Andrew König described the period as “a game of snakes and ladders,” shaped by successive global shocks – from COVID-19 to energy crises, warring conflicts, interest rate hikes, and more recently trade tensions. These disruptions have heightened uncertainty, undermining capital market stability and unsettling business confidence that property cycles rely on.

“Despite this, Redefine continues to emerge stronger, reshaping itself to capitalise on the upside to thrive amid complexity,” said König. “Our half-year results reflect measurable improvement, an opportunity-led strategy, and a well-capitalised balance sheet that positions us to weather volatility and drive long-term value creation.”

Some of the notable highlights during the half-year period include an improvement in Redefine’s loan-to-value (LTV) to 41.2%, moving closer to the targeted 38-41% range. A key contributor is the ongoing simplification of the Polish joint ventures – a strategic priority aimed at lowering LTV, reducing equity risk, and alleviating high finance costs. “Disposing of select joint venture interests would free up capital to reduce debt or reinvest into core assets, both of which support earnings and reduce equity risk,” said König.

Debt strategy delivers stability amid shifting macro conditions

 Chief Financial Officer Ntobeko Nyawo said Redefine successfully refinanced the majority of its R3.5 billion in maturing debt in FY2025, with only R500 million remaining. The group’s liquidity position improved to R6 billion from R4.8 billion at 31 August 2024, with ample reserves to cover maturities through to 2026 – a strong buffer as trade-related tariff wars play out.

He noted that 77.6% of total debt is hedged for an average tenor of 1.1 years and the maturity weighted average term of debt is healthy at 3.4 years. Moody’s reaffirmed Redefine’s Ba2 rating with a stable outlook, supporting continued access to debt capital markets. “Our proactive approach, including the successful issue of R2.1 billion in bonds this period, reflects the strength of our debt funding relationships,” said Nyawo.

Industrial and retail outperform, office under pressure

 According to Chief Operating Officer Leon Kok, Redefine’s operational performance reflects its sustained focus on efficiency, asset quality, and tenant retention. In South Africa, overall portfolio occupancy improved to 94.7%, with the industrial sector achieving standout results – just 1.1% vacancy, lease renewal reversions of 4.6%, and high tenant retention, all driven by active asset management.

The retail sector also showed a positive turnaround, recording the first positive lease renewal reversion in over three years at 0.4%, indicating improving tenant sentiment and the strength of dominant, well-located centres.

By contrast, the office portfolio remains challenging due to a national oversupply and constrained rental growth which places pressure on renewal reversions. However, nodes like Rosebank and parts of the Western Cape are seeing strong demand for P-grade space. Kok noted that economic growth and political stability, along with clearer interest rate direction, would be key to unlocking rental growth in the office market.

Redefine has also made major progress in its renewable energy drive. “We increased our installed solar PV capacity by 20% during the period to 52 MWp, and we’re targeting a further 25% increase – around 13.3 MW – over the next 6 to 12 months,” said Kok. “This will bring our total installed capacity to over 64 MWp, in line with our commitment to reduce reliance on the national grid and drive long-term sustainability.”

Strategic progress in Poland underpins diversified growth

 In Poland, Redefine’s EPP core retail platform maintained an exceptional occupancy of 99.2%, with a healthy rent-to-sales ratio of 9.1%, indicating sustainable tenant health and rental affordability.

Redefine’s Polish logistics platform (ELI), co-owned with Madison, is progressing with a planned portfolio division and revised shareholders agreement, which is expected to be finalised by June. Vacancy in this portfolio is projected to decline from 6.6% to 3.5% by June, thanks to recent leasing activity.

In addition, Redefine is advancing its self-storage platform in Poland, with 10,000 sqm of net lettable area currently under development and 38,000 sqm under consideration. The initial €50 million equity commitment is being deployed into these developments, and the company is actively seeking a co-investment partner to match this with an additional €50 million in capital.

Capitalising on opportunities to enhance relevance

 Redefine reaffirms its distributable income per share guidance of 50-53 cents for the period and expects to maintain a dividend payout ratio within the 80-90% range. The company’s strategic focus remains firmly on disciplined capital allocation, simplification of joint ventures, organic growth, and operational efficiency.

“We are not chasing expansion for its own sake,” concluded Konig. “Our goal is to enhance the quality and performance of our current portfolio, maintain liquidity, and continue creating long-term value for our stakeholders. The recent sale of Power Park Olsztyn in Poland, increased ownership in Pan Africa Mall from 51% to 68%, and the completion of its second expansion phase are all examples of how we are optimising our asset base.”

Looking ahead, the group remains focused on harnessing technology as an enabler of more efficient operations and value creation.

Vukile completes R141 million redevelopment of Bedworth Centre

by

Vukile Property Fund (JSE: VKE) has completed the R141 million redevelopment of Bedworth Centre in Vereeniging, delivering a high-convenience, community-focused retail destination.

“As a centre of growth, we invest in our portfolio using deep local insight and data analytics that support our shoppers’ experience and retailers’ success,” says Laurence Rapp, CEO of Vukile Property Fund. “The transformation of Bedworth Centre is more than just a physical upgrade, it’s about creating an ecosystem that serves everyone in the value chain, from our investors to our retailers, from our customers to our broader stakeholder communities.”

The Bedworth Centre redevelopment combines enhanced aesthetics and amenities with meaningful upgrades to layout, access and security. Using proprietary customer analytics, the revamp was tailored to ensure the centre remains a cornerstone of convenience and connection for Bedworth Park, including the Vaal University of Technology (VUT) and North West University (NWU Vaal Campus), as well as the South East (SE) and South West (SW) suburbs, the greater Sharpeville, Bopelong and the surrounding growing population.

“At Vukile, our approach starts with understanding the communities we serve. By integrating data with deep local insight, we craft tenant mixes that resonate with the unique needs and aspirations of people in the area. The result is retail that is aligned with daily life. Our retail spaces don’t just exist in communities; they evolve with them,” says Itumeleng Mothibeli, MD SA at Vukile Property Fund.

At the heart of the redevelopment is the introduction of two national grocery anchors, Boxer and Shoprite, both of which opened in late 2024 adding tremendous variety and choice to the local retail experience. These additions, alongside an expanded and diversified retail offering, position Bedworth Centre as the dominant convenience retail hub in the area.

“Thriving retail centres uplift the communities they serve. They provide accessibility, dignity and economic opportunity. This redevelopment reaffirms our commitment to building vibrant, enjoyable spaces that resonate with and reflect their communities. With new anchors and a curated tenant mix, Bedworth Centre is sustainably positioned for the long-term,” adds Mothibeli.

Revamped retail with local relevance and national brands

The updated tenant lineup spans essential goods, services and aspirational retail. Shoppers now benefit from an enriched variety of food, fashion, homeware and lifestyle offerings all under one roof.

New additions to the centre include Shoprite, Boxer, Hungry Lion, Big Joe Pies, Fish & Chips Co, Factory 88, Jam Clothing, Bellama, Blooming Beauty, Pep Home, OK Furniture and Volpes.

A standout feature of the new retail mix is Pepkor Group’s Home.Tech.Sleep concept store, the second of its kind to open in South Africa. Spanning 1,570sqm, it is a one-stop destination for integrated home solutions.

Even more national brands opened their doors in early this year, coinciding with the official launch of the updated centre in April 2025, including Sportscene, Kreme Beauty Lounge, Cash Crusaders, Home Décor Villa, with Shoprite and Boxer Liquor expected to open soon

Integrated community convenience

Further elevating Bedworth Centre’s role in the local ecosystem is the addition of a SARS Client Service Centre, located adjacent to the main parking area. This public-private synergy brings critical government services closer to residents and enhances the centre’s appeal as a holistic service destination.

“The redevelopment of Bedworth Centre is a shining example of Vukile investing with intent,” concludes Rapp. “It’s how we drive performance in our portfolio, partner effectively with our retailers and contribute meaningfully to the communities we serve.”

 

Spear REIT’s new Independent Non-Executive Director

by

Spear REIT welcomes Joan Solms as Independent Non-Executive Director

Spear REIT Limited (JSE: SEA), a leading real estate investment trust with a dedicated focus on the Western Cape, has announced the appointment of Joan Solms to its board. A distinguished professional in the property industry, Solms joins as an independent non-executive director and member of the audit and risk committee, effective 1 April 2025.

Solms brings significant experience in banking and financial services, particularly within the property sector. A qualified chartered accountant with over two decades of expertise in property and investment banking, she has held several high-profile leadership roles; most recently serving as executive vice president of Standard Bank’s corporate and investment banking division, where she led the Western Cape real estate finance division until November 2024.

Prior to that, Solms served as executive director and chief operating officer of Ingenuity Property Investments Limited, a JSE-listed property investment company. Recognised for her exceptional contributions to the South African property industry, she was named Women’s Property Network’s Professional of the Year in the private sector in 2017.

Commenting on the appointment, Quintin Rossi, CEO of Spear REIT, said:

“We are honoured to welcome Joan to the Spear board. She is a highly respected expert in her field, and her vast experience in the Western Cape property market—particularly in financial services and banking—will add significant value to our team. This appointment comes at a crucial time in Spear’s growth trajectory, and we are excited to have someone of Joan’s calibre join us on this journey.”

Solms reflects on her appointment as a full-circle moment, recalling one of her earliest major banking transactions – assisting the founders of Spear with their initial funding.

“It’s remarkable to see how far Spear has come since those early days. I fondly remember my time at Nedbank in 2011 when I facilitated their initial funding, long before their JSE listing in 2016. Spear’s ethos and commitment to fostering a culture of goodwill, particularly in developing and empowering women in the property sector, resonate deeply with me. I am looking forward to contributing to the company’s continued success.”

Solms’ appointment highlights Spear’s unwavering commitment to maintaining a Board of Directors that are dynamic and experienced professionals with top-tier industry expertise as it continues to expand its presence in the Western Cape real estate market.

Burstone Group trading update for the year ending 31 March 2025

by

Background

Burstone is a fully integrated real estate investor, fund and asset manager that has c.R42 billion gross asset value (“GAV”) under management and c.R25 billion third-party assets under management (“AUM”). Approximately 69% of the Group’s GAV is offshore, across western Europe and Australia. The Group’s AUM is set to increase in the short to medium term as the Group executes and grows its fund management platforms.

Strategic highlights

The Group has made significant progress over the past year in executing its stated strategy and growing its fund and asset management platforms.

  • Total third-party AUM grew from R8.9 billion to c.R25 billion with total fee revenue expected to comprise c.11% of earnings (Mar-24: 7.3%).
  • Europe:
    • Strategic partnership between the Group’s Pan European Logistics (“PEL”) portfolio and funds managed by affiliates of Blackstone Inc (“Blackstone”) (“the Blackstone transaction”) completed on 12 November 2024. The transaction has launched Burstone’s European funds and asset management strategy.
    • Burstone retains a 20% co-investment in PEL and retains the asset management of the c.€1 billion PEL portfolio.
  • Australia:
    • Irongate continues to provide a strong platform for Burstone to grow its fund management activities in Australia.
    • During the year, Irongate established an industrial platform with TPG Angelo Gordon, a global diversified credit and real estate investing platform within TPG, with approximately US$91 billion assets under management.
    • The new industrial platform has already concluded the acquisitions of A$280 million of industrial logistics assets in New South Wales and Queensland, deploying approximately A$133 million of equity into four Burstone’s equity investment into this platform, alongside TPG Angelo Gordon, is c.A$20 million (15%).
    • Irongate now manages c.A$625 million of equity across office, industrial, retail and residential assets from last year for some of the world’s leading real estate investors (Ivanhoe Cambridge, Phoenix Property Investors, Metrics Credit Partners and TPG Angelo Gordon). AUM has grown 28% over the period.
  • South Africa:
    • Burstone has made significant progress with a cornerstone investor to seed and then build to scale a South African focused diversified real estate platform (“SA Core Plus platform”). All material due diligence is now complete subject to various investment approval processes.
    • Burstone is targeting implementation of the SA Core Plus platform on the following basis:
      • Burstone to seed the platform with up to c.R5 billon of South African retail and industrial assets that fit within the investment mandate.
      • Burstone is expected to retain a significant equity interest in the SA Core Plus platform, which proportion of equity should naturally reduce over
      • A target LTV of 40%.
      • Burstone will act as a fund and asset manager of the SA Core Plus
    • The launching of the platform is anticipated before the end of the calendar Shareholders will be kept informed as key milestones are achieved.
  • Maintaining a robust balance sheet:
    • De-gearing and loan to value (“LTV”):
      • Post the implementation of the PEL strategic partnership with Blackstone, the Group settled debt of c.R5 billion.
      • Disciplined and continued capital recycling resulted in South African asset sales of approximately R0.9 billion in FY25.
      • Funding of capital expenditure and further investment into Australia, alongside TPG Angelo Gordon, partially offsets the reduced gearing impact of the Blackstone transaction and South African sale of assets.
      • The Group expects its LTV to be between 34% and 36% for
    • Successful refinancing of R6.6 billion of Group ZAR and EUR debt in August 2024 that has improved margins, extended the debt profile and provided greater flexibility with respect to sales and facility settlement.

Overall Group performance

  • The Group is expected to deliver full year results in line with previous full year guidance provided of approximately 2% to 4% lower than the 2024 financial year (“FY24”). This would deliver FY25 distributable income per share (“DIPS”) of between 101.44cps and 103.56cps (FY24: 105.67cps).
  • The dividend payout ratio is expected to be in line with the interim period (i.e. 90%), resulting in an expected increase in dividends per share of between 2% to 4% compared to FY24.
  • Key elements which have underpinned the Group’s performance:
    • The South African base like-for-like (“LFL”) net property income (“NPI”) is expected to be in line with the prior year, reflecting a resilient retail performance which is offset by declining growth in the office portfolio which continues to be impacted by negative
    • The European business is expected to deliver a marginal increase in LFL NPI mainly driven by positive rental reversions and indexation.
    • Group fee income is expected to grow significantly over the period, driven by European and Australian fund and asset management activity, resulting in fee income representing approximately 11% of earnings (FY24: 7.3%).
    • The Group has continued to focus on cost optimisation initiatives with operating costs expected to increase by between 1% and 2%.
  • Group net interest costs are expected to decline significantly, impacted by:
    • Proceeds from the Blackstone transaction and proactive refinancing efforts that have reduced the all-in cost of debt;
    • Partially offset by further investment in the Group’s Australian platform and maintenance capital expenditure in South Africa; and
    • The c.R0.9 billion in South African asset sales at a c.2.5% discount to book value, that led to net interest savings and contributed to a lower LTV ratio. However, the transactions were earnings dilutive.
  • The Blackstone transaction, which was effective from 12 November 2024, is expected to be marginally accretive on the Group’s results in FY25.

Performance of the South African business

  • LFL base NPI for the South African portfolio is expected to be in line with the prior
  • Total average vacancies across the portfolio are expected to increase to 5.5% (Mar-24: 4.2%) driven by a large industrial asset that became vacant in the second half of the year.
  • Total reversions over the period are expected to improve to negative c.5% (Mar-24: negative 3%).
  • The retail sector continues to deliver positive NPI growth, however, results have been impacted by the redevelopment of Zewenwacht Mall and associated vacancy linked to the introduction of a new second anchor.
  • The office sector continues to face negative reversions of c.20% (Mar-24: negative 6%) and average vacancies of c.8% (Mar-24: 6.4%).
  • The industrial sector has experienced strong letting activity with overall reversions of negative 5% driven by long dated leases of negative 17%.

Performance of the European business

  • The performance of the PEL platform is expected to deliver a positive LFL NPI growth mainly driven by positive rental reversions (c.13%) and indexation (c.4%), partially offset by higher average vacancies of c.4% (Mar-24: 1%).
  • Burstone has decided not to pursue the co-investment opportunity in the German light industrial platform. As such, the third-party management contract ended in December 2024.

Performance of the Australian business

  • The Group’s investment in Irongate continues to perform well, benefiting from the significant

growth in AUM and underlying real estate performance which is in line with the deal thesis.

  • The Irongate Group is well positioned to capitalize on a strong pipeline of
  • Irongate’s co-investment in the industrial platform with Phoenix Property Investors is performing well. The latest valuation shows a c.11% increase in asset value, driven by positive rental reversions and full occupancy, highlighting the platform’s strong leasing performance.

Proactive balance sheet management and successful debt refinancing

  • Successful refinancing of R6.6 billion of Group ZAR and EUR debt in August 2024 that further improves the Group’s funding and liquidity profile.
  • The PEL portfolio was successfully regeared and refinanced post the Blackstone transaction, extending the debt tenor in the platform to 5 years.
  • As at the date of this announcement, the Group holds R2 billion in undrawn committed available facilities and cash, excluding proceeds from disposals that have yet to be completed.
  • The Group remains well-hedged, covering over 90% of its interest rate exposure at rates below current market levels.
  • The Group’s investment in PEL has been hedged at 100% through a combination of Euro debt and Euro cross currency interest rate swaps (“CCIRS”) following the strategic partnership.
  • The Group’s investment in Australia is also 100% hedged AUD/ZAR via CCIRS in line with the Group’s policy.
  • The Group has R13 billion direct on-balance sheet property investments and c.R2.4 billion equity investments in fund management platforms.

Concluding remarks

The Group’s real estate portfolio is performing as expected and in line with guidance. Strategically the Group is pleased with the progress made across the business, notably in:

  • De-gearing the balance sheet, reducing LTV significantly;
  • Establishing a funds management business in Europe;
  • Driving solid AUM growth in Australia;
  • Advancing exclusive negotiations in South Africa to develop a fund management strategy;
  • Capitalizing on the internalisation, making strong strides in leveraging the Group’s platforms, processes, skills, and expertise across regions; and
  • Successfully refinancing debt while maintaining prudent balance sheet

The Group will continue to focus on the recycling of direct on-balance sheet investments and using the proceeds to co-invest in fund management platforms, which will result in a significant increase in third party funds under management.

Expanding the Group’s fund and asset management model offers multiple benefits for Burstone, particularly the ability to achieve enhanced integrated real estate returns. This approach combines traditional real estate asset yields with additional upside from operating a funds, investment, and asset management model, where the Group can earn management, leasing, and acquisition fees, as well as potentially generate performance fees through outperformance.

This hybrid model of traditional real estate investment, integrated with expertise across fund management, investment management, asset management and development management supports the Group’s strategy of delivering enhanced returns on capital deployed and maximising operational leverage from its scalable platform.

The year ahead offers great opportunity for the Group as it looks to execute and grow the fund and asset management platforms.