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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.

Redefine signs 37 GWh renewable energy wheeling agreement

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Redefine Properties signs 37 GWh renewable energy wheeling agreement with NOA Trading 

Redefine Properties, one of South Africa’s largest property groups, has signed a renewable energy supply agreement that will meet a significant portion of its total Eskom-connected electricity requirements from renewable energy sources. This agreement, signed with NOA supports Redefine’s decarbonisation efforts through wheeling, while also enabling significant energy cost savings for the JSE listed property company.

With a municipal wheeling solution between the parties to follow as a second phase of the engagement, the initial agreement focuses on Redefine’s Eskom-connected premises across multiple property locations.

“Future-proofing our assets is central to Redefine’s strategy, and this agreement plays a key role in that. By securing renewable energy at scale through wheeling, we’re not only reducing emissions and controlling costs but also building resilience across our portfolio,” said Scott Thorburn, National Asset Manager Commercial at Redefine Properties.

Redefine will receive a carefully crafted blend of renewable energy at 11 of its Eskom-connected properties, ensuring a high level of renewable energy penetration while providing the flexibility to reallocate energy between locations. The agreement will supply 37 GWh per year over a 20-year period, reducing CO₂ emissions by over 39 000 tonnes annually.

NOA, as an integrated renewable energy utility, will source the energy from both third-party Independent Power Producers (IPPs) and its own generation facilities. The aggregated energy will then be allocated to the property group’s designated premises. Most notably, one of the sites that will be supplying Redefine is the Khauta Solar PV project, located near Welkom, Free State. The generation facility is expected to be one of the largest Solar PV sites in South Africa.

“NOA’s bespoke energy products are ideal for property sector customers. By allowing energy reallocation between multiple locations across South Africa, we ensure high renewable energy penetration while limiting the risk of customers paying for unused energy,” said Karel Cornelissen, CEO, NOA.

SOLINK Energy Brokers, a wheeled energy specialist, analysed Redefine’s energy needs and sustainability goals, sourced NOA as the ideal supplier, and supported the deal through to signature.

This agreement underscores the critical role of energy traders and aggregators in supporting the decarbonisation of the property sector, where rooftop and onsite energy solutions often have limitations.  By providing tailored renewable energy solutions, NOA enables large-scale property groups to structure both commercially accretive and environmentally compelling energy agreements.

“The property sector is a key growth area for NOA, offering solutions that can achieve over 80% renewable energy penetration through a phased supply framework,” concluded Cornelissen.

 

Burstone Group FY25

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A year of strategic transformation delivers strengthened balance sheet and new revenue opportunities.

Burstone Group today announced full-year (FY25) results in line with guidance, reporting significant progress in the roll-out of its funds and asset management strategy during a year of accelerated strategic transformation.

Following an internalisation process which was concluded in 2023, Burstone Group has established itself as a fully integrated international real estate business and built a hybrid model of traditional real estate assets stapled with a fund and asset management model to drive enhanced returns.

During the financial year the business strengthened its balance sheet, reducing LTV from 44% to c.36% while maintaining stable operations across South Africa, Europe and Australia.

Burstone Group CEO, Andrew Wooler said:

“The building blocks are in place. We have a sound balance sheet and have built a solid foundation from which to grow.”

Results for the period ended 31st March 2025 were in line with expectations:

  • Cash dividend up 1% to 92.22cps (Mar 24: 89.46cps),
  • Distributable earnings per share (“DIPS”) down 0% to 102.5cps (March-24: 105.7cps)
  • Like-for-like Net Operating Income (NOI) up 2% in SA and up 0.5% (in Euros), respectively.
  • Fee revenue grew by 40% amounting to 10.7% of distributable earnings (Mar-24: 7.3%).
  • Third-party assets under management (“AUM”) increased 6 times to c.R23.4 billion. Burstone Group CEO, Andrew Wooler, continued:

Our results clearly reflect the significant strides we’ve made in the strategic transformation of the business and positioning ourselves for long-term growth. These efforts have given us a solid foundation to navigate an operating environment that remains complex and requires thoughtful, disciplined execution. Given the strength of our pipeline and the momentum we are seeing, we are confident that the next 12 to 24 months will be an exciting and pivotal period for the business.”

Burstone concluded several transformative transactions during the period.

The deals included the formation of a strategic partnership with Burstone’s Pan-European Logistics (PEL) platform and Blackstone, the world’s largest alternative asset manager, with Burstone taking the role of asset manager of the portfolio and retaining a 20% investment in the platform.

Burstone Group’s Australian joint venture (JV) with Irongate Group has entered into a strategic agreement with TPG Angelo Gordon, establishing a new industrial programmatic JV in Australia. This partnership has already completed a series of acquisitions, further advancing Burstone’s industrial and logistics fund management strategy in the region. TPG Angelo Gordon, a diversified credit and real estate investing platform within TPG, brings the backing of one of the world’s leading alternative asset management firms.

South Africa Performance

Burstone’s South African portfolio is mature and stable, and supported a sustainable level of earnings with effective capital recycling executed. The portfolio showed a marginal increase in base LFL NOI of+0.2% YoY.

The South African macroeconomic backdrop has improved. The property sector faces challenges, but there are signs of marginal improvements in the region.

  • Strong letting across the portfolio with notable long dated leasing and early renewals in industrial sector
  • Negative reversions persist, particularly in the office sector, but significant improvement year- over year.
  • Disciplined cost
  • Maintained a stable WALE of 0 years.
  • Concluded sales of R1.0 billion at c.2.5% discount to book value.
Pan-European Logistics (PEL) Portfolio

The Group’s PEL’s performance was driven by a strong, defensive portfolio that has consistently benefited from favourable sector dynamics.

  • 5% base LFL NOI growth in Euros (Mar-24: 6.2%) with growth in contracted rent offset by an increase in vacancies.
  • Blackstone transaction successfully completed on 12 November
  • Strategic launch of Burstone’s European funds and asset management
Australia Performance

Burstone’s Australian operations saw a significant increase in equity AUM to $624 million (up 27% YoY) and solid growth in fee revenue (up 16.7% YoY) while the Irongate Group), remains well positioned to capitalise on a strong pipeline of opportunities.

  • New industrial platform with TPG Angelo Gordon: A$280 million of industrial logistics assets in New South Wales and Queensland. Burstone’s equity investment into this platform, alongside TPG Angelo Gordon, is c.A$20 million (15%).
  • Co-investment with Phoenix Property Investors is performing well, with the Smithfield asset value up c.11% driven by rental uplifts and full occupancy.
  • To date, Burstone have deployed c.A$52 million /R0.7 billion alongside capital partners in the

Wooler commented on the Group’s Australian performance:

“Australia is a good case study of what we’re replicating in SA and Europe. The acceleration of earnings we’re seeing coming out of Australia is proof that our model works. We are adding more partners, we’re putting more equity in, and in the years to come, we will see the flywheel turning with greater acceleration.”

Prospects and guidance

Ongoing global uncertainty and volatility are slowing capital deployment, reinforcing a cautious outlook and supporting measured growth expectations over any near-term boom.

The Group foresees anticipated earnings growth of 2% to 4% for FY26, driven by quality assets, platform scalability, and ongoing strategy execution.

  • Active portfolio management: Continued focus on asset recycling, cost efficiency, and capital expenditure to maintain portfolio quality.
  • South Africa outlook: Modest earnings growth expected, led by retail; office remains challenging albeit with improving metrics; while industrial shows positive momentum.
  • European expansion: Strategic partnership with Blackstone launched the European funds platform. The PEL portfolio will continue to benefit from positive rental reversions, albeit that the occupier market is The Group will focus on creating and executing new platforms and strategies.
  • Australian growth: Strong performance expected ahead, with solid investment income growth expected and Australian management earnings set to at least double.
  • In closing Wooler said:“We are pleased with the progress made across the business and we believe that our integrated international hybrid business model will be a key differentiator as we continue to implement our strategic plan over the next few years.”

 

Emira delivers exceptional full-year results

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Emira delivers exceptional full-year results with robust fundamentals underpinning its strategic pivot 

Emira Property Fund (JSE: EMI) reported a strong set of results for its full year ended 31 March 2025 highlighting consistent strategic execution, accretive diversification and disciplined capital management. The company declared a cash-backed final dividend of 61.50cps, taking the full year dividends to 123.89cps, 5.9% higher than the prior year. Its full-year distributable income per share increased by 4.9%. Emira’s net asset value per share surged by 20.9% over a busy year that delivered exceptional results, improved operational metrics and a substantial repositioning.

All Emira’s key metrics improved, with its South African assets delivering steady outperformance and the US portfolio remaining robust. At the same time, it achieved meaningful portfolio restructuring and strengthening, with a strong entry into the Polish real estate market.

Through a synchronised asset rotation focus, Emira traded out of R2.8bn of non-core assets in South Africa, where it had a further R628.3m of sales under contract at year end. It simultaneously redeployed approximately R2bn (EUR100m) of proceeds into its international strategy, successfully concluding two tranches of investment in DL Invest, with the balance reducing debt. This strategic capital allocation enhances Emira’s diversification by adding exposure to Poland’s growing economy, supported by strong consumer demand, ongoing infrastructure investment and sound macroeconomic fundamentals.

International investments now comprise 38% of Emira’s portfolio, with 16.6% in the US and 21.2% in Poland. The real estate investment trust’s (REIT’s) sectorally and geographically diversified portfolio of direct and indirect property investments supports consistent returns through varying market cycles.

“Emira achieved a major restructure while maintaining and improving our balance sheet strength. The business remains well-capitalised with a prudently managed financial position that is comfortably within all covenants,” says Greg Booyens, CFO of Emira Property Fund.

Interest cover improved to 2.5 times and the loan-to-value ratio improved to 36.3% from 42.4%. GCR reaffirmed Emira’s long-term and short-term credit ratings of A(ZA) and A1(ZA) respectively, with a stable outlook, reflecting a diversified funder base and trusted funding relationships.

Emira’s South African direct property portfolio comprises 63 assets, valued at R9.96bn. The portfolio’s fair market value, adjusted for disposals, increased 6.1%. The commercial portfolio comprises 42 properties balanced across office (22%), urban retail (46%) and industrial (13%). The residential portfolio (19%) comprises 3,347 units across 21 properties, including properties owned by Transcend Residential Property Fund, a wholly owned subsidiary focused on quality, value-oriented suburban rental units.

Ulana van Biljon, COO Emira Property Fund, “We are pleased to report excellent performance across our South African direct property portfolio. While economic headwinds and soft property fundamentals have delayed real rental growth, recent improvements in the operating environment are encouraging. Reduced load shedding and greater political clarity created by the Government of National Unity are bolstering business confidence, which supports the performance of both the commercial and residential property sectors. This reflects in the occupancy metrics of the South African direct portfolio, which continued to trend favourably.”

Commercial vacancies decreased from 4.1% to 3.6% post period, improving from a fleeting increase to 6.4% at year-end caused by a single industrial tenant relinquishing and then reoccupying its space. Vacancies in all sectors were well below national sector benchmarks, signalling sustained tenant demand for Emira’s properties and effective leasing strategies. Office vacancies reduced from 10.9% to 8.4%. Retail vacancies remained low at 4.2% and the industrial portfolio vacancies reduced to 0.5% post period from 0.7%.

Residential portfolio occupancies remained high at 97.2%, excluding units for sale, with solid underlying demand supporting performance and contributing to consistent, modest rental growth.

Emira invested R177.2m in targeted upgrades, energy efficiency projects and refurbishments to reinforce tenant retention and attraction. “These investments are undertaken to enhance asset competitiveness and support operational efficiency, as well as to improve resilience against the impact of weakening municipal service delivery,” notes van Biljon.

Internationally, Emira invests indirectly through equity interests alongside specialist co-investors. In the United States, it holds stakes influential stakes, ranging between 45% and 49%, in dominant, grocery-anchored centres with US-based partner The Rainier Group. In Poland, Emira has a 45% equity interest in DL Invest Group, a Luxembourg-headquartered company developing and managing logistics hubs, mixed-use offices and retail parks across the country.

In the US in December 2024, Emira and its co-investors successfully sold San Antonio Crossing, a centre that had reached peak performance, at an 8.87% premium to book value. The US portfolio closed the financial year with 11 investments, which traded well supported by the continued resilience of the US retail real estate sector. These assets totalled R2.7bn (USD145.4m) and delivered R235.1m in distributable income (FY24: R222.6m for 12 investments).

Emira’s US investments continued to demonstrate strength, supported by stable occupancy levels and consistent tenant demand, even in the face of broader economic volatility, with reported vacancies of 4.6% (FY24: 3.6%) and a weighted average lease expiry of 4.2 years (FY24: 5.0 years).

In August 2024, Emira acquired an initial strategically structured stake in DL Invest and completed a second tranche of investment on 20 March 2025, taking its total equity interest to 45%. Emira’s investment is structured for an attractive return profile, including an annual cash yield of 7.2%, escalated annually by the Harmonised Index of Consumer Prices (HICP) for the European Area, but subject to a cap of 4% and a floor of 2%.

When Emira closed its financial year, DL Invest held a portfolio of 39 completed properties, valued at EUR689m. The portfolio comprises 67% industrial and logistics assets, 22% mixed-use/office assets and 11% retail parks. The portfolio has a total vacancy of 3.1% and a stable weighted average lease expiry of 5.5 years. It also includes land and development assets of EUR173m providing a pipeline for future growth.

Building on a pivotal year from a healthy operational and balance sheet position, Emira will continue to execute disciplined capital recycling strategy and strategically redeploy the proceeds into higher-yielding, value-accretive opportunities. With a strong foundation, disciplined execution and a clear strategy, Emira is positioned to sustain and grow value for investors.

At the same time as reporting results, Emira announced that James Day, currently a non-executive director of Emira, has been appointed Chief Executive Officer with effect from 1 July 2025.

Day, who joined the Emira board on 1 October 2023, brings extensive international and local experience in the listed property sector, including key expertise in raising and negotiating financing arrangements, along with a strong track record in strategic execution and transaction structuring, with various prior financial management and audit roles in South Africa, the United States and Australia. Emira’s board advised that Day’s proven financial acumen and leadership capabilities position him well to guide Emira in its next phase of growth and development. Prior to this appointment, Mr. Day held senior roles in the property sector both in Australia and South Africa, most recently serving as Financial Director at Castleview Property Fund Limited

Spear REIT acquires Berg River Business Park in Paarl

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Spear REIT has announced the acquisition of the Berg River Business Park, a 30,000m² multi-let industrial park in Paarl, Western Cape.

The acquisition value is recorded at R182,150,000, with an initial yield to the Spear platform of 9.35%. The transaction will be settled via a Section 42 asset-for-share arrangement, with the sellers receiving the full value of their equity in Spear shares.

Located at 46 Distillery Street, along the Berg River in the Drakenstein Municipality, the Berg River Business Park serves a mix of tenants across the food, agriculture, wine, and clothing sectors. The area forms part of a growing industrial node in the Western Cape and benefits from its proximity to the N1 highway, enhancing logistical efficiency for its tenants.

Key Features of Berg River Business Park:

  • Strategic Access: Proximity to major routes, including Lady Grey Street and the N1 highway.
  • Security Infrastructure: The park features 24-hour security, CCTV surveillance, and electric fencing.
  • Energy Efficiency: This includes solar power generation capacity, reducing energy costs, and reducing environmental impact.
  • Operational Resilience: Offers a power supply capacity of 3,500 kVA and full load-shedding redundancy.
  • Connectivity: Equipped with high-capacity fibre-optic infrastructure.
  • Flexible Industrial Space: Units designed with high clearance, modern amenities, and ample yard areas to support various operational requirements.

Commenting on the acquisition, Quintin Rossi, CEO of Spear REIT, said: “One of the advantages of Spear’s Western Cape focus is that the entire province presents investment opportunities. This high-quality acquisition marks our entry into the Paarl real estate market and our first investment in the well-established industrial node of Paarl Industrial. We are very pleased with the asset type, the tenant mix, and the solid rental growth prospects that this food and agri-logistics park brings to the core Spear portfolio.”

The acquisition marks Spear’s continued strategy to grow its portfolio in high-performing nodes across the Western Cape, with a particular focus on assets that offer income resilience and long-term capital appreciation potential.