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Portfolio growth

Emira’s capital recycling supports half-year gains

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Emira Property Fund (JSE: EMI) reported a stable set of results for the six months ended 30 September 2025 reflecting consistent strategic execution and disciplined capital allocation toward higher-yielding, value-accretive opportunities.

 Emira declared a cash-backed final dividend of 64.40cps, 3.2% higher than the prior half year. Its net asset value per share increased 1.4% over the six-month period that saw the company make measurable progress on each of its key objectives and deliver improved operational metrics. The half-year results indicate that Emira continues delivering long-term value for all stakeholders.

James Day, CEO of Emira Property Fund, credits the positive results to the steady outperformance of Emira’s South African assets, supported by a stable and gradually improving environment, driven by steady interest rates, reduced load shedding and moderate inflation. Additionally, its US portfolio remains robust, and Emira’s strong entry into the Polish real estate market is yielding returns.

Emira is a South African Real Estate Investment Trust (REIT) with a diversified portfolio across sectors and geographies. In South Africa, it holds direct commercial – retail, industrial, office – and residential property portfolios. It also recently acquired stake in listed REIT SA Corporate Real Estate. Internationally, Emira invests indirectly through equity interests alongside specialist co-investors. In the US, it holds influential stakes, ranging between 45% and 49%, in 10 dominant, grocery-anchored centres with US-based partner The Rainier Group. In Poland, Emira has a 45% equity stake in DL Invest, a Luxembourg-headquartered developer and long-term investor in industrial and logistics centres, mixed-use offices, and retail parks located across Poland.

“Our diversified portfolio of direct and indirect property investments supports resilient returns across market cycles. Emira continues to be well-capitalised with a prudently managed financial position, and our capital recycling strategy continues to strengthen the balance sheet,” says Day.

Interest cover improved to 2.7 times and the loan-to-value ratio improved to 35.6% from 36.3% over the six months. In October 2025, 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.

Improved South African portfolio metrics

 Emira’s South African direct property portfolio comprises 56 properties, valued at R9.3bn. The portfolio’s fair market value, adjusted for disposals, increased 1.2%. The commercial portfolio of 41 assets is balanced across urban retail (50%), office (23%) and industrial (14%), driven by improved performance metrics across all sectors. The residential portfolio (13%) comprises 2,203 units across 15 properties owned by Transcend Residential Property Fund, a wholly owned subsidiary focused on quality, value-oriented suburban rental units.

“Commercial portfolio valuations were positively influenced by improved sentiment in the South African market and more resilient underlying fundamentals,” notes Day.

 Commercial vacancies decreased to 3.8% from 6.4% over the six months mainly due to a single industrial tenant 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 in the primarily P- and A-grade portfolio continued showing improvement, closing at 8.0%, down from 8.4%. Retail vacancies remained low, although slightly up at 4.8% from 4.2%, while in the high-demand industrial portfolio, vacancies reduced to 0.4% from 7.9%. Weighted average rental reversions improved in all sectors and rose into positive territory, up by 0.6%, in the retail portfolio.

Residential portfolio occupancies were higher at 98.3%, excluding units for sale, ahead of the Rode national average of 94.4%, with solid underlying demand supporting performance and contributing to consistent, modest rental growth.

Growth-backed capital recycling

 Emira’s capital recycling strategy includes selectively divesting non-core or mature assets, which creates liquidity to invest in high-yielding, value-accretive opportunities. During the six months, Emira disposed of a non-core industrial property and 1,144 residential units for total proceeds of R746.3m. A further R405.7m of properties were under sale agreements when the period closed.

Emira allocated R33.4m to targeted upgrades in its commercial portfolio and R10m in the residential portfolio. “These investments protect and prolong asset value, maintaining quality standards, occupancy appeal and compliance,” notes Day.

Deploying liquidity achieved through its disposal programme, through on-market transactions Emira acquired a 6.4% equity interest in SA Corporate during the period for R497.1m, which at 30 September 2025 was valued at R523.7m based on the share’s closing spot rate.

Emira’s equity stake in SA Corporate contributed R13.0m to the period’s distributable income.

“The SA Corporate investment aligns with Emira’s strategy of investing in quality, undervalued assets. It’s well diversified and defensive property portfolio, anchored on resilient retail and residential assets, offers strong fundamentals and reliable cash flows,” comments Day. Emira has since invested a further R187.9m in SA Corporate, taking its total equity interest to 8.7%.

International strategy reinforced by performance in the US and Poland

 International investments are 37% of Emira’s portfolio, by value, with 14% in the US and 23% in Poland.

Emira’s US portfolio opened the period with 11 assets of R2.7bn (USD145.4m). After the successful sale of University Town Centre following an approach by a co-investor, creating the opportunity to unlock liquidity at a small premium to book value, the US portfolio closed the period with 10 investments totalling R2.2bn (USD129.6m). Two properties, Moore Plaza and Dawson Marketplace, are under contracts for sale. The US portfolio held its value, which is expected to remain steady for the full year.

The US investments continued to perform well supported by sound property fundamentals and a high-quality tenant base. Strong leasing activity and consistent tenant demand improved vacancy levels to 2.8% from 4.6%. New leases were signed at an average lease duration of 7.0 years, extending the portfolio’s weighted average lease expiry to 4.6 years from 4.2 years. Rental reversions remained slightly positive at 0.4%.

Emira’s US equity investments contributed R89.8m to its half-year distributable income.

In August 2024, Emira began its investment in DL Invest and it held its full 45% stake in DL Invest for the entire period. “We’re encouraged by DL Invest’s performance since our investment, especially its strong execution of strategy. Emira’s investment has laid a solid foundation for the strategic, long-term collaborative partnership with DL Invest, which also positions Emira to access potential future opportunities in Poland,” Day notes.

DL invest has established a strong position in the Polish market through its integrated business model, diversified portfolio and consistent financial performance. Its portfolio of 39 income-generating properties was valued at EUR687.5m at 30 September 2025. The portfolio comprises 67% industrial and logistics, 22% mixed-use/office and 11% retail parks. It maintained a total vacancy of 3.0% and a stable weighted average lease expiry of 5.2 years. DL Invest’s land and properties under development had a combined carrying value of EUR189.8m, providing a growth pipeline. During the period, DL Group successfully listed EUR350m Eurobond on the Luxembourg Stock Exchange, following a successful issuance oversubscribed by institutional investors.

Emira earned EUR3.62 million (R74.9m at the average EUR/ZAR exchange rate) from DL Invest for the period, which was added to distributable income.

Long-term value from strategic capital deployment

“We will continue to direct recycled capital towards meaningful, value-accretive opportunities to grow value for all shareholders,” concludes Day.

Distributable earnings rise as Dipula reopens its growth pipeline

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Dipula Properties (JSE: DIB) has delivered a robust set of results for the year ended 31 August 2025, showcasing sustained strategic progress and operational strength. The company’s second half performance outpaced the first half, driving a full-year increase of 5% in distributable earnings. This translated to full-year distributable earnings per share of 57.26 cents for the year

Izak Petersen, CEO of Dipula Properties, highlights that Dipula’s results reflect prudent capital allocation backed by rigorous asset management, financial and operational discipline, and the reignition of acquisitive growth.

“As a proud South African business, Dipula draws strength from the remarkable resilience of our people, who possess a distinctive talent for spotting opportunities, unlocking value and turning challenges into success, even in a tough operating environment. The Dipula team has done well to deliver strong performance with a positive set of results that further reinforce our firm foundation for future growth,” comments Petersen.

Dipula remains optimistic about its prospects, supported by a real estate sector in early recovery, fuelled by easing inflation, lower interest rates, some improvement to national political and policy stability, and a more stable electricity grid. Dipula is expecting continued growth in distributable earnings of 7% for its 2026 financial year.

Dipula Properties (formerly Dipula Income Fund) is a prominent, diversified South Africa-focused REIT that has been delivering sustainable investment returns, generating long-term value for stakeholders for 20-years, with nearly 15 of those as a listed entity. The company generates 67% of its income from retail properties defensively positioned with retail centres in townships, rural, and urban convenience locations. It also has a core portfolio of logistics and industrial assets (13% of income), office assets (16%), and a small non-core residential property portfolio (4%). Dipula is invested across South Africa, but its portfolio is predominantly in Gauteng.

Supported by improved property fundamentals and Dipula’s proactive asset management, the property portfolio increased in like-for-like value by 6% to R10.8 billion, and 10% for retail, buoyed by higher income prospects and supporting a 7.5% rise in net asset value. Dipula’s revenue, excluding straight-lining, increased 4% to R1.517 billion. Net property income rose 3.0%.

Cost control continues to be a management priority, and the total cost-to-income ratio of 43.2% (FY24: 42.6%) reflected a marginal increase due to inflation-driven property expense increases and the effect of lower office rental renewals achieved the previous year. Demonstrating continued cost discipline at corporate level, the administrative cost-to-income remained stable at below 4%.

Operational highlights included significant leasing activity, with retail portfolio vacancies reducing to 5%, even though total portfolio vacancies edged up slightly from 7.5% to 8.5% during the year, mainly due to short-term dynamics in highly lettable properties in the office and industrial portfolios.

Dipula achieved a weighted average positive renewal rental rate across the portfolio of 0.6%, a significant improvement over the -9.7% for FY24. New and renewed leases concluded during the period amounted to R801 million, securing sustainable income streams.

Discussions are currently in advance stages for Dipula’s clearly telegraphed intention to sell its affordable and conveniently located residential rental units, which currently represent 4% of income and showed reduced vacancies from 12% to 6% during the year. The planned disposal will see Dipula re-allocate capital to the retail and industrial sectors that are core to its business.

Driving its active capital recycling, Dipula disposed of R200 million of non-core properties during the year, substantially higher than R37 million of the prior financial year. Proceeds contributed to repaying debt and funding value-enhancing asset management strategies, quality-improving acquisitions and sustainability initiatives.

Dipula invested R214 million in refurbishments and redevelopments designed to drive income growth, which is a 37% increase over the prior year. A further R170 million is planned for the 2026 financial year, enhancing already successful core assets.

Returning to acquisitive growth this year, Dipula finalised five strategic acquisition agreements in August 2025 totalling approximately R700 million, at a total average weighted yield of 10%. The largest of these was the R480 million purchase of Protea Gardens Mall in Soweto, a 24,000sqm community shopping centre. This asset is an excellent strategic fit for Dipula’s strategy, offering embedded growth and value creation potential, supported by a strong tenant base with over 70% national retailers and a growing consumer market. Together with two additional acquisitions to deepen the company’s footprint in key, proven markets, these retail investments underscore Dipula’s commitment to community upliftment by providing accessible, everyday shopping experiences.

In line with Dipula’s capital allocation strategy focused on high-quality mid-sized logistics and industrial assets, a core component of its growth plan, Dipula also secured two industrial properties with strong tenant profiles. It agreed to acquire a newly developed, state-of-the-art distribution centre of over 16,000sqm in Klerksdorp, leased long-term to blue-chip multinational Bayer. Additionally, Airborne Industrial Park, a fully let multi-tenant complex of 6,964sqm located near OR Tambo International Airport, transferred ownership in August 2025.

The transactions are also being funded, in part, by Dipula’s oversubscribed September 2025 equity raise of R550 million.

Dipula integrates ESG principles into every aspect of its operations, driving transparency, reducing environmental impact, and fostering community and social value through sustainable investments and stakeholder engagement. Key initiatives this year included expanding rooftop solar capacity, enhancing energy efficiency, waste and water management, and supporting employee development and community projects.

The REIT invested R54 million in solar PV installations during the year, bringing its installed solar capacity to approximately 6MWp. An additional 10MWp of new solar projects are slated for completion in the first quarter of 2026. While there’s still progress to be made, the results show that Dipula has started its sustainability journey in earnest. Emissions avoidance increased by 240% compared to the previous year. Meanwhile, the share of green energy consumed in its portfolio more than doubled, rising from 2% to 5%.

“Dipula’s capital allocation will see us staying true to our strategy by growing and enhancing the quality of properties in our retail portfolio, increasing exposure to logistics and industrial properties, and advancing our sustainability programmes. We are actively evaluating a strategic pipeline of promising growth opportunities within this core focus,” says Petersen.

Dipula benefits from a strong balance sheet and has maintained prudent debt levels. Gearing reduced to 34.9% compared to 35.7%, and a steady ICR of 2.8 times at year end reflects a consistently well-managed balance sheet. Post year-end gearing had reduced to 29%.

Late last week (5 November 2025), Dipula was named the number one company in the prestigious Sunday Times Top 100 Companies Awards, purely on merit assessed through rigorous financial performance criteria that identify those companies earning the most for shareholders. Eligible companies must be JSE-listed with minimum market capitalisation of R5 billion as at 31 August 2025, trade at least R20 million in volume, and have at least five years of trading history. Rankings are determined by the compound annual growth rate (CAGR) of a hypothetical R10,000 initial investment at the closing share price on 31 August 2020, held for five years to 31 August 2025.

Dipula proudly achieved a compound annual growth rate of 57%, delivering a total return of 854%. This means R10,000 invested in Dipula in September 2020 was worth R95,424 as at 31 August 2025.

Looking ahead, Petersen notes the South African real estate sector has seen meaningful improvement recently with more to come, and this could accelerate should there be improvements to the persistent local government inefficiencies that are posing material risks and structural constraints to sector growth.

“We remain optimistic about South Africa and the property sector’s outlook, while being realistic about the challenges we face. Dipula will continue focusing on growing our presence in defensive retail and industrial assets through strategic capital allocation, disciplined operations and active hands-on management,” says Petersen.

 

Redefine ends FY2025 in stronger shape

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Redefine ends FY2025 in stronger shape as confidence lifts and greylisting exit bolsters outlook

Redefine Properties Limited [JSE: RDF] has reported a solid set of results for the financial year ended 31 August 2025, marking another step in the group’s multi-year transformation journey. The diversified property group delivered a 7.8% increase in distributable income, lifted its operating profit margin by 1.1 percentage points to 76.2%, and reduced its loan-to-value (LTV) ratio to 40.6%, firmly within its target range.

Chief Executive Officer Andrew König says the results confirm that “Redefine ends the financial year in far better shape than we started it, with all key metrics trending positively.”

“We’ve seen property asset values lift by R1.9 billion in South Africa and hold steady in Poland. Our LTV ratio is also back within range. Importantly, we achieved an operating profit margin improvement against a backdrop of only moderate revenue growth, which is testament to the efficiency gains coming through the business,” König explains.

 Confidence returning as SA exits the FATF greylist

König says early signs of rising business and consumer confidence are evident in leasing activity and investor sentiment, supported by the country’s recent removal from the FATF greylist and prospects of a sovereign credit rating upgrade.

“The finalisation of South Africa’s greylisting exit is significant – it will translate into lower costs of capital, attract more foreign investment flows, and further deepen domestic liquidity. We’re already seeing the bond market pricing that in,” he notes.

“Add to that the Reserve Bank’s firm inflation targeting stance and the possibility of a rating uplift next year, and you have the makings of a tangible, rising optimism. Those tailwinds, coupled with Redefine’s strengthened balance sheet, position us well to capture growth as sentiment improves.”

CFO Ntobeko Nyawo agrees that the broader macro turn is set to benefit well-capitalised corporates.

“Our balance sheet is already in a strong position; with an interest-cover ratio of 2.2 times, 83% of debt hedged, and a weighted average cost of debt reduced to 7%. That gives us flexibility to fund growth while maintaining liquidity prudence.”

 Portfolio quality and diversification underpin performance

COO Leon Kok says Redefine’s diversified portfolio again proved its resilience, with retail and industrial strength offsetting a still-muted office sector.

“Our portfolio mix really paid off this year. Retail and industrial delivered very pleasing results, offsetting the structural headwinds still facing offices,” Kok explains.

“Operating fundamentals are stabilising, with occupancies up, renewal reversions improving, and asset values across all three sectors showing year-on-year gains. Even office valuations have turned positive on a total-basis view.”

Retail renewal reversions moved into positive territory (1%), and trading densities improved, with tenants’ rental-to-turnover ratios at 7.4%, reflecting sustainable affordability. Industrial vacancies remain negligible at 2.7%, supported by buoyant logistics and warehousing demand.

“Industrial continues to perform exceptionally well,” Kok says. “We’re seeing strong demand, particularly for logistics and warehousing space close to major transport corridors, where constrained supply is pushing rentals higher. Strategically, it’s a sector we’re keen to expand on, especially where we have developable land.”

On the retail front, Kok notes that tenant health remains solid and that the grocer anchors have supported the turnover growth. “We’ve seen marked improvement in their trading performance, which bodes well for the overall retail environment.”

In the office sector, occupancy is stable at 87%, and leasing volumes (at 262,000 m² signed) underscore renewed deal activity.

“Business confidence drives office demand, and the deal activity we’re seeing suggests sentiment is stabilising. Certain nodes, particularly in the Western Cape, have performed exceptionally well as provincial stability and governance continuity have translated into the lowest vacancy levels in the country,” he adds.

“Looking ahead, a swift, peaceful and conclusive local election outcome would be a meaningful catalyst for offices, particularly in Gauteng, by restoring certainty around municipal service delivery and enabling businesses to commit to space.”

 Poland adds growth momentum

Redefine’s Polish platform (EPP), whose retail platform accounts for roughly 28% of group assets, continued to deliver a strong, stable performance. EPP’s core retail portfolio maintained a 99.4% occupancy rate, while European Logistics Investment’s (ELI) logistics operations doubled distributable income contributions to R214 million thanks to rising occupancies (up to 96.8%) and higher market rentals.

“Poland enjoys GDP growth roughly three times that of South Africa and very low unemployment. That’s created a robust consumer market that continues to support our retail and logistics assets,” says König.

“The cost reduction plan implemented at EPP has strengthened operating margins, while self-storage developments under way will double our footprint in that segment. The stability and growth from Poland demonstrate why geographic diversification remains an essential buffer in our group asset portfolio.”

 Balance-sheet strength and disciplined capital management

Nyawo highlights that Redefine’s deleveraging and liquidity initiatives are yielding results.

“We’ve improved our LTV ratio from 42.3% to 40.6%, reduced debt margins in South Africa by 20 basis points, and maintained a well-laddered maturity profile with no near-term refinancing pressure. Liquidity of R6.7 billion gives us room to manoeuvre,” he says.

The group disposed of R1.1 billion of non-core assets during the period while reinvesting a similar amount in upgrades and energy-efficiency projects. Installed solar capacity rose 35% to 58.4 MWp, with a further 8.4 MWp in progress – a 50% increase since 2024.

“Capital recycling remains core to our strategy,” adds Kok. “We’re continuously repositioning and improving the portfolio rather than chasing new developments. Our active asset management focus keeps our assets relevant and enhances income resilience.”

 Sustainability and long-term value creation

“Nine of our buildings are now net-zero, and both our South African and Polish portfolios achieved strong GRESB scores of 81, reflecting our consistent ESG performance. For us, sustainability and operational resilience go hand-in-hand – they underpin portfolio quality and investor confidence,” König says.

 Outlook: disciplined optimism

König notes that while Redefine’s share price has delivered a 310% total shareholder return over five years, this recovery reflects more than market momentum – it underscores the success of a focused strategic reset.

“When COVID hit, our share price fell sharply, so part of that growth is off a low base. But what really matters is how fundamentally the business has transformed since then,” he says. “Five years ago, our strategy was scattered across multiple geographies and asset classes. Today, we’re focused, disciplined, and in control of every asset we manage. That focus has changed how Redefine looks and feels, and it shows in our performance.”

Looking ahead, Redefine expects distributable-income-per-share growth of 4 to 6% in FY2026.

“We remain committed to disciplined capital allocation for sustainable growth – improving portfolio quality, simplifying our international joint ventures, and maintaining a strong balance sheet,” says König.

“Moderating inflation and improving liquidity all point to a more constructive operating environment. If we maintain this trajectory, we’ll continue delivering inflation-beating capital and income growth for shareholders.”

Dipula announces R700 million in strategic acquisitions

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Dipula announces R700 million in strategic acquisitions, headlined by Soweto’s Protea Gardens Mall 

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.

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.

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.