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Financial results

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’s strong results with record growth and strategic acquisitions

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Spear reports strong FY2025 results with record growth and strategic acquisitions

Spear REIT Limited (SEA:SJ), the Western Cape-focused Real Estate Investment Trust (REIT), has announced its results for the financial year ended 28 February 2025.

Amid South Africa’s challenging macroeconomic landscape, Spear has demonstrated resilience, achieving significant milestones in asset value growth, financial and operational performance.

 FY2025 Highlights:

  • Distributable income per share (DIPS): Spear achieved DIPS growth of 3,08% aligning with the mid-range of management’s guidance for the year.
  • Net asset value per share (NAV) growth: Spear NAV per share increased by 3.57% to R12.20.
  • Completion of R1.15 billion transaction: Spear successfully completed the acquisition of 13 prime real estate assets within the Western Cape, valued at R1.15 billion at acquisition date. The transaction was completed ahead of schedule and under budget. This strategic acquisition expanded Spear’s asset base and positioned the company for long-term growth.
  • Asset value growth: The portfolio grew by 19.54% from R4.6 billion in FY2024 to R5.5 billion in FY2025, highlighting the effectiveness of the company’s active management strategy.
  • Market capitalisation: Spear’s market capitalisation increased by R1 billion, reaching a total of R3.3 billion at year-end, a testament to strong investor confidence and future growth prospects.
  • Occupancy rate: The company saw an improvement in its occupancy rates, which increased by 388 basis points to 97% across its core portfolio by the end of FY2025 compared to FY2024. This increase was driven by strong leasing momentum and tenant demand surpassing supply.
  • Rental reversion: Spear achieved a positive rental reversion of 4.18% across its portfolio in FY2025, a clear indicator of the company’s ability to drive value through hands-on asset management.
  • Loan to value (LTV) ratio: Spear continues to maintain a robust balance sheet primed for growth, with a 27.09% LTV ratio and an Interest Coverage Ratio (ICR) exceeding three times.

Speaking at the results presentation, Chief Executive Officer Quintin Rossi, commented on the strategic achievements of the year. “FY2025 has been transformative for Spear. Despite a challenging macroeconomic environment, we have shown resilience through our disciplined portfolio management and strategic acquisitions. The completion of the R1.15 billion acquisition ahead of schedule and under budget is a testament to our team’s commitment to operational excellence and long-term value creation. We are confident that these initiatives will continue to position Spear on a firm foundation to achieve the long-term strategy of the business.”

Chief Investment Officer Kim Pfaff-Karg further highlighted the company’s investment and long-term vision. “Looking ahead, we remain committed to expanding our portfolio within the Western Cape, South Africa’s highest performing property market. Our strategic objective is to grow our asset base to R15 billion over the next 7 to 10 years, while maintaining our disciplined value investment approach to continuously build a robust and defensive portfolio.”

Chief Financial Officer Christiaan Barnard provided an in-depth overview of the company’s financial performance. “We are pleased to report a 12.21% increase in group revenue compared to FY2024, driven by the successful integration of the Western Cape Portfolio acquisition. This, combined with strong rental collections of 98.59%, demonstrates the stability and resilience of our income streams.” Our distributable income per share (DIPS) increased by 3.08% to 85.55 cents for the year, while the total distribution per share (DPS) also grew by 3.06% to 81.27 cents. This was made possible through proactive and hands-on financial management and effective debt portfolio management, including the refinancing of debt at more favourable terms.”

Spear maintained an annualised payout ratio of 95%, strongly conveying its commitment to returning value to shareholders while maintaining sufficient financial flexibility for continued growth.

Spear’s acquisition of the new Western Cape Portfolio for R1.15 billion in October 2024 marked a transformative milestone, adding 13 prime real estate assets, including industrial, retail, commercial, and mixed-use properties. Notably, it introduced medical and life sciences retail assets for the first time, broadening Spear’s investment horizons.

The transaction delivered an initial yield of 9.46%, which increased to 10.1% after factoring in a once-off transaction fee. This acquisition further enhanced Spear’s geographical diversification, with a strong focus on the Cape Town Metropole.

The success of the Western Cape can be attributed to its accountable and effective administration. The region consistently exemplifies strong governance, with the City of Cape Town receiving top honours in both the 2024 Municipal Financial Sustainability Index and the Governance Performance Index (GPI). This commitment to transparency and integrity has fostered a stable environment for investment and growth.

Additionally, the Western Cape Provincial Government and local authorities have made significant strides in driving economic development, with substantial investments in infrastructure, job creation, and energy security. These initiatives have not only enhanced the region’s appeal to investors but have also strengthened its resilience amidst challenging economic times.

Spear’s commitment to its Environmental, Social, and Governance (ESG) policy continues to gain momentum with its PV solar rollout. As of FY2025, Spear has successfully installed solar PV systems across 38% of its portfolio, with plans to increase this to 64% by the end of FY2026. Spear’s total commissioned solar capacity now exceeds 9.4MW, generating an impressive 10.1MW across its portfolio.

The company is actively investigating energy-wheeling projects, aimed at facilitating the transfer of electricity between its owned assets. These initiatives are expected to mitigate rising electricity costs while significantly bolstering energy security across Spear’s portfolio.

Chief Operating Officer, Cliff Toerien commended the invaluable contributions of the Spear team in driving the company’s success throughout the financial year. “The Spear team has demonstrated their ability to asset manage favourable operational outcomes, drive solid portfolio performance through proactive and early engagement leasing strategies and strategic asset management. Our leasing teams have capitalised on improved market conditions, leading to improved occupancy rates and tenant retention across the portfolio. Additionally, our proactive approach in enhancing our rental income and optimising operational efficiencies contributes to our stable financial metrics and positions us well for sustained growth.”

In a strategic step to further strengthen its leadership, Spear recently announced the appointment of Joan Solms, a highly regarded property and finance expert, as a non-executive director to its Board of Directors, effective1 April 2025. This appointment reflects the company’s commitment to strengthening its governance and leveraging top-tier expertise to drive continued growth.

 Outlook for FY2026

Looking to FY2026, Spear expressed confidence in the strength of its portfolio and its ability to generate consistent and predictable returns. The company’s continued focused strategy on the Western Cape positions it well for further growth, with a pipeline of both greenfield and brownfield developments.

In a separate announcement released via SENS on 21 May 2025, Spear announced the acquisition of Berg River Business Park in Paarl for R182.15 million. The 30,000m² multi-let industrial park, located in the Paarl Industrial node, will be acquired through a Section 42 asset-for-share transaction and is expected to deliver an initial yield of 9.35%. The acquisition aligns with Spear’s Western Cape-focused strategy and marks the REIT’s first entry into the Paarl real estate market.

Spear’s management forecasts a 4% to 6% growth in Distributable Income per Share (DIPS) for FY2026 subject to certain qualifications, while maintaining a dividend payout ratio of 95%.

“We are confident that our unwavering strategic focus on the Western Cape, together with our initiative-taking approach to portfolio management, will continue to generate and drive sustainable value for our shareholders in the years ahead. This will result in consistent asset value growth and sustainable, credible and predictable financial and operational performance,” Rossi concluded.

Octodec successfully navigates the recovering economy

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Octodec successfully navigates the recovering economy, delivering growth in both rental income and distributions for HY2025

  • Revenue grew 2% to R1.1 billion
  • Core vacancies reduced to 7% with all sectors contributing to the improvement
  • Cash generated from operations up 25% to R270 million
  • Distribution per share 3% higher at 62.00 cents
  • Executed the sale of ten properties aligned with the portfolio recycling strategy
  • Yield-enhancing solar projects rolled out at two key assets
  • Pilot project Yethu City launched to high market demand with residential units 97% let

JSE-listed REIT Octodec Investments Limited, announced its interim results for the six months ended 28 February 2025, reporting a resilient performance across its Gauteng-based portfolio, despite a challenging market context.

Building on early signs of economic recovery, Octodec management focused on soundly managing the portfolio and the Group’s value proposition, reducing vacancies and disposing of ten non-core assets.

A highlight for the period was the completion of and successful launch of Yethu City in mid-February 2025. This redevelopment pilot project exemplifies Octodec’s ability to address market needs by introducing quality, accessible co- living accommodation to the Pretoria CBD. The letting rate exceeded expectations, with the residential occupancy reaching 40.7% by end February 2025 and currently nearing 100%.

Commenting on the results, Jeffrey Wapnick, Octodec MD says “We are pleased to have grown our rental income and dividend despite a challenging operating environment, reflecting the stability of our portfolio and the effectiveness of our strategic initiatives. We remain committed to managing our portfolio in alignment with market demand, while supporting long-term sustainability and driving value creation. We are thrilled about the successful launch of Yethu City as part of our efforts to provide well-priced, quality accommodation and unlock new opportunities for growth and enhancement of returns.”

Portfolio performance

The overall portfolio valued at R11.3 billion, delivered revenue growth of 5.2% at R1.1 billion, and a reduction in core vacancies to 13.7%, largely driven by improved performances from the Shopping Centre and Office portfolios.

Octodec’s portfolio of retail shopping centres, anchored by a strong base of convenience centres, recorded core vacancies of 0.8%, when excluding Killarney Mall which is held for sale. The portfolio achieved solid rental income growth of 6.2% to R91 million, reflecting management’s yield-enhancing actions, and robust demand for this retail category.

Rental income from retail street shops rose by 1.4% on a like-for-like basis while the strategic disposal of properties with high vacancies supported an improvement in occupancy from 86.0% to 87.4%. The Group acknowledges the impact of macroeconomic challenges and infrastructure constraints on this retail segment – most notably the Lilian Ngoyi Street that is currently under repair in the Johannesburg CBD, which contributed to elevated core vacancies of 21.9% at these affected properties.

Octodec’s office portfolio performance showed some green shoots, recording encouraging like-for-like rental income growth of 6.4% to R151 million, when excluding a net lease adjustment applied in the comparative period. Core vacancies improved slightly from 24.3% to 23.4%. Management continues to proactively manage underperforming assets through disposals and strategic conversions.

Octodec’s residential portfolio recorded above-inflation rental income growth of 5.1% on a like-for-like basis. Vacancies ended slightly above the comparative period at 8.4%, however were below the FY24 figure of 9.2%.

The Hatfield properties benefitted from pre-approval of NSFAS funded students and the enhanced amenities for students, recording a notable decline in vacancies of 3.1 percentage points. The introduction of the Yethu City co-living offering, aims to address affordability constraints and capture the vast demand for quality accommodation in this market.

The industrial portfolio consisting of smaller warehouses and light industry performed well, delivering rental income growth of 5.1% on a like-for-like basis and reduced vacancies of 8.7%.

Disposals and Capital Investment

In line with its strategy to exit non-core properties and redeploy the capital more advantageously, Octodec sold ten non- core properties at a weighted average exit yield of 8.4%, receiving R49 million in net proceeds. Several capital investment projects were undertaken during the period, most notably the installation of solar panels at The Fields and The Park Shopping Centre, which is expected to yield significant returns and enhance both the value and appeal of the properties. Smaller value-enhancing projects included the upgrade of Waverley Plaza, improvements at government- tenanted Rentmeester Park and at the historic landmark building, Bank Towers, where Octodec welcomed a new look Jet store.

Prudent financial management

 Cash generated from operations (before dividends) was 25% higher at R270 million. The group’s total borrowings ended the period at R4.4 billion and the LTV was reduced to 38.5%. Effective 30 November 2024, R970 million in funding was refinanced at improved margins with tenors of three to four years. The weighted average cost of funding ended the period slightly higher at 9.4% as a result of expired interest rate swaps. Management is proactively negotiating the refinancing of a further R650 million of debt maturing end August 2025. At the end of the reporting period, borrowings were 51% hedged and within the Group’s hedging target of between 50% to 60% in the short to medium term. The Group ended the period with R692 million in cash and unutilised banking facilities which is sufficient for its capital commitments.

Outlook and prospects

The formation of the Government of National Unity (GNU) has lifted market sentiment and together with interest rate cuts has improved the operating backdrop. These developments have already supported disposal activity and offered relief to small businesses, while presenting opportunities to lower Octodec’s funding costs, improving the potential for value-accretive reinvestment. While the lingering effects of the Lilian Ngoyi Street gas explosion and persistent unemployment continue to weigh on parts of the portfolio, management remains focused on tenant support, claim recovery, and adaptive asset management. However, heightened geopolitical risks, a material government lease termination, and uncertainty tied to the sustainability of the GNU, have prompted a more cautious outlook.

Riaan Erasmus Deputy CEO and FD adds, “We remain cautious in our interest rate outlook and focused on maintaining a disciplined balance sheet. As previously communicated, the Board has mandated a more assertive disposal strategy for non-core assets, where sales proceeds will be recycled into yield-enhancing investments or used to reduce borrowings, ultimately supporting income growth and strengthening the Group’s financial position. The early success of Yethu City underscores our strategy to reimagine underutilised assets to drive future returns.”

Based on the economic outlook and caution surrounding geopolitical tensions, management has revised its guidance for growth in distributable income per share, to between 2% and 4%, while maintaining a minimum dividend pay-out ratio of 75% of distributable income.

Equites’ logistics portfolio delivers another strong performance

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EQUITES’ PRIME LOGISTICS PORTFOLIO DELIVERS ANOTHER STRONG PERFORMANCE

Highlights for the 2025 financial year include:

DPS of 133.92 cps, at the upper end of guidance
Distribution pay-out ratio of 100%
LTV reduced from 39.6% to 36.0%
R2.9 billion in cash and unutilised facilities
Disposals of R2.4 billion concluded and transferred during FY25
Signed six Power Purchase Agreements (“PPAs”) which will be revenue generating in FY26

Cape Town, 15 May 2025. Equites Property Fund Limited announced its results for the 2025 financial year today, showcasing strong performance from both the South African and United Kingdom portfolios. This success was bolstered by a significantly reduced loan-to-value (LTV) ratio and Equites’ achievement of securing the lowest credit spreads in the sector during FY25. This accomplishment was directly linked to the strength of Equites’ balance sheet and the quality of its underlying portfolio.

Equites CEO, Andrea Taverna-Turisan said: “With the focus on like-for-like (LFL) rental growth both in SA and the UK, limited vacancy during the period and the ability to generate revenue from renewable energy, the Group has delivered distribution per share of 133.92 cps, which is on the upper end of the previously provided guidance.”

 Equites is the only specialist logistics REIT listed on the JSE. From a returns perspective, the industrial sector remained the most favourable property sector in SA in 2024, with a total return of 13.2% for the calendar year according to MSCI. The low vacancy rate, high rental growth and overall sector outperformance are fuelled by intensifying demand from retailers and 3PLs. Limited supply due to a shortage of appropriately zoned and serviced land, along with prohibitive funding costs for many developers, has further constrained availability. The demand for ESG-compliant space remains a key theme driving demand, particularly among multi-national tenants.

The Group focuses on high-quality logistics properties, let to A-grade tenants on long-dated leases. Equites’ portfolio fundamentals are exceedingly robust. The R27.7 billion portfolio is 99.9% occupied, with a WALE of 14 years and strong escalation clauses. Global multi-nationals and large listed organisations form the backbone of the tenant portfolio.  These fundamentals support high-income certainty over a sustained period, bolstering property valuations.

Equites’ R21.1 billion South African portfolio is the cornerstone of the business and delivered LFL rental growth of 5.9%, valuation growth of 6.0%, a WALE of 14.1 years and no vacancy at year-end. The Group has disposed of several smaller, specialised, and non-ESG compliant assets over the last 24 months. The resultant portfolio provides high-income predictability and robust rental and capital growth opportunities aligned with Equites’ commitment to its sustainability objectives.

Equites’ UK portfolio delivered exceptional rental growth over the period, with three assets undergoing rent reviews, resulting in uplifts of between 19% and 69%. The valuations have remained reasonably flat with a 1.0% uplift in GBP terms. The UK portfolio has a WALE of 13.1 years with only a single ancillary unit, representing 1.5% of the UK portfolio, vacant at year-end.

 Capital allocation to maximise value

The Group acquired and developed 14 assets in the UK, with a cumulative development value exceeding £450 million. These assets reached a peak value of £550 million, reflecting the value created over the past nine years. However, as market conditions in the UK changed, the Group needed to reassess whether this capital allocation would yield the highest possible returns for shareholders.

Seven of these assets, along with the Newlands development platform, have already been sold, and the Board has now decided to explore the sale of the remaining UK portfolio. This decision was driven by the maturity of the existing assets and the opportunity to reinvest the proceeds in South Africa. The proceeds from the sales could significantly reduce the loan-to-value (LTV) ratio. Plans are in place to reinvest this capital into newly developed, ESG-compliant logistics facilities on long-term leases in South Africa, which will enhance shareholder value over the long term.

In South Africa, Equites successfully completed a 16,721m² facility at Jet Park in March 2024, let to SPAR Encore. The Jet Park precinct has proven to be a resounding success, and the Group expects to develop the remainder of the Jet Park land within 18 months.

Equites also completed R195 million of improvements to the Shoprite Centurion facility, as part of the existing lease expiring in 2044. Two other Shoprite facilities were completed, both with 20-year leases – the R1.2 billion development of an 80,531m2 facility at Wells Estate, Eastern Cape and a groundbreaking R1.3 billion campus in Riverfields, Gauteng.

Three speculative developments with a total GLA of 20,116m² were completed in FY25. Two of these facilities were let before the practical completion date, and the third was let within three months of completion, demonstrating the intensifying demand for high-quality logistics assets in prime nodes. Through the 48 hectares of strategically located land that Equites controls, its development expertise, and its relationships with key retailers, 3PLs, and FMCG players, Equites is strategically positioned to exploit the current supply gap and grow its portfolio of excellence in SA.

Equites CEO, Andrea Taverna-Turisan, said: “We are confident that strong structural drivers underpin the long-term demand for high-quality logistics assets. Our track record of developing world-class facilities and a prime logistics portfolio will continue to attract top-tier clients and promote sustainable value creation for shareholders over time.”

 Optimise the Group’s capital structure and reduce the cost of funding

The Group has reduced its LTV from 39.6% to 36.0%, despite R1.5 billion construction and development spending in FY25. The reduction was driven by R1.4 billion of assets sold in SA at a premium to book value of 1% and R1 billion of assets sold in the UK at a discount of 0.5%, reinforcing the validity of the Group’s property valuations. Successful dividend reinvestment options for the two dividends during the year also contributed to the lower LTV.

The asset disposals and other strategic initiatives ensure that the Group is well capitalised with a low exposure to market risks and is successfully positioned to take advantage of performance-enhancing development opportunities. Given the exciting prospects, the Group has R2.9 billion in cash and undrawn facilities, and sufficient funding to meet maturities without raising new debt. The lower LTV also presents the Group with an opportunity to repurchase its shares where value-enhancing.

Through refinancing debt in South Africa and careful interest rate risk management, the Group’s all-in cost of debt in South Africa decreased from 9.1% to 8.6%, with an average debt maturity of 3.8 years. The UK cost of debt has remained constant at 3.9%, with almost 90% of UK debt maturing in FY33. More than 83% of the debt is hedged against interest rate volatility.

Growing revenue streams from alternative sources while fulfilling our ESG aspirations

ESG is a key aspect of the Group’s strategic positioning and continues to be at the core of its operations. These efforts have been recognised through the Morningstar Sustainalytics ESG Regional top-rated and ESG Industry top-rated company awards, received for the second consecutive year.

In addition to extensive climate-conscious construction initiatives and water efficiency interventions, Equites has dedicated significant time and resources to ensuring its tenants are shielded from electricity-related disruptions due to load-shedding or failing infrastructure. At year-end, the total solar generation capacity in the portfolio was 26.7 MW, with over two-thirds of the portfolio being supplied with solar energy. An additional 4.2 MW of green energy will come online in 18-36 months at a forecasted capital expenditure of R78 million.

Over the last 24 months, the Group has started implementing Power Purchasing Agreements (PPAs) to sell renewable energy generated on Equites’ rooftops to tenants at a discount to prevailing tariffs. Thus far, the Group has entered into a wheeling agreement in the City of Cape Town and has six PPAs in place, and the intention is to grow this revenue component. The Group is looking to increase wheeling capacity through engagement with municipalities, given its capability to generate excess energy from large-scale installations on entire roof space, and capitalise on rates of return well in excess of typical property returns. The execution of these initiatives delivers direct value to tenants while reinforcing the Group’s commitment to its sustainability objectives, generating alternative revenue streams, and contributing to energy security in SA.

Prospects

The Board expects DPS to increase at a rate above inflation going forward, within a target range of 140.62 – 143.29 cents per share – reflecting growth of between 5% and 7%. The Board’s DPS guidance is premised on the strong tenant base, the completion of several large-scale developments at Riverfields, Wells Estate and Canelands in FY25, enhancing revenue in FY26, and the certainty of overheads.

Equites CEO, Andrea Taverna-Turisan, concluded: “Equites has made the strategic decision to invest in assets which offer both income certainty (through tenure) and annual escalation clauses, thereby organically underpinning distribution growth. LFL rental growth for FY25 amounted to 5.9%, a level at which the Group expects to see LFL growth stabilising. By effectively managing administrative costs and the cost of debt, the Group expects to deliver distribution growth consistently higher than South African consumer inflation over the long term.

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

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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

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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.