JSE-listed retail-focused real estate investment trust Vukile Property delivered strong operational results across its portfolio during the five-month period ended August 31, and is on track to meet its full-year guidance of at least 8% growth in funds from operations and dividends a share, said Vukile CEO Laurence Rapp.

During a pre-close period briefing with investors, he added that significant progress had been made in integrating the newly acquired assets into the business and that the Spanish and Portuguese portfolios had delivered outstanding metrics.

“Portuguese assets have been integrated successfully, including process and data management, allowing the [Vukile subsidiary] Castellana Properties team to start implementing their expertise in value-add asset management initiatives,” he said.

Vukile had also acquired its fifth Portuguese asset, namely Forum Madeira, for €63-million at a yield of 9.5% in April through Castellana Properties.

Further, Vukile also remained open to opportunities, with an early-stage pipeline of deal opportunities, but while remaining disciplined in capital allocation and focused on doing deals that were strategically aligned and financially accretive, said Rapp.

“We signalled to the market at year-end that our operational priority was integrating, optimising and unlocking value from our newly acquired Iberian assets. Significant progress has already been made, including the alignment of processes and data management, allowing the Castellana team to start implementing their expertise in value-add asset management initiatives,” he said.

He highlighted the company's approach to disciplined capital allocation, noting that it had been outbid for an asset in Spain, which it walked away from after the bidding went beyond the point where Vukile felt it was appropriate for the potential value-add.

However, the company continued to look for new opportunities in Iberia, he added.

Specifically, the Iberian portfolio demonstrated significant strength, with occupancy across the portfolio at 99%. Positive rental reversions totalled 3.4%, with 2.8% in Spain and 6.17% in Portugal.

Additionally, sales grew by 5.7% in Spain and 4.1% in Portugal, or 5.1% in total, with footfalls up 3% across the board, he reported.

Meanwhile, Vukile’s South African portfolio metrics remained top-tier, with net operating income-growth projections ahead of budget owing to targeted management of cost efficiencies and additional solar PV systems.

In the South African portfolio, all key metrics improved or remained in line with the prior period’s strong results. Like-for-like net operating income grew 8% and vacancies remained below 2%, reflecting sustained high occupancy and strong demand for Vukile’s retail space across all segments, said Vukile Property Southern Africa MD Itumeleng Mothibeli.

Vukile reported positive rental reversions for the fourth consecutive year, which grew at 1.6%, with 83% of leases agreed at positive or flat rental levels.

Portfolio trade and footfalls increased, led by township and rural malls. Vukile successfully reduced its cost-to-income ratio to 13%, led by additional solar PV installed and targeted cost efficiencies, he said.

One of the key focus areas for the team since the start of the current financial year had been on continued cost management, and the team had gained significant further traction on cost-containment measures, with pleasing results for the first five months of the financial year, said Mothibeli.

Further, Vukile continued to enjoy strong support in the local debt capital market, with its recent R500-million bond issuance six-times over-subscribed with 21 investors participating. The group achieved its lowest margins since in 2012, noted Rapp.

In addition, external credit assessment institution GCR had upgraded Vukile’s credit rating to AA+(za) with a stable outlook.

“Vukile has started its 2026 financial year with robust and sustainable operational and financial strength,” he said.

Owing to its strong operational performance, the group would update the market with revised guidance when it reported results for the six-month interim period to September 30, on November 26, he added.