JSE-listed real estate investment trust (Reit) Vukile Property Fund has reported that it has achieved a strong performance for the financial year ended March 31, underscoring its dealmaking dexterity, strategic expansion and robust operational delivery.

Vukile confirmed in a pre-close trading update on March 31 that it is on track to meet its full-year guidance of 2% to 4% growth in funds from operations (FFO) per share and 6% growth in dividends per share (DPS).

Reflecting strong business momentum and high-quality earnings, Vukile also provided preliminary guidance on FFO and DPS growth for the 2026 financial year of at least 6%, based on conservative assumptions and without anticipating any need for new equity capital.

The “transformative” 2025 financial year was underpinned by strategic execution. Driven by disciplined dealmaking and decisive capital deployment, Vukile’s gross asset value now exceeds R50-billion.

Through its 99.5%-held Spanish subsidiary Castellana Properties, Vukile grew its asset base in Spain and Portugal by nearly 60%.

It exited its investment in Lar España at a profit of €82-million, swiftly redeploying capital to acquire the Bonaire Shopping Centre in Spain’s Valencia province at a compelling cash-on-cash return of over 8%, avoiding cash drag and securing sustainable earnings from a “top-quality asset”.

Adding a new engine of growth to its strategy, Vukile entered Portugal with four high-quality retail acquisitions. The company said a fifth deal is well advanced and already fully funded.

All-in-all, the Iberian portfolio grew by about 60% over the 12 months, cementing Vukile’s dominant position across two of Europe’s strongest economies − Spain and Portugal. About two-thirds of Vukile’s assets and 60% of earnings are now offshore.

“This financial year has been a transformative year for Castellana Properties,” said Castellana Properties CEO Alfonso Brunet during the presentation.

“In general, [this is a] very good performance in both portfolios that gives us a strong certainty for the closing of this period and a very promising outlook as a start point for an even better financial year 2026,” he added, discussing the Spanish and Portuguese portfolios.

In South Africa, Vukile acquired a 50% stake in Mall of Mthatha – formerly BT Ngebs – in May 2024, where early turnaround performance has exceeded expectations. The mall’s vacancy rate has decreased dramatically from 18% to just 1.8%.

These assets were acquired at a favourable point in the cycle, expanding Vukile’s footprint and growing its Iberian portfolio with strategically aligned, high-performing assets that are delivering strong cash flows with further upside through targeted asset management.

“We’ve come through a phase of explosive growth. Now, we’re focused on integration, optimisation and crystallising value from these assets. Vukile remains open to opportunities but will prioritise deepening value within its current footprint, and for the time being we don’t expect to raise capital,” Vukile CEO Laurence Rapp said in a media release.

During the presentation, Rapp explained that the company, at year-end, expected about 65% of its assets to be based in Iberia, and 35% in South Africa.

“In the year ahead, we would expect about 60% of our earnings, of our net operating income (NPI), to be coming from Iberia, versus 40% in South Africa,” he said.

Meanwhile, the company says operational strength has stood out across Vukile’s portfolio of high-performance, strategically located shopping centres, with limited exposure to new competition and strong pricing power.

In South Africa, like-for-like net property income (NPI) grew 6.4%, vacancies remain below 2%, and 84% of rental reversions were positive or flat. The portfolio has recorded growth in both sales and footfall.

The cost-to-income ratio reduced to 15%, with ongoing progress in solar and water initiatives enhancing sustainability metrics and efficiencies.

In the Iberian portfolio, like-for-like NPI increased by almost 2% and with various value-add projects now complete, significant upward momentum can be expected in the year ahead.

Vukile says vacancies in both portfolios remain below 2%.

Positive rental reversions were a standout 23.6% in Spain and 6.15% in Portugal. Sales grew by 4.3% in Spain and 6.7% in Portugal.

“With a well-hedged balance sheet, minimal near-term debt expiries of just 2% maturing in financial year 2026 and strong liquidity, Vukile is closing financial year 2025 in an exceptionally positive position,” said Rapp in a media release.

Vukile will report the results for its financial year ended March 31 on June 17.