Vukile Property Fund says its ready to pay dividends and restart strategic, accretive growth journey in the country
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VUKILE Property Fund has returned to paying interim dividends, declaring 40.56 cents per share for its half-year to September 30.
The specialist retail real estate investment trust (Reit) also resumed market guidance, providing a forecast for its full-year dividend of at least 80c per share.
The resumption of dividends follows a resilient interim performance by Vukile’s shopping centre assets. Vukile’s assets of R33.4bn are 49 percent held in South Africa, and 51 percent in Spain through its 82.5 percent held Madrid-listed subsidiary Castellana Properties Socimi.
Chief executive Laurence Rapp said yesterday that the fundamentals of both businesses remained positive with highly diversified income streams provided by some of the leading retail businesses.
He said Vukile’s focus on operational excellence and building new competencies, capacity and cash reserves had delivered pleasing results. Armed with the significant cash balance of Castellana and proceeds from South Africa asset sales, Vukile could confidently resume its growth ambitions, he said.
“We’ve come through a tough time of Covid-19 and unrest, and this performance underscores the strength of our portfolio, business platform and balance sheet.
“Vukile is ready to pay dividends and restart its strategic, accretive growth journey in South Africa and abroad while remaining vigilant to pandemic-related disruptions,” he said.
Vukile reported like-for-like trading densities up 4.2 percent and like-for-like net operating income growth of 3.7 percent, with an improved rental collection rate of 99 percent.
Vacancies were low at 3.2 percent. Rapp said their shopping centres gained ground, and their rural and township centres continued to outperform.
Five of the six malls damaged during the July looting were fully operational, and at KwaMashu Shopping Centre anchors were trading well, with the rest of the tenants anticipated to fully trade in March 2022.
Castellana’s retail sales exceeded 2019 levels in September 2021, and footfalls were practically on par. The rental collection rate was 95 percent. Vacancies were low at 2.9 percent.
Castellana completed three asset-strengthening redevelopment projects and had let 94 percent of the associated retail space.
Four non-core assets in South Africa were sold at book value. “We plan to recycle this capital into strategic retail asset acquisitions. Good retail property investment opportunities are scarce in this market. Still, we believe in the benefit of specialisation and are upbeat about the future of retail,” said Rapp.
He said their competitive advantages of active asset management and data-driven customer centricity would enable Vukile to confidently embrace the structural shifts in retail that had accelerated during the pandemic and highlighted the vibrancy and resilience of retailers worldwide as well as the pivotal role that physical stores play in omnichannel retail sales.
Vukile was well funded, its balance sheet metrics remained strong and were improving further, he said.
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