International property fund looked at Spain, but is more keen on Pick n Pay or Checkers distribution centres File Photo: IOL
PRETORIA – Vukile, the listed diversified international property fund, was keen to expand its property assets to include retail warehousing.

Laurence Rapp, the chief executive of Vukile, said Vukile did not have any retail logistics assets yet but had an open mind to it.

Rapp said they had looked at some opportunities in Spain, with a portfolio of El Core Ingles distribution centres, but decided against it, because they did not like the fundamentals of the proposed deals.

However, Rapp said if Vukile had an opportunity to buy a Pick * Pay or Checkers distribution centre, they would definitely look at it, but would not buy a DHL or courier-type warehouse.

Rapp said the story last year that online retail was going to kill shopping centres was “overplayed” and proven to be incorrect, with a number of online retailers now opening physical stores.

“It’s the convergence of online and off-line. Whether you are a physical retailer converging into online or an online retailer converging into the physical, you have to have both parts to your armoury. I think that is where the future is,” he said.

But Rapp stressed this did not mean there would not be casualties along the way, because bad shopping centres would fail.

Rapp added that research about an online shoe store had revealed that people were buying one pair of shoes online but an average of three pairs of shoes when they went into the store, because people were sensory beings.

Vukile owns a total of R32.3billion in property assets, with half of these assets in South Africa and the balance offshore, with 46percent in Spain through Castellana Properties and 4percent in the UK through its investment in Atlantic Leaf.

In the six months to September, Vukile increased its investment in Spanish properties to 900 million (R14billion) from 308m, following the acquisition of five dominant shopping centres.

Rapp said the Spanish retail market was not feeling the same pressure as the UK market from online shopping.

He said the fact that Spain had a large tourist market helped because “nobody goes on holiday to shop online”.

Rapp said there were also cultural issues in Spain that favoured physical shopping centres, including the fact that the Spanish were very personable people and liked to go out, while food was also important part of their culture.

Shares in Vukile rose 2.04percent on the JSE on Tuesday to close at R21.50.