Vukile records lowest vacancies since listing

• Space take-up and demand is high across its SA shopping centres

JSE-listed Vukile Property Fund recorded the lowest vacancies since listing in 2004 due to high space take-up and demand at its SA malls.

During the 2023 financial year pre-close presentation on Monday, Vukile said vacancies reached 2% from 2.6% in March 2022 or about 6,000m² — the lowest on record since the company listed.

Vukile is a retail real estate investment trust (Reit) with assets valued at R35bn. Of these, 44% consist of urban, commuter, township and rural malls in SA, with 56% in Spain held through the Madrid-listed subsidiary Castellana Properties Socimi.

“We continue to experience strong demand for space from national listed and secondary unlisted retailers either expanding or taking up new space at our malls,” said Itumeleng Mothibeli, MD of Vukile.

Mothibeli said trading metrics within the SA portfolio continued to improve in the 12 months, resulting in net operating income growth of 5.3% with average turnover of 6.4%.

National listed retailers including PEP, Mr Price, TFG and Clicks, and unlisted retailers such as Fashion World, Signature Cosmetics, PQ Clothing and Roots Butchery continue to choose to have a presence at Vukile Malls malls.

TENANTS

“Now that the pandemic has receded, tenants are closing deals much quicker, hence occupancy levels are high.”

During the period Vukile concluded 497 lease renewals with a contractual value of R968m, and 161 new leases valued at R218m.

Vukile said its balance sheet remains strong, with 88% of group, and 79% of SA interestbearing debt hedged.

It has R3bn of cash and undrawn committed facilities, with all 2023 financial year debt expiries having been repaid, refinanced or renegotiated.

For the 2023 financial year, the company expects funds from operations per share and distribution per share of between 5% and 7%.

In a separate statement, Vukile said that it has launched an equity raise of about R500m by issuing new shares through an accelerated book build process.

Due to demand, Vukile increased the oversubscribed book build to R700m with 56million new shares to be issued at R12.50 per share. Vukile will apply the proceeds to various investment opportunities strategically aligned and accretive to the company.