Disciplined dealmaking and capital allocation
During its second half,Vukile continued to rotate assets in line with its strategy, recycling capital into strategically aligned, earnings-accretive assets while avoiding cash drag.
Following Vukile’s R2.65 billion capital raise in October 2025, Castellana Properties, its 99.7% owned subsidiary, disposed of a portfolio of nine retail parks in Spain for €279 million. Proceeds were reinvested into high quality, higher-growth Spanish shopping centres, including the Berceo shopping centre in Logroño for €103.6 million, the Islazul shopping centre in Madrid for €318 million and, most recently, a 50% stake in the Splau shopping centre in Barcelona in joint venture with Unibail-Rodamco-Westfield (URW). Splau is valued at €350 million, with Castellana’s share amounting to €175 million.
These transactions align with Castellana’s strategy of acquiring dominant shopping centres with strong catchments, clear growth prospects and asset management upside.
Laurence Rapp, CEO of Vukile Property Fund, says, “Our strategic asset rotation this period has fundamentally reshaped, strengthened and diversified the Castellana portfolio, which now ranks among the strongest in Iberia and includes leading assets in Madrid, Barcelona and Valencia.”
Similarly in South Africa, Vukile disposed of four non-core assets for R625 million, while at the same time increasing its exposure to targeted core assets, including the acquisition of a 50% stake in Chatsworth Mall, a high-quality shopping centre in Chatsworth, KwaZulu-Natal, for R620 million. It also finalised agreements to acquire 100% of Botshabelo Mall, situated in the Free State’s largest township, for R443 million. Additionally, it invested in increasing its solar generation capacity.
Vukile also completed the acquisition of a 35% stake in Pradera, a pan-European retail property investment fund and asset manager with €5 billion of assets under management. The transaction provides access to more than 100 retail specialists and positions Vukile to explore expansion into additional European markets, in line with its strategy of operating with expert local management teams on the ground.
All acquisitions were funded from existing cash resources, with no requirement for additional equity capital.
Capital flexibility
Following the successful deployment of capital raised in October 2025, shareholders have unanimously approved a further 9% extension to Vukile’s authority to issue shares, reflecting confidence in its disciplined capital allocation.
Rapp comments, “Maintaining the flexibility to raise capital when stable market conditions prevail and advantageous pricing relative to tangible, accretive opportunities are in place, is a key part of our strategy.”
Strong operating performances
The South African portfolio delivered superb results. Net operating income increased by 10%. Sales grew 5.3% with almost all categories up, trading density rose by 5.1% and annualised footfall increased by 2%. Vacancies remained low at 1.7%, while rental reversions continued their positive momentum and grew by 3.5%. The portfolio’s cost-to-income ratio improved further to 12.4%.
Castellana’s Iberian portfolio delivered excellent metrics. Footfall grew by 3.3% and sales by 4.1%. Vacancies were a mere 1%, reflecting robust tenant demand. Rental reversions were positive, at 8.3% in Spain and 18.7% in Portugal, resulting in a blended rate of 10.3%.
On track for full-year guidance
For the full year, Vukile confirmed that it will meet its guidance of at least 9% per share growth in both funds from operations and dividends, delivering this increase from an already high base.
Rapp concludes, “We will continue to pursue opportunities that align with our long-term strategy and provide accretive returns for shareholders, reinforcing Vukile’s dedication to sustainable growth and value creation.”