Vukile raises R1 billion in equity as it eyes growth opportunities

Vukile Property Fund (JSE: VKE) will issue R1 billion of new ordinary shares, following a successful accelerated book build. The equity raised will boost Vukile’s financial agility to capitalise on a pipeline of growth opportunities, aligned with its well-established long-term strategy.

Vukile is a specialist retail real estate investment trust (REIT) developed on the foundation of a well-defined, specialised growth strategy, with a focus on owning dominant retail assets across South Africa and Spain. Vukile adopts a pro-active approach to asset management and a strong focus on customer centricity as the driver of stakeholder value creation.

Vukile’s assets are valued at around R40 billion, with 40% in South Africa and 60% in Spain. The Spanish assets are held in the 99.5% Vukile-owned Madrid-listed subsidiary, Castellana Properties Socimi.

Both South African and Spanish portfolios continue to deliver excellent results and solid performance metrics with Vukile’s proactive asset management unlocking value from the well-crafted portfolio of properties, most of which are dominant in their respective catchment areas.

The company’s strong performance indicators, clear strategy and track record of delivery underpin market confidence in Vukile’s prospects and performance. Earlier this month, Vukile’s announcement that it would exceed the upper end of its guidance for FY2024 of growth in FFO per share of 4% to 6% as well as growth in dividend per share of 8% to 10% was met with enthusiasm by investors. Vukile intends to deploy the proceeds of the equity raise into strategic investment opportunities.

Laurence Rapp, CEO of Vukile Property Fund, says, “As part of Vukile’s ongoing growth strategy, we have identified and are evaluating an attractive pipeline of financially accretive, strategically aligned direct property acquisition opportunities in both South Africa and Spain. Pricing remains fragmented in the current market environment, which rewards certainty and speed of execution. The capital raised will place Vukile in a financially agile position underpinned by a strong balance sheet and enhanced funding optionality.”   

Vukile remains firmly focused on maintaining a conservative balance sheet as its foundation for efficient capital management. In the short term, the proceeds of the equity raise will be used to temporarily reduce borrowings in anticipation of the closing of potential acquisitions.  The capital raise will also reduce Vukile’s loan-to-value ratio.

Investec Bank Limited acted as the sole bookrunner for the equity raise.