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COMMENTARY

NATURE OF OPERATIONS

Vukile is a high-quality, low‑risk retail-focused Real Estate Investment Trust (REIT), domiciled and operating in Southern Africa, with significant international exposure in Spain. The results reflect another year of strong operational delivery in both South Africa and Spain, driven by a hands-on proactive property asset management approach.

FINANCIAL PERFORMANCE
EXECUTIVE SUMMARY

Now more than ever, Vukile continues to draw on its prudent financial management, quality financial reporting and capital markets expertise to demonstrate robust balance sheet management to further augment its strong operational results. We remain true to our principles of long-term sustainability through the generation of predictable earnings streams, diversified between Southern Africa and Spain. We operate through a simple and transparent corporate structure that emphasises long-term results, generated through operational excellence and value-added asset management.

COMMENTARY

 

HIGHLIGHTS for the interim period

  
 
 

CONTINUED STRONG OPERATING RESULTS AND FINANCIAL POSITION LAY THE PLATFORM FOR FUTURE GROWTH

SOUTHERN AFRICA BUSINESS NOW TRADING AHEAD OF PRE-COVID-19 LEVELS

  • Normalised like-for-like NOI growth of 3.7%
  • Like-for-like trading density growth up by 4.3%
  • Rent collection rate improved to 99%
  • Strong letting activity with retail vacancies contained at 3.2%
  • Retention rate improved to 94%
  • Five of six malls damaged in the July unrest fully operational

RAPID RECOVERY OF SPANISH PORTFOLIO

  • Positive reversions at 1.35%
  • Vacancies contained at 2.9%
  • Rent collection rate 95%
  • Portfolio WALE of 13.4 years
  • Retail sales ahead of 2019 levels in September 2021
  • Footfall increased to 96.4% of 2019 levels in September 2021
  • Completed redevelopment projects with 94% of GLA let

STRONG BALANCE SHEET WITH WELL DIVERSIFIED FUNDING BASE

  • Interest cover ratio (ICR) of 4.4 times
  • LTV maintained at 42.8%
  • 97% of debt expiring in FY22 has been repaid or extended
  • Undrawn debt facilities increased to R2.7 billion
  • Repaid/converted €137.6 million (R2.4 billion) of Vukile EUR debt into ZAR facilities

FURTHER SIMPLIFIED BUSINESS MODEL

  • Sale of non-core assets of R522 million in SA and €26.5 million in Spain
  • Sale of 64% of Namibian portfolio anticipated in early 2022 and is expected to generate c.R700 million cash inflow
  • Supportive of Fairvest/Arrowhead merger

RETURN TO PAYMENT OF INTERIM DIVIDENDS

  • Cash dividend of 40.56 cents per share to be paid in December 2021