Vukile HEPS slip to 61.57c

Vukile Property Fund, a local and offshore retail space investor, has reported strong earnings that showcase a rebound in demand within their sector, leading to decreased vacancy levels to new lows. The group revealed an improvement in net asset value per share of just under 7% and increased their dividend by 16%. Laurence Rapp, the CEO of Vukile Property Fund, joined CNBC Africa to discuss the factors driving their success amidst a challenging operating environment. Rapp highlighted the strength of their underlying tenant demand in both South Africa and Spain, with tenants actively seeking to expand their businesses, driving the need for more space in their well-located centers. In South Africa, their focus on prime retail locations and diverse tenant mix has positioned them favorably in the market, resulting in positive growth metrics across their portfolio. Vacancies have dropped to 2.3%, trading density has seen a 7% increase, and rental reversions have turned positive for the first time in two years, indicating a strong demand for space. Similarly, in Spain, Vukile has experienced negligible vacancies at 1.6% and positive rental reversions, reflecting the robust performance of their tenants. Despite concerns about increasing pressure on consumers due to factors like inflation and interest rates, Rapp remains optimistic about Vukile's resilience. With only 1% of their rental income tied to turnover, the majority of their income is secured through contractual agreements, providing stability even in challenging economic conditions. Rapp also discussed their proactive approach to energy generation, with investments in photovoltaic plants to boost their green energy capacity. Currently, 9% of their South African portfolio is green energy, with plans to double this capacity by 2026. In Spain, they are exploring renewable energy solutions to further enhance their sustainability. Looking ahead, Rapp anticipates continued growth in their portfolio, with expectations of 5 to 7% dividend growth in the coming year. Acquisitions of shopping centers in South Africa and a strategic stake in a listed competitor in Spain are set to drive further growth for Vukile. While the focus remains on South Africa and Spain for now, Rapp emphasized a cautious approach towards expansion into other African markets, citing challenges with currency mismatches in rental structures. Overall, Vukile Property Fund's solid performance and strategic growth initiatives position them well for future success in the retail space sector.