Spear H1’25 revenue up 6.3%

Spear REIT, a real estate investment trust focused on the Western Cape region, recently reported its H1’25 revenue up 6.3%. Quintin Rossi, CEO of Spear, joined CNBC Africa to discuss the company's performance and the state of the real estate sector in South Africa. Rossi highlighted the challenges and opportunities facing the sector, particularly in the Western Cape. He mentioned that while green shoots are emerging in the real estate sector, not all provincial economies are equal. The Western Cape, with its solid municipal infrastructure and the effects of semi-aggression, has been showing positive signs across all asset types. However, Rossi emphasized that Spear's strategy is to invest exclusively in the Western Cape, where they see strong investment opportunities. He pointed out the differences in municipal infrastructure levels between the Western Cape and other provinces, which impact investment decisions. Despite challenges in the first half, including a decrease in headline annuals per share and basic earnings per share, Spear remains optimistic about growth prospects. Rossi discussed the company's focus on managing operating costs and the recent transfer of a R1.1 billion asset portfolio. Looking ahead, Spear sees potential for further consolidation opportunities within the sector in the Western Cape. Rossi also highlighted the office portfolio as a strong performer, with significant vacancy let-up and growth in the BPO industry. Overall, Spear is positioning itself to become a meaningful mid-cap REIT with a focus on the Western Cape region.