Vukile Property Fund
Market capitalisation: R15bn Value of assets: R18.7bn Focus: Retail Geographic exposure: SA (79%), Namibia, UK, Spain
Loan-to-value ratio: 23% (Post the Since 2004, retail-focused REIT Vukile has posted an unbroken track record of growth in distributions. Fullyear distribution growth of 7.1% to 31 March was reported, and growth of 7% to 8% is expected in the coming year.
In SA the focus remains on retail. Retail property assets comprise 91% of Vukile’s direct portfolio, with retail vacancies standing at
3.6% at year-end.
Exposure to logistics, industrial warehousing and retail parks in the UK comes via Vukile’s holding in Atlantic Leaf. This portfolio posts zero vacancies and distribution growth for the 2017 financial year is up 21%.
A key area of growth for Vukile is Spain. The company recently acquired a R2.8bn Spanish retail Debt hedged:
Dividend yield: 7.96% IRESS-compiled analyst rating: One buy portfolio of nine properties that has boosted its offshore exposure to 21% and its Castellana Spanish portfolio to 11 properties.
The deal gives traction to Vukile’s strategy of investing in the developed markets of Western Europe and, says CEO Laurence Rapp, “creates a solid, significant base for accretive acquisitions in the region”.
“The portfolio acquired is defensive, with a long WALE (weighted average lease expiry) and rentals in line with market. Vukile has structured the acquisition to make use of low financing costs overseas and thus the deal is accretive,” Hook tells finweek. “We believe there is limited upside in terms of yield compression, although the assets should deliver rental growth and thus a value increase.” ■