Vuk­ile Prop­erty Fund

Finweek English Edition - - Cover Story -

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:

3.4 years)

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.” ■

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