Vukile is evaluating potential acquisitions in South Africa, while it has declined some transactions in Spain due to pricing and strategic considerations.
The South African retail property REIT expects net operating income from its South African operations for the half year ending in September to rise by 8.5%.
“A number of potential acquisition opportunities are currently under evaluation in South Africa, while in Spain, several transactions have been evaluated and declined due to pricing considerations or a lack of strategic fit,” Vukile direcctors said on Tuesday.
Itumeleng Mothibeli, managing director of Southern Africa at Vukile, said income from the South African operations for the half year was driven by sustained high occupancy, additional solar capacity, water and utility savings, and operational cost efficiencies.
During the period under review, Vukile concluded the acquisition of Chatsworth Centre and Botshabelo Mall, while disposing of Durban Workshop. It recorded trading growth across its portfolio, with township properties growing by 4% and rural properties strengthening by 5.3%, resulting in a 5% rise in trading density.
In the township category, Atlantis Shopping Centre saw spending per head increase by 8.1%, while in the rural portfolio, Queenstown Nonesi Mall grew by 12.4%. Highland Mews underpinned the urban category, with an 8.4% increase in spending per head during the half-year period.
Continued progress on strategic leasing initiatives kept retail vacancies stable at 1.9%, with vacancies excluding retail offices at 1.3%, Mothibeli explained.
The company’s rental reversionary cycle strengthened to 4%, from 2.5% in the same period a year earlier. The cost-to-income ratio for the half year to September is expected to improve to 12.2%, from 12.4% in March 2026 and 12.5% in September 2025.
Furthermore, rent collection rates improved to 101%, while outstanding balances decreased by 42% since March 2026 to R16.9 million.
On a year-on-year basis, Vukile’s portfolio sales increased by 5.1% and continued to grow across all major categories, it said.
Reversions on renewals for the period improved to 4%, while new leases were concluded at rental growth of 7%, compared with 5.2% a year earlier, reflecting the pricing power of dominant, investment-grade assets.
Retention remained high at 91%, underpinned by strong trading densities and the under-rented nature of the portfolio. Renewals for the period were concluded at longer tenures and positive reversions.
About 85% of the 39,799m² renewed went to national and mid-tier tenants, while new leases were signed at a weighted average lease term of 4.2 years. The company’s top 10 tenants renewed about 12,000m² and expanded by a further 2,000m², which the company sees as “a clear signal of renewed confidence” in its South African portfolio.
“These top 10 tenants accounted for 23% of FY26 renewals and 4% of FY26 new lets. The top 10 tenants continue to renew and expand, reinforcing the quality of the portfolio,” said Vukile.
Despite declining some transactions in Spain, Vukile achieved significant footfall growth, led by Bonaire, which recorded growth of 19.5%. Vukile’s Alfonso Brunet said this demonstrated Bonaire’s full recovery and renewed momentum.
Footfall across Vukile’s Portuguese portfolio exceeded 15 million visits during the period from April to August 2026, making it the portfolio’s strongest performance for the five-month period. The stronger footfall during the period also reinforced the quality and attractiveness of Vukile’s Portuguese portfolio.
The Spanish and Portuguese portfolio under Castellana increased sales by 3.9%, “underlining the continued strength of Castellana’s retail platform”.
Forum Madeira and Alegro Sintra led the Portuguese portfolio, with gains approaching 5% for the period.
“The strong performance reflects robust consumer demand, attractive tenant mixes and the ongoing success of our asset management initiatives,” said Brunet.
THE NATIONAL