Property Flash


February 20 2024

Vukile Property Fund (JSE: VKE) will issue R1bn of new ordinary shares, following an accelerated book build.  The equity raised will boost Vukile’s financial agility to capitalise on a pipeline of growth opportunities, aligned with its long-term strategy which includes investing in SA and Spain.

Vukile is a specialist retail real estate investment trust (Reit), with assets are valued at around R40bn, with 40% in SA and 60% in Spain. The Spanish assets are held in the 99.5% Vukile-owned Madrid-listed subsidiary, Castellana Properties Socimi.

Both South African and Spanish portfolios continue to deliver excellent results and solid performance metrics with Vukile’s proactive asset management unlocking value from the well-crafted portfolio of properties, most of which are dominant in their respective catchment areas, says Vukile CEO Laurence Rapp.

Earlier this month, Vukile announced that it would exceed the upper end of its guidance for its financial year 2024 of growth in funds from operations per share of 4% to 6% as well as growth in dividend per share of 8% to 10% was met with enthusiasm by investors. Vukile would deploy the proceeds of the equity raise into strategic investment opportunities.

Rapp said: “As part of Vukile’s ongoing growth strategy, we have identified and are evaluating an attractive pipeline of financially accretive, strategically aligned direct property acquisition opportunities in both South Africa and Spain. Pricing remains fragmented in the current market environment, which rewards certainty and speed of execution. The capital raised will place Vukile in a financially agile position underpinned by a strong balance sheet and enhanced funding optionality.”  

He said Vukile would maintain a conservative balance sheet as its foundation for efficient capital management. In the short term, the proceeds of the equity raise will be used to temporarily reduce borrowings in anticipation of the closing of potential acquisitions.  The capital raise will also reduce Vukile’s loan-to-value ratio.

Investec Bank Limited acted as the sole bookrunner for the equity raise.

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