April 11 2025 19:20
SOUTH AFRICA
Vukile Property Fund (VKE: JSE), the specialist retail real estate investment trust (Reit), will acquire the high-performing Forum Madeira, a 100% let open-air shopping centre located in Funchal, the capital of the island of Madeira, off the northwest coast of Africa. The asset will be bought for €63.3m, funded primarily from existing cash reserves, at an initial net operating income yield of 9.5%.
Following seven years of growing its Spanish retail property portfolio from its South African base, Vukile made the entry into Portugal just over six months ago, acquiring three prime retail assets, swiftly followed by a fourth. Forum Madeira will become its fifth Portuguese shopping centre. Approximately two-thirds of Vukile’s assets and 60% of earnings are now offshore.
“Successfully securing this strategic asset in a particularly high-growth region further reinforces Vukile’s track record of acquisition agility and strengthens our leading portfolio across the European economic powerhouses of Spain and Portugal,” said Laurence Rapp, CEO of Vukile Property Fund.
Forum Madeira spans 21,472 square metres of gross lettable area over three floors. It is anchored by Inditex Group brands, making it the only centre on the island to offer the full suite of this popular brand mix, a Pingo Doc supermarket and Cinema NOS, the island’s main cinema destination.
Serving more than 250,000 residents and 2.3-million tourists annually, Forum Madeira has achieved high footfall and strong trading densities. Located in Western Funchal, a hub of upscale hotel and residential growth, the centre benefits from the region’s robust economy.
Madeira is a market with positive momentum. Since 2019, GDP in the Madeira Autonomous Region has grown 23.4%, supported by low and decreasing unemployment and increased tourism as Portugal’s third most visited destination after Porto and Lisbon.
The acquisition of Forum Madeira aligns with Vukile’s” strategy to grow its Iberian portfolio with high-performing assets that are delivering strong cash flows and represent further value creation upside through targeted asset management”, according to Rapp.
In the case of Forum Madeira, this included refining the retail roster and adding new brands, he said.
“Having grown our Iberian portfolio vastly over the past year, this acquisition marks a shift in our focus to crystalising plans for optimisation and deepening value within the portfolio,” said Rapp.
Vukile believes that the Iberian peninsula offers long-term returns as both Spain and Portugal experience relatively high economic growth, infrastructure investment and impressive tourism. Spain is the second most visited country in the world.
alistair@propertyflash.co.za
