September 4 2025 13:45
SOUTH AFRICA
Some days ago, JSE-listed retail specialist landlord Vukile Property Fund, issued R500m in senior unsecured corporate bonds across in senior unsecured corporate binds across three- and seven- year maturities, achieving market-leading pricing, it said.
The offering was met with strong demand, attracting more than R3bn in bids, more than six times the target issue size.
The three-year tranche of R214m was priced at 102 basis points (bps) and the seven-year tranche of R286m was priced at 135bps, which were both tighter than initial price guidance. The weighted average margin of 121bps represented a substantial improvement over existing debt maturing in Vukile’s 2026 financial year, which will be re-paid, lowering Vukile’s cost of capital.
“We are pleased with the strong demand and favourable pricing received. The substantial support for the auction demonstrates the market’s endorsement of Vukile’s disciplined approach to capital allocation, our high-quality assets and our long-term investment strategy,” said CEO Laurence Rapp.
Absa Bank Limited, through its Corporate and Investment Banking division, acted as sole lead arranger.
“The keen investor interest, with over 21 institutions participating in the auction, demonstrates Vukile’s strong position as a meaningful and regular DCM issuer. Vukile’s track record of financial performance and a supportive market culminated in an excellent auction and issuance outcome,” said Marcus Veller, Principal, Debt Capital Markets of Absa.
Maurice Shapiro, Group Head of Treasury at Vukile, said: “The record low pricing of this bond issuance marks a significant milestone in our debt capital markets strategy. The favourable outcome reduces Vukile average cost of debt and extends our maturity profile, reinforcing balance sheet strength and flexibility.”
In July 2025, GCR Ratings upgraded Vukile’s national scale long-term issuer credit rating to AA+(ZA) from AA(ZA) and affirmed its short-term rating at A1+(ZA), with a stable outlook. GCR highlighted that “Vukile’s property performance remains a key rating strength,” citing its portfolio as a consistent outperformer in the broader property sector.
Vukile is a specialist retail real estate investment trust (Reit) with a blue-chip-tenanted portfolio valued at approximately R50bn, operating across South Africa, as well as Spain and Portugal through its 99.6% owned Spanish subsidiary, Castellana Properties.
alistair@propertyflash.co.za
