February 27 2026 15:10
CAPE TOWN, SOUTH AFRICA
Western Cape-focused Spear Reit reported improved operations momentum in its financial year 2026 pre-close presentation on Friday, driven by portfolio expansion, solid financial performance, high occupancy levels and strong cash collections.
In January 2026, management revised its distribution per share (DIPS) guidance for the year ending 28 February 2026 to growth of 5%–6% compared with the 2025 financial year, with performance tracking toward the upper end of that range.
“Management is pleased to report that Spear will achieve a mission-statement-aligned outcome for financial year 2026, resulting in DIPS guidance of 5%–6% higher than financial year 2025, which is trending towards the upper end of its range at year end,” CEO Quintin Rossi said.
Highlights:
- DIPS guidance revised to 5%–6% growth for FY2026, trending toward the
upper end - Portfolio value increased to R6.8bn across 42 Western Cape assets
- 97.28% occupancy rate and 99.13% cash collections year to date
- R1.074 billion deployed into three acquisitions at a 9.54% average yield
- Portfolio GLA increased by 137 090 m²
- Weighted average lease escalation at 7.05%
- Loan-to-value ratio of 24.62% and interest cover ratio of 4.39 times
- R400m liquidity available net of allocations
- R749m capital raised and R152 million Section 42 share issue
concluded - 28 assets fitted with solar infrastructure, generating R25.9m in gross
revenue year to date
Year to date, Spear’s portfolio value increased to R6.8bn across 42 Western Cape assets, with total GLA of approximately 627 000 m² and an occupancy rate of 97.28%. Cash collections for the period reached 99.13%. Operationally, the portfolio’s lease profile was stable, with an average unexpired lease term of approximately 29 months and in-force annual escalation of 7.05%. Overall rental reversions were marginally just under flat, while renewals delivered growth of 5.83%.
During the period, Spear completed R1.074bn in acquisitions, adding three Western Cape assets to the portfolio at an average yield of 9.54%. These included Berg River Business Park in Paarl, Maynard Mall in Wynberg and Consani Industrial Park in Goodwood.
“Spear’s growth strategy is delivering in line with its strategy, with the recently acquired assets adding 137 090 m² to portfolio GLA and increasing portfolio valuations to R6.8bn prior to fair value adjustments,” said Rossi.
Industrial assets, the largest component of the portfolio by GLA, value and revenue, reported occupancy of 98.77% and positive rental reversion of 2.38%. Retail occupancy stood at 96.68%, while the commercial portfolio recorded occupancy of 92.64% alongside continued letting momentum, total portfolio occupancies since the half year results have increased by 2,25% to 97.28%. The balance sheet was primed for growth and remains well within covenant levels, with a loan-to-value ratio of 24.62% and an interest cover ratio of 4.39 times. Liquidity available net of allocations amounted to R400m. During the year, Spear raised R749m in equity capital and concluded a further R152m Section 42 share issue.
The group also expanded its renewable energy footprint, with 28 assets fitted with solar infrastructure and two additional systems under construction. Solar PV contributed R25.9m in gross revenue and R17.3 million in net operating income year to date. DIPS guidance for financial year 2026 remains subject to the stated assumptions for the remainder of the financial year, and the payout ratio will remain at 95%, as approved by the board.
“The FY2026 pre-close reflects the outcomes of a year where momentum was built from start to finish, driven by strong operational and financial performance. This was achieved through Spear’s focus on top-line revenue growth, disciplined cost control and growth in sustainable cash-backed net operating income, enabled by active asset and hands-on property management. Kudos to the entire Spear
team, who remain materially invested in achieving of our strategic objectives set for FY2026,” said Rossi.
Spear was founded in 2011 as a private equity real estate investment business, focusing on owning Western Cape assets with a preference for Cape Town. The founders of Spear, Mike Flax, Abu Varachhia, and Quintin Rossi, have taken Spear from a private equity fund to a JSE-listed real estate investment trust, making it the only regionally focused real estate investment trust on the JSE that concentrates exclusively on owning high-quality assets within the Western Cape. Since being listed on the JSE in November 2016 with assets valued at R1.4bn, Spear has grown significantly with a high quality diversified portfolio valued at R6.8bn, comprising a mix of commercial, industrial, retail, and mixed-use properties in the Western Cape.
Spear is a fully internally managed Reit conducting all asset, property, financial and development management in-house. Spear owns No. 2 Long Street in Cape Town, where its head office is currently located.
alistair@propertyflash.co.za
