March 30 2026 22:15
SOUTH AFRICA
Heriot Reit pulled off record distributable earnings growth during the six months to end-December 2025, with a 16.3% rise to R211m (2024: R181m) while maintaining its policy of distributing 100% of distributable earnings.
The company which was formed around 28 years ago as a property business by a group of entrepreneurs who appreciated the long-term potential of South Africa as a new democracy, has sored in recent times. Its net operating income increased by 6% in the reporting period, led by strong performances across its retail, industrial, office and residential/aparthotel portfolios.
Heriot’s retail assets, comprising 73% of Group net operating income (NOI), grew 5% despite the negative effect of its Platz Am Meer disposal at the end of June 2025, supported by strong tenant trading and low vacancies while its industrial assets, contributing 17% of group NOI, grew 3%. Platz Am Meer is a mixed-use property in Namibia, which was owned by Heriot’s subsidiary, Safari Investments. It needed to be sold so the grou could focus on managing local SA assets.
Heriot’s office portfolio delivered 16% growth (4% of group NOI), driven by improved leasing and cost management while its hospitality/aparthotels portfolio achieved 66% growth (6% of group NOI) on the back of full operational trading and improved occupancies.
Heriot increased its shareholding in Safari to 100% in late December 2025 which completed its give year takeover journey of the fund. Heriot also owns 100% of Thibault Holdings which develops assets in Cape Town. Heriot owns a 21.7% stake (excluding treasury shares) in JSE-listed Texton Property Fund.
Its weighted average cost of debt (WACD) was 8.88% for the period (December 2024: 9.99%), reflecting a 111-basis-point reduction, driven by favourable lending rates secured through the refinancing of its debt facilities.
Heriot’s loan-to-value (LTV) increased to 43.36% from 38.95% in June 2025 because of the R835m debt advanced to finance its Safari Investments buyout. The group will work to bring this figure below 40% in the coming months. LTV measures the strength of a property fund’s balance sheet. South African analysts prefer for it to lie below 40% or they fear that a balance sheet may carry too much risk.
Heriot’s board is targeting a 14% to 17% increase in the its dividend per share for the year to end-June 2026, revised upward from the previous range of between 10% to 15%.
alistair@propertyflash.co.za
