November 11 2026 16:40
JOHANNESBURG, SOUTH AFRICA
Dipula Properties, the JSE-listed diversified Reit, has completed the busiest year of acquisitions in its history. It bought 14 assets worth R3bn and raised R2bn in new equity, while growing its dividend faster than it had forecast.
CEO Izak Petersen explained that Dipula had patiently waited for deals when he spoke following the release of financial results for the year to end August 2026. During this period, the group grew distributable earnings 22% to R636m.
This translated into distributable earnings per share of 62.17c, up 8.6% on the previous year’s 57.26c and ahead of Dipula’s guidance of 7% to 8% growth. The payout ratio stayed at 90%. Dipula now expects distributable earnings per share to grow by 8% to 10% in its 2027 financial year.
The company described 2026 as a transformative year, and the scale of its dealmaking backs that up.
Its largest transaction to date was announced shortly before year-end. Dipula agreed to buy nine shopping centres from the Moolman Group and its co-investors for R2bn. The centres are spread across four provinces and have a combined gross lettable area of 89,168 square metres.
The portfolio strengthens Dipula’s national retail presence and its geographic diversification, and it adds to the group’s core focus on convenience, township and rural shopping centres. These are centres that give communities accessible, everyday shopping close to where people live.
The Moolman deal has received Competition Commission approval, and the properties are expected to start transferring to Dipula towards the end of November 2026.
The other acquisitions Dipula made over the period included Protea Gardens Mall in Soweto (R480m, transferred in January 2026), Woolworths Gezina in Pretoria, Bayer Klerksdorp inthe North West Province, Airborne Business Park near OR Tambo International Airport and Birch Acres Square in Tembisa (6,203 square metres, R145m, transferred in July 2026).
Protea Gardens Mall was the largest of five deals worth about R700m that Dipula announced in August 2025, at an average weighted yield of about 10%. Apart from the Tower Mall land, all of the acquisitions Dipula announced in 2025 had transferred by January 2026.
Around R800m of acquisitions transferred during the financial year. This means the earnings from a large share of the year’s dealmaking, including the entire Moolman portfolio, have not yet shown up in Dipula’s results. The acquisitions were funded through a mix of new debt and equity, proceeds from asset sales and dividend reinvestment programmes.
The gap between the 22% growth in total distributable earnings and the 8.6% growth per share reflects the new shares Dipula issued to fund its acquisitions. As income from the newly acquired assets comes through, management expects per-share growth to pick up, which is why it has guided for 8% to 10% next year.
A key turning point came in March 2026, when Dipula was included in the FTSE/JSE All Property Index (ALPI) and the SA REIT Index, Petersen.
Index inclusion put the company in front of a much wider pool of institutional investors and index-tracking funds. Together with strong company and sector performance, it supported a positive rerating of Dipula’s share price.
Dipula’s market capitalisation grew by 70% during the year, and its net asset value rose by 20%.
“We are proud of our achievements this year and how the fund has evolved since listing in 2011,” Petersen said.
The company said this created more capacity to pursue attractive opportunities in the market. In practical terms, a higher share price allows a Reit to issue new shares on better terms and use the money to buy income-producing property without diluting existing shareholders.
The R2bn of new equity Dipula raised shows that the market supports its strategy, the company said. Its acquisitions and capital raising together lifted net asset value per share by 6%.
The Public Investment Corporation increased its stake during the year, and by April 2026 it held more than 13% of Dipula’s issued ordinary shares.
Dipula has been selling property as well as buying it, using asset recycling to sharpen its focus on retail and industrial property. During the year it sold 20 non-core properties for R200m, including several offices.After year-end, it signed an unconditional agreement to sell all but one of its non-core residential properties for R268m.
The company expected these disposals, together with its retail and industrial acquisitions, to bring office exposure below 10% of the portfolio in the near future. Dipula’s management believes that retail and logistics properties offer better investment prospects than other property types do.
Proceeds from asset sales were used to repay debt and to fund asset improvements, acquisitions and sustainability projects.
The deals have also widened Dipula’s geographic spread, with Gauteng’s share of the portfolio falling from 58% to 54% since the start of the financial year.
At year-end, Dipula’s portfolio comprised 152 properties covering nearly 900,000 square metres across South Africa. The portfolio’s value rose13% to R12.2bn. This growth was driven by a 6.5% like-for-like increase in valuations, proactive asset management and the acquisitions that transferred during the year, reflecting stronger income prospects.
Retail property in township, rural and urban convenience locations made up 68% of portfolio value, with the value of the retail portfolio up 9%. Logistics and industrial property accounted for 15% (up 6.4%) and offices for 14% (down 2.7%). The small non-core portfolio of affordable residential property made up 3% (down 7.7%).
CEO Izak Petersen said the portfolio was “firing on all cylinders”.
Revenue excluding straight-lining rose by 11% to R1.7bn, up from R1.52bn in the previous year, while net property income grew by 12%.
Cost containment and improved recoveries remained priorities, and the total cost-to-income ratio declined marginally to 42.6%. Leasing was strong. The number of new leases signed rose by 20%, which helped reduce vacancies.
Total portfolio vacancies fell to 6% from 8.5% a year earlier, while retail vacancies fell to 4.5% from 5.1%. Vacancies in the much smaller office portfolio fell to 21.7% from 26.4%.
Tenant retention improved significantly, from 76% to 85%. Retail and industrial, Dipula’s two largest sectors, achieved retention of 87%, which supports sustainable income streams.
One of the most notable features of the results is that Dipula’s balance sheet got stronger during its buying spree. Gearing fell to 31.8% from 34.9%, and the interest cover ratio improved to 3.2 times from 2.8 times.
Dipula also refinanced R2bn of debt at more competitive margins, which lowered its net finance costs and extended its debt maturity profile.
It brought in an additional funder to broaden its funding base, and the company said a short window of more favourable interest rates during the year supported its performance.
At its interim results in May, Petersen said lower interest rates, cheaper refinancing and the roll-off of expensive interest rate hedges had been important tailwinds for earnings. At the time, he said the company could likely meet its guidance even if interest rates rose by 50 basis points. It went on to beat it.
Dipula also invested in the properties it already owns. It spent R122m on refurbishments and redevelopments to maintain and improve the quality of its portfolio, of which R55m was income-generating capital expenditure. A further R250m of capital expenditure is planned over the next 12 to 18 months.
The company more than tripled its installed solar PV capacity, from 5,300kWp to 17,500kWp.
This helped raise Dipula’s avoided carbon emissions by 50% year on year and contain costs, an important benefit for landlords and tenants given South Africa’s history of unreliable electricity supply and steep tariff increases.
Dipula expects to add another 6,000kWp to 8,000kWp of solar capacity in the 2027 financial year.
Its water-saving, waste management and biodiversity programmes also support the long-term sustainability of the portfolio.
Looking ahead, Dipula said South African property fundamentals are improving. It pointed to better access to capital, a narrowing gap between what buyers and sellers expect to pay, resilient tenant demand in defensive sectors and a gradual recovery in valuations.
The company said that a more reliable electricity supply and greater political and policy stability under the Government of National Unity have also strengthened business confidence.
However, it noted that subdued economic growth, renewed inflationary pressures, rising interest rates and persistent municipal inefficiencies and service delivery problems remain constraints on investment and growth.
Despite these challenges, Dipula said it remains positive about the sector’s prospects.
The group said it has a good growth pipeline and will continue to look at acquisitions that fit its portfolio objectives.
“Our capital allocation priorities remain the same: to grow our retail portfolio, increase our exposure to logistics and industrial properties and advance our sustainability programmes,” said Petersen.
“This transformative year reflects the positive results of consistency in responsible capital management, selective acquisitions and redevelopments, organic portfolio growth and hands-on disciplined asset and property management,” he said.
“Our assets will grow from R11bn at the start of the year to almost R14.5bn once the Moolman portfolio transfers. This increased scale, our inclusion in the investable universe, a portfolio well positioned to create value and a promising pipeline of targeted acquisitions in core defensive sectors all give us confidence in Dipula’s prospects,” said Petersen.
alistair@propertyflash.co.za
