International News

Vukile Property Fund raises R1bn in equity as it eyes a pipeline of growth opportunities

Laurence Rapp.

Vukile Property Fund will issue R1 billion of new ordinary shares following a successful accelerated book build. The equity raised will boost the REIT’s financial agility to capitalise on a pipeline of growth opportunities, aligned with its long-term strategy.

The Group is a specialist REIT with a focus on owning dominant retail assets across South Africa and Spain. Its assets are valued at around R40 billion with 40% in South Africa and 60% in Spain. Its Spanish assets are held in the 99.5% Vukile-owned Madrid-listed subsidiary, Castellana Properties Socimi. Both of Vukile’s portfolios continue to deliver excellent results and solid performance metrics.

In early February 2024, Vukile announced that it would exceed the upper end of its guidance for FY2024 of growth in funds from operations (FFO) per share of 4% to 6% as well as growth in its dividend per share of 8% to 10% which was met with enthusiasm from investors. The Group intends to deploy the proceeds of the equity raise into strategic investment opportunities.

As part of Vukile’s ongoing growth strategy, we have identified and are evaluating an attractive pipeline of financially accretive, strategically aligned direct property acquisition opportunities in both South Africa and Spain. Pricing remains fragmented in the current market environment, which rewards certainty and speed of execution. The capital raised will place Vukile in a financially agile position underpinned by a strong balance sheet and enhanced funding optionality,” comments Vukile CEO, Laurence Rapp.

In the short term, the proceeds of the equity raise will be used to temporarily reduce borrowings in anticipation of the closing of potential acquisitions.  The capital raise will also reduce Vukile’s loan-to-value ratio (LTV).

Investec Bank Limited acted as the sole bookrunner for the equity raise.