International News

Vukile’s township retail assets lead its impressive festive season trading metrics

Maluti Crescent.

Vukile Property Fund’s South African and Spanish retail property portfolios delivered impressive increases in performance in November and December 2023.

Locally, all key operating metrics for the festive season were positive and in line with the REIT’s expectations with a particularly strong trading performance.

During December 2023, shopper foot fall in the portfolio increased by 2%. A quarter of shoppers who visited Vukile’s malls on Black Friday also returned during December. Township and rural malls enjoyed higher rates of repeat visitors.

The South African portfolio’s sales grew by 2.6% for the 2023 calendar year, with festive trading figures being notably higher than those in 2022. Trading densities grew by 7.6% compared to December 2022 with its township retail assets leading the performance with 13.2% growth, followed by rural shopping centres (+7.2%) and urban shopping centres (+4.5%).

During November and December 2023, the portfolio’s trading density increased by 4.3% compared to 2022 with the township portfolio enjoying an increase of 9.7%. Vukile’s rural assets rose by 3.3% and its urban properties produced growth of 1.3%.

The portfolio experienced a seasonal uptick in the fashion trade. Women’s wear sales surged 14.5% in December, marking an overall 10.4% increase for the final two months of the year. Meanwhile, men’s wear saw a healthy 8.1% growth in sales during November and December 2023. Sales in the grocery/supermarket category rose by 2.4%, while the fast foods segment saw a 5.4% rise, indicating steady demand for essentials.

Its Spanish retail portfolio led Europe with a 5.3% growth in footfall in the last quarter of 2023, per the Shopper Track report. The report indicates a strong positive trend in the Spanish retail market, especially the shopping centre segment. For the 2023 festive season, Spain ranked top with a 5.7% increase in visits. Castellana outperformed this benchmark, growing its portfolio footfall by 6.1%.

Castellana closed the 2023 calendar year with a new record footfall of more than 44.8 million visits for the twelve months, up 6.4% from 2022.

El Faro and Bahía Sur shopping centres attracted over 8 million visits in the 2023 calendar year – a new record for both. Similarly, Puerta Europa achieved its highest annual visitor numbers since opening, with almost 5 million visits or a 6.2% increase from 2022. Los Arcos and Habaneras also exceeded 2022 levels by an impressive 9.7% and 11.1%, respectively. Vallsur Shopping Centre broke its footfall record by 4.1% in 2023, with the opening of La Chismería last December – its new leisure and dining zone – exceeding retailers’ expectations.

In terms of sales, 2023 numbers improved by 7.9% over 2022, even though 2022 was one of the strongest years for Castellana’s tenants to date. The shopping centre portfolio demonstrated sales growth of 9.6% in 2023 versus 2022, outperforming retail parks at 3.7%.

Black Friday and festive season trading was extremely positive, with increases in sales of 7.0% in November and 6.1% in December – representing real growth in the portfolio.

All retail categories exceeded 2022 performance. The three categories achieving the highest increases in sales were media and technology (19.5%), health and beauty (14.2%) and food and beverage (12.3%). The leisure category, which demonstrated sales growth of 11.4% in 2023 vs 2022, finally surpassed 2019 levels by 3.7% after several tough trading years.

Based on a continuously strong trading performance and having completed nine months of its current financial year, Vukile is pleased to report that it expects to outperform the upper end of its upgraded guidance for both FFO per share (4-6% growth) and dividend per share (8-10% growth) for the year ending 31 March 2024.