JSE-listed Vukile Property Fund Limited (Vukile or the REIT) is a retail-focused REIT with a South African and Spanish asset underpin. In South Africa (SA) Vukile owns a portfolio of direct property assets, while the Spanish investment is held through a 99.5% stake in Castellana Properties SOCIMI SA (Castellana), listed on the Spanish BME Growth market for small and medium sized companies. In both regions, the portfolio mostly consists of a mix of convenience-oriented shopping centres and retail parks, that are primarily anchored with grocery or essential services tenants and are regionally dominant in their non-prime catchment areas.
Vukile, through Castellana, has also acquired a strategic 25.7% shareholding in Lar Espana Real Estate SOCIMI, S.A. (Lar Espana), a Spanish retail-focused REIT (with GVA of €1.4bn) externally managed by Grupo Lar. The domestic shareholding in Fairvest Limited (JSE listed REIT) has been reduced to 6% and is considered non-core. Vukile has also established a property asset management division for third party assets, which can provide a low-risk entry point into new markets.
In our analysis, we assess Vukile’s consolidated financial position in respect of its balance sheet and earnings. Nevertheless, in determining property performance and competitive positions we recognise that Vukile’s South African portfolio, and the Castellana portfolio operate as standalone entities with separate management teams, dealing with different market conditions.
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