Vukile to list Spanish subsidiary as it grows offshore
Published Date: 2018-05-31 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments
The real estate investment trust is experiencing strong deal flow and seeing the benefits of the operating infrastructure it has created in Spain
Vukile Property Fund plans to list Spanish subsidiary Castellana Properties on the Madrid Junior Board in July as it eyes more growth opportunities in that country. The real estate investment trust (REIT) says the listing will be by way of an introductory offer as it doesn't plan to raise external capital immediately.
Reporting full-year results, Vukile said it had made good progress with its Spanish expansion strategy, concluding acquisitions worth €260 last year and recruiting a high-calibre local management team to head its operating platform in that country.
"Castellana is set to continue growing apace as we are experiencing strong deal flow and seeing the benefits of the operating infrastructure we have created on the ground," Vukile said in a statement. "Moreover, its profitability should increase comfortably in the year ahead as certain once-off costs will not recur."
Its Spanish portfolio is now worth R4.5 billion, helping to increase the value of its direct property investments to R19.1 billion from R13.6 billion a year ago. On top of that, it owns a 34.9% stake in UK-focused Atlantic Leaf Properties, 31.4% of Fairvest, and 26.3% of Gemgrow Properties.
The REIT grew net profit available for distribution by 17% to R1.31 billion in the year to end-March and raised its annual dividend by 7.7% to 168.82c per share, in line with guidance. Its net asset value per share increased by 7.6% to R20.10.
Vukile says it plans to look for further expansion opportunities in South Africa and Spain, and, where possible, to recycle non-core assets into its two core markets.
Assuming no material adverse change in trading conditions and large corporate failures, it expects to deliver growth in dividends of between 7.5% to 8.5% in the year ahead.
Its shares closed 0.6% higher at R21.53.
Vukile - VKE, annual results.-- Garreth Elston (@Africanadian) May 30, 2018
Dividend per share growth 7.7% (168.82 cents per share)
Like-for-like net income growth of 6.5%
NAV per share up 7.6%
LTV (net of cash) 28.2%
Vacancies down to 3.7% from 4.2% in 2017
Average escalations down to 7.2% from 7.4% in 2017