Wrap Text
Audited condensed annual results for the year ended 28 February 2026
Delta Property Fund Limited
(Incorporated in the Republic of South Africa)
(Registration number 2002/005129/06)
JSE share code: DLT
ISIN: ZAE000194049
(Approved as a REIT by the JSE)
("Delta" or the "Company" or the "Group")
AUDITED CONDENSED ANNUAL RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2026
HIGHLIGHTS
* Net profit for the year increased by 221.9% to R127.0m (February 2025: net loss of
R104.2m)
* Average rental collections 99.8% (February 2025: 95.1%)
* Weighted average lease expiry 12.9 months (February 2025: 14.7 months)
* Interest cover ratio 1.5 times (February 2025: 1.4 times)
* Vacancy rate improved to 27.3% (February 2025: 31.9%)
* Covenant loan to value ratio 56.7% (February 2025:59.5%)
* SA REIT net asset value per share R3.6 (February 2025: R3.4)
This report outlines the Group's financial performance for the year ended 28 February
2026 ("FY26" or "the period" or "the reporting period"). The Group is a South African
B-BBEE level 1 property investment company with a diversified portfolio of 72 (FY25:
83) properties valued at R6.3bn (FY25: 6.4bn), spanning 718 328m² (FY25: 781 568)
of gross lettable area (GLA) across eight provinces. The portfolio provides well-
located commercial office space primarily to government departments, state-owned
enterprises, and private sector tenants, with strong access to public transport and
street-level retail amenities.
The Group's strategy remains focused on disciplined capital allocation, asset
management, and ongoing portfolio optimisation to enhance operational performance
and support sustainable long-term returns. During the year, the Group remained
focused on lease renewals and letting activities, reducing vacancies, improving
rental collections, disposing of non-core assets, and prudent debt reduction, all
of which contributed to strengthening the Group's operational and financial position.
For FY26, the Group delivered significantly improved financial results returning to
profitability in a challenging operating environment. Performance was underpinned
by stable revenue streams, disciplined cost management, balance sheet optimisation,
and lower funding costs, reflecting continued execution of the Group's strategic
priorities.
Audited Audited Change
28 February 28 February %
2026 2025
Rental income (R'm) 1 150.8 1 140.4 0.9
Profit/(loss) for the period (R'm) 127.0 (104.2) 221.9
Basic and diluted profit/(loss) per share 17.8 (14.6) 221.9
(cents)
Headline and diluted earnings per share(cents) 14.9 10.4 43.3
SA REIT funds from operations/distributable 17.3 15.1 14.6
earnings per share (cents)
Average value per property R8 771.2/m2 R8 175.5/m2 7.3
Total revenue (excluding straight-line rental accrual) increased by 0.9% to R1.15bn
(FY25: R1.14bn), due to contractual escalations and improved recoveries of R226.2m (FY25:
R216.7m). This revenue performance was achieved despite a reduced portfolio following
strategic disposals, vacancies, and rental reversions.
Net operating income decreased by 6.4% to R674.9m (FY25: R721.4m), primarily due to
higher property operating costs. Total property operating expenses increased to R473.0m
(FY25: R422.0m), driven by higher utilities, service costs, and repairs and maintenance
associated with essential infrastructure and asset preservation initiatives.
Administration expenses declined by 7.7% to R93.9m (FY25: R101.7m), reflecting sustained
ongoing cost-containment measures.
The Group's property portfolio was independently valued at year-end, resulting in a fair
value gain of R20.4m (FY25: loss of R178.3m). This improvement reflects portfolio
optimisation, asset management initiatives, and disposals, which have strengthened
valuation stability and reduced downside volatility. A fair value loss of R15.4m (FY25:
R43.6m) was recognised on listed securities (investment in Grit), which were disposed
of in November 2025 for R18.7m, with proceeds utilised to reduce debt.
Finance costs decreased to R412.4m (FY25: R463.0m), due to reduced debt levels following
disposal proceeds applied to reduce borrowings, debt amortisation and lower interest
rates. Expected credit losses increased to R27.4m (FY25: R25.5m), driven by higher trade
receivables.
Cash generated during the period amounted to R604.9m, comprising R591.7m from operations,
R0.2m in interest income and R13.0m from property disposals. Cash was deployed toward
finance costs of R408.0m, net taxation of R31.0m, capital expenditure of R80.4m, lease
liability settlements of R3.1m, and debt amortisation payments of R103.1m. The Group
maintained active liquidity management and utilised its revolving credit facility where
required to support short-term funding requirements.
The Group remains focused on strengthening operational efficiency, optimising portfolio
composition, reducing vacancies, and maintaining disciplined capital allocation and
balance sheet management to support sustainable earnings growth and long-term value
creation.
LETTING
During the period, leases representing 139 666m² of GLA were renewed at a weighted
average lease term of 1.3 years. The Group also concluded new leases of 20 881m2, with
a weighted average lease term of 1.4 years. Portfolio vacancies improved to 27.3% from
31.9% in FY25, driven by property disposals and the conclusion of new leases. The WALE
decreased from 14.7 months to 12.9 months, mainly as a result of most lease renewals
being concluded for a 12 month period. The Group remains committed to securing longer-
term lease agreements to support the long-term stability and sustainability of the
portfolio.
ARREARS AND COLLECTION
At period-end, trade and other receivables amounted to R160.5m, compared with R155.4m
in FY25. The average collection rate improved to 99.8% of billings from 95.1% in FY25,
reflecting stronger collections.
A number of arrear debtor balances were successfully collected post year-end. The
recovery of these long-outstanding amounts demonstrates the effectiveness of
management's focused arrears recovery strategy and reflects the Group's continued
commitment to improving collections, reducing credit risk exposure, and enhancing the
overall quality of the debtors' book. A total provision for bad debts of R39.7m was
recognised at year-end (FY25: R61.0m), representing approximately 26% of trade
receivables.
DISPOSALS
Delta's portfolio optimisation strategy includes the disposal of selected non-core,
largely vacant properties. During the reporting period, 11 properties with a total GLA
of 64 077m² were transferred for gross proceeds of R186.1m, and one property with a GLA
of 2 812m² was transferred after year-end for gross proceeds of R19.0m. Four properties
sold, with a combined GLA of 45 221m², are expected to transfer before the end of the
financial year for total gross proceeds of R112.6m. In addition, on 6 November 2025 the
Group disposed of its entire holding of 14 869 210 shares in Grit at 5.45 pence per
share, being the prevailing market price.
FUNDING
Total interest-bearing debt decreased to R3.6bn during the reporting period, from R3.9bn
in FY25, mainly due to disposals and amortisation payments. Capital repayments for the
period totaled R291.3m (FY25: R237.5m), funded by R170.1m (FY25: R140.5m) proceeds
received from property disposals, R18.1m from the sale of the Grit Shares and R103.1m
(FY25: R92.9m) from amortisation payments. Despite three interest rate reductions of 25
basis points each by the South African Reserve Bank (effective 29 May 2025, 31 July 2025
and 20 November 2025), finance costs remain high. The weighted average cost of funding
for the period was 10.3% (FY25: 11.2%). The Group's ICR improved slightly to 1.5 times,
and the covenant LTV ratio strengthened marginally from 59.5% to 56.7 %.
During the reporting period, the Group successfully renewed maturing debt facilities
with its funders. These included Nedbank R2.4bn (extended to April 2026 and subsequently
to April 2027) and three Investec facilities which were consolidated into a single
facility, which was then renewed to March 2027. In addition, subsequent to year end,
Standard Bank renewed the debt facility that expires in May 2026, namely tranche 1 of
R28.8m, to May 2028 and tranche 2 of R520.9m to November 2028. In line with its capital
management strategy, the Group continues to engage with its lenders regarding more
favourable pricing, extending debt maturities, and restructuring amortisation profiles.
The short-term objective remains to achieve a debt maturity profile of between two and
three years. The Group also increased revolving credit facilities from R64.3m to R82.0m,
of which R56.5m had been drawn at year-end.
GOING CONCERN
The Board has carried out a review of the Going Concern assessment of the Group, as
disclosed in the Going Concern note to the financial statements. Having considered the
solvency and liquidity and the cash flow projections, the Board is satisfied that the
Group is in a financial position to meet its cash requirements for the foreseeable future
and accordingly is able to continue trading as a going concern.
DIVIDEND
Delta's SA REIT funds from operations ("FFO") per share amounted to 17.3 cents for the
reporting period, compared to 15.1 cents in FY25. Following the solvency and liquidity
assessment conducted in terms of section 46 of the Companies Act, and taking into account
cash flow forecasts, expected working capital requirements, capital expenditure
requirements and contracted tenant installation commitments relating to lease renewals,
the Board resolved not to declare a dividend for FY26 (FY25: nil).
AUDIT REPORT
The Company's auditors, KPMG Incorporated, have issued an unmodified audit opinion on
the annual financial statements for the reporting period, which includes an emphasis of
matter in respect of a material uncertainty related to going concern, as set out below:
"We draw attention to note 34 in the consolidated and separate financial statements,
which indicates that, as at 28 February 2026 the Group and Company's current liabilities
exceeded its current assets (including non-current assets held-for-sale) by R2.5 billion
and R2.5 billion respectively.
As stated in note 34, these events or conditions, along with other matters as set forth
in note 34, indicate that a material uncertainty exists that may cast significant doubt
on the Group and Company's ability to continue as a going concern. Our opinion is not
modified in respect of this matter."
The full audit opinion, including the key audit matters, forms part of the FY26 AFS
and is available for inspection at the following weblink:
https://www.deltafund.co.za/financial-results/
PROSPECTS
The South African listed property sector continues to show gradual signs of recovery,
supported by improved electricity supply, stabilising inflation and renewed investor
engagement across the sector. However, the macro-economic environment remains uncertain
due to persistent geopolitical tensions, high fuel prices and a cautious interest rate
outlook. Recent developments in the Middle East, together with the ongoing conflict in
Ukraine, continue to place pressure on global energy prices, inflation expectations and
supply chain. Although inflation in South Africa has moderated, the South African Reserve
Bank remains focused on its long-term inflation objective, which may result in interest
rates remaining higher for longer should inflationary pressures persist.
Within the office sector, operating conditions remain mixed. Demand for well-located,
energy-resilient buildings has remained relatively stable in selected nodes, while weaker
nodes continue to experience pressure from excess supply, longer tenant decision-making
cycles and constrained rental growth. Corporates remain focused on cost containment and
space optimisation, contributing to a competitive leasing environment. Against this
backdrop, the Group remains focused on executing its strategic priorities in a
disciplined manner. Key priorities include strengthening the balance sheet through the
disposal of non-core assets, reducing debt, improving covenant metrics, securing lease
renewals, reducing vacancies and maintaining stringent cost controls. These initiatives
are aimed at protecting cash flows, improving portfolio quality and supporting a more
sustainable capital structure. Operationally, the Group continues to actively manage
controllable costs while mitigating the impact of above-inflation increases in municipal
charges, electricity tariffs, repairs and maintenance expenditure and other
administration costs.
The Group remains committed to proactive engagement with lenders, tenants and prospective
purchasers of non-core assets. Continued progress on disposals, leasing activity and
cost optimisation is expected to support the Group's continued recovery trajectory.
While the medium-term outlook is expected to improve as economic conditions stabilise,
the pace of recovery will remain dependent on inflation trends, interest rates, economic
growth and geopolitical developments.
The prospects have not been audited, reviewed or reported on by the Group's independent
external auditors.
ABOUT THIS ANNOUNCEMENT
The content of this announcement is the responsibility of the board of directors of
Delta. This announcement is a condensed version of the full announcement in respect of
the audited condensed annual results for the period ended 28 February 2026 and does not
contain full or complete details of those results.
Any investment decisions by shareholders and investors should be based on
consideration of the FY26 AFS. Shareholders are encouraged to review the FY26 AFS,
which are available on the JSE cloudlink at
https://senspdf.jse.co.za/documents/2026/jse/isse/DLT/FY26AFS.pdf and on the Group's
website https://www.deltafund.co.za/financial-results/.
This announcement has not been audited or reviewed by the Group's external auditors.
RESULTS PRESENTATION
Delta management will host a presentation on the FY26 annual results via webcast
on Tuesday, 2 June 2026, starting at 10:00 (South African time). A virtual question-
and-answer session will follow the presentation. The webcast can be accessed via
the following link: https:// https://www.corpcam.com/DPF02062026
The annual results presentation will be made available for download from the Company's
website at: https://www.deltafund.co.za/financials/
A recording of the webcast and Q&A session will be available for download within 24
hours after the presentation from the Company's website at:
https://www.deltafund.co.za/financials.
By order of the Board
M Makwana S Masinga
(Chairman) (CEO)
29 May 2026
Date of release: 29 May 2026
Chairman: *Mpho Makwana
Directors: *Sindi Zilwa, *Solly Mboweni, *Thomas Tshepo Matlala, *Eugene Zungu, *Leonard
Brett Van Niekerk
CEO: Sibongile Masinga; CFO: Zwelifikile Mhlontlo
Company Secretary: Vasta Mhlongo
*Independent non-executive director
Registered office:
Silver Stream Office Park, 10 Muswell Road South, Bryanston, (PostNet Suite 210, Private
Bag X21, Bryanston, 2021)
Transfer secretaries: Computershare Investor Services Proprietary Limited
Sponsor: Java Capital
Date: 29-05-2026 01:45:00
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