Wrap Text
Confirmation of guidance, FY27 outlook and strategic update
VUKILE PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2002/027194/06)
JSE share code: VKE NSX share code: VKN
Bond company code: VKEI
(Granted REIT status with the JSE)
("Vukile" or the "Company")
CONFIRMATION OF GUIDANCE, FY27 OUTLOOK AND STRATEGIC UPDATE
Vukile shareholders are referred to the H2 FY2026 pre-close presentation ("Pre-Close") and webcast made available on
the Company's website on 31 March 2026.
CONFIRMATION OF GUIDANCE FOR FY26
In line with the disclosure at Pre-Close, Vukile expects the growth in FFO and dividend per share to be 9.3% for the full
year ended 31 March 2026.
GUIDANCE FOR FY27
Further to the above, Vukile forecasts to deliver growth in FFO per share of between 8% to 10% for the year ending 31
March 2027. In addition, we intend to increase our dividend payout-ratio from the current level of 83% to 85%, which
would deliver growth in dividend per share for the year ending 31 March 2027 of between 10% to 12%. This growth is
underpinned by strong operational performance across all geographies supported by completed and near-completed
accretive transactions.
The forecast assumes no material changes in exchange rates and interest rates. A forecast ZAR/EUR rate of R19.60/Euro
was used in this forecast. The forecast assumes no material adverse change in trading conditions, contractual escalations
and market-related renewals. The forecast has not been reviewed or audited by the Company's external auditors and is the
responsibility of Vukile's directors.
TAX DISPUTE WITH THE SPANISH TAX AUTHORITIES
Post year end, Castellana Properties SOCIMI, S.A. ("Castellana"), the Group's Spanish subsidiary, received proposed
revised tax assessment notices from the Spanish Tax Authority relating to the application of the SOCIMI special levy and
associated withholding tax for the 2021–2023 financial years. The assessments propose additional taxes and interest of
approximately €8million, primarily relating to the application of the 19% special levy on that portion of Castellana
dividends attributable to shareholders of Vukile holding less than a 5% interest in Vukile.
Castellana has obtained two independent external legal opinions from Spanish tax advisers, both of whom concluded that
the proposed revised assessments are inconsistent with the wording of the SOCIMI Law, as confirmed by several binding
tax rulings issued by the Spanish Tax Administration and that Castellana has very strong prospects of successfully opposing
them. The tax authority has further acknowledged that Castellana's treatment was based on existing tax rulings and
constituted a reasonable interpretation of the law. Based on the legal opinions obtained and the board's reliance on explicit
historical binding tax rulings, the Castellana board considers the likelihood of additional taxes becoming payable to be
remote. Appropriate disclosure of the aforementioned facts will be disclosed in the annual financial statements due to be
released on 17 June 2026. Castellana intends to formally challenge the assessments through the appropriate administrative
and judicial processes.
USE OF FUNDS, TRANSACTION PIPELINE AND ENTRY INTO ITALY
Vukile has successfully deployed the R2.65 billion equity capital raised in October 2025, together with proceeds from the
sale of Castellana's retail park portfolio of c.EUR280 million which was received in early April 2026. The accretive
transactions of Berceo, Islazul and Splau shopping centres have all been completed on time and according to plan.
Similarly, in South Africa, the acquisition of 50% of Chatsworth was completed in December 2025 and agreements have
been signed for the acquisition of Botshabelo Shopping Centre for R432.5 million. The transaction is currently with the
Competition Commission and expected to close in early July 2026.
Vukile has for some time been exploring the Italian property market and through the acquisition of our 35% stake in Pradera
Limited in December 2025, we have now been able to access an expert management team with deep Italian market
experience and knowledge. Our access to this specialist on-the-ground team, has been the catalyst for our entry into Italy
and we have built-up an active pipeline of potential accretive transactions.
Italy is characterised by a stable macroeconomic environment, improving sovereign credit metrics, resilient employment
levels and moderating inflation.
Italy represents a large and established European retail market with significant scale, institutional ownership and increasing
interest from international investors. Structural demand dynamics include relatively low household leverage, resilient
consumer spending, and lower e-commerce penetration, supporting the continued relevance of physical retail, particularly
in major urban centres. The supply-demand dynamics are very positive for owners of existing assets with extremely limited
new supply expected to come to the market.
Operating fundamentals indicate stable occupancy, tenant performance above pre-pandemic levels, opportunities for active
asset management and repositioning, and the potential for income growth.
Vukile is in the final stages of closing an acquisition of three of shopping centres in Italy with a gross asset value of EUR115
million at an expected yield of c.10%, which will serve as the platform for our future expansion into the Italian market. The
impact of this transaction has been taken into account in the FY27 guidance.
Vukile's entry into Italy is with an experienced local partner, has a clear accretive entry yield well above the cost of capital
and with a visible acquisition pipeline.
The proceeds of the equity raise (refer to the Opening of Accelerated Bookbuild announcement) will be used to fund both
the initial transaction in Italy and potential further pipeline.
19 May 2026
Transaction sponsor NSX sponsor
Investec Bank Limited IJG Securities (Pty) Ltd
Forward looking statements:
This announcement contains forward-looking statements that relate to the Company's future operations and performance.
Such statements have not been reviewed or reported on by the Company's external auditors and are not intended to
be interpreted as guarantees of future performance, achievements, financial or other results. They rely on future
circumstances, some of which are beyond management's control, and the outcomes implied by these statements could
potentially be materially different from future results. No assurance can be given that forward-looking statements will be
accurate; thus, undue reliance should not be placed on such statements.
Date: 19-05-2026 05:15:00
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