Dipula Properties remains upbeat about its prospects, buoyed by an early recovery in the real estate sector, as the property group lifted distributable earnings by 5% in the year to end-August.
The group said the SA real estate sector had shown meaningful improvement in recent months with further gains expected. It said the recovery could accelerate if the persistent inefficiencies at local government level, which continue to pose material risks and structural constraints to growth, were addressed.
“We remain optimistic about SA and the property sector’s outlook while being realistic about the challenges we face. Dipula will continue focusing on growing our presence in defensive retail and industrial assets through strategic capital allocation, disciplined operations and active hands-on management,” the group said.
Headline earnings per share came in at 53.08c. Total profit and income attributable to equity holders reached R931.9m while revenue grew to R1.51bn. Net profit before finance costs stood at R1.3bn. Full-year distributable earnings per share rose by 5% to 57.26c.
The group expects distributable earnings to grow 7% in the 2026 financial year, driven by a modest but positive weighted average renewal rental rate of 0.6% across its portfolio. During the period, new and renewed leases worth R801m were concluded, locking in sustainable income streams.
The Reit, which owns rural and township retail centres, disposed noncore properties worth R200m during the year, increasing its capital recycling activity compared with the previous period. Proceeds were used to reduce debt and fund initiatives to enhance asset value, including quality-improving acquisitions and sustainability projects, it said.
“Discussions are advanced on the sale of our residential units, which make up 4% of income and saw vacancies fall from 12% to 6%. This will allow us to focus capital on our core retail and industrial assets,” the group said.
Vacancies rose to 8.5% during the year, up from 7.5%, largely driven by short-term shifts in highly lettable office and industrial properties, it said.
The total cost-to-income ratio rose slightly to 43.2%, reflecting inflation-driven property expenses, while gearing fell to 34.9% with an interest cover ratio of 2.8 times at year-end, while post year-end gearing dropped further to 29%. Its net asset value rose 7.5% driven by higher income prospects.
Dipula invested R214m in refurbishments and redevelopments to drive income growth with a further R170m planned for 2026 to enhance core assets.
The group also completed five strategic acquisitions in August totalling R700m, including the R480m Protea Gardens Mall in Soweto. These moves strengthen its footprint in top markets while supporting accessible, everyday retail for communities, it said.
“We continue to focus on high-quality logistics and industrial assets, securing a 16,000m² distribution centre in Klerksdorp leased to Bayer, and Airborne Industrial Park near OR Tambo International Airport, fully let at 6,964m²,” the group said.
The acquisitions are being partly funded by Dipula’s oversubscribed R550m equity raise in September. The group intends to concentrate its capital allocation strategy on high-quality mid-sized logistics and industrial assets, a core part of its growth plan, as it seeks to expand its footprint in these sectors.
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