Burstone’s SA portfolio continues to perform, with a strong leasing performance lifting retail and office metrics, while remaining central to supporting the group’s capital needs as it scales internationally.
The group reported a 5.3% rise in like-for-like net operating income in SA for the six months ended September, underpinned by strong retail growth and a firmer office market, though performance in the industrial segment was tempered by a tenant-specific default.
“Our SA portfolio continues to show improving property fundamentals, delivering strong operational performance across a diversified asset base. It remains a key creator of balance-sheet liquidity and provides the capacity we need to support both local and international platform growth,” the group said.
In SA the retail portfolio led the way, with net operating income up 11.5%, supported by stronger trading and Zevenwacht Mall’s partial redevelopment.
Office income rose 4.1% on lower negative reversions and better tenant retention, while industrial fell 3.8% but was driven by ongoing leasing. Overall, vacancies improved to 4.7% from 6.7%.
The group’s overall distributable income per share rose 3% to 51.07c.
Burstone’s European performance was anchored by its Pan European Logistics platform with Blackstone, where the group’s 20% stake and retained management mandate position it to capture long-term earnings. The portfolio reported steady returns, driven by rental reversions of 16.3%, though vacancies rose to 14.8% as management focused on maximising rental growth over short-term occupancy.
In Australia, Burstone has co-invested R330m through its Irongate partnership into two industrial platforms alongside TPG Angelo Gordon and Phoenix Property Investors, with a combined gross asset value of about A$400m (R4.5bn)
“While the assets were acquired at low initial yields, they offer strong reversionary potential, returning R14m to the group in the period, compared with nil a year earlier as asset management initiatives took hold. The group also retains an 18.7% stake in the ITAP Fund Australia, with medium-term returns expected to follow,” it said.
Burstone’s Australian fund platform, Irongate, where it holds a 50% stake, remains a key driver of fee income, with third-party equity under management rising 7% to A$668m and an additional A$170m in committed growth capital.
It is also expanding its European industrial footprint and preparing to launch its SA funds platform, pending final approvals.
“The group continues to execute its strategy, transitioning from a traditional property owner to an integrated international real estate funds and asset management business. Our performance over the past year reaffirms Burstone’s progress in achieving operational stability and scaling our funds and asset management operations across all regions,” the group said.
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