Vukile Property Fund has raised about R2.8bn through the issue of new shares, which will be used to fund the acquisition of three shopping centres in Italy.
The group said on Wednesday there was strong institutional demand for the equity raise and it issued about 123-million new shares, representing 9% of the company’s market capitalisation.
The shares were placed at R22.60 per share, representing a 4.32% and 4.43% discount to the pre-launch Vukile closing share price and 10-day volume-weighted average price on May 19, respectively.
The shares will be listed on the JSE on May 25.
When announcing the capital raise on Tuesday, Vukile said it has a demonstrable track record of identifying mispriced assets, capitalising on opportunities and building thriving businesses, and remains encouraged by the pipeline it has identified locally and internationally.
The proceeds will be used to fund the company’s initial transaction in Italy — the acquisition of three shopping centres with a gross asset value of €115m (R2.2bn), which it is in the final stages of closing.
The acquisition will serve as the platform for Vukile’s future expansion into the Italian market.
“Vukile’s entry into Italy is with an experienced local partner and has a clear accretive entry yield well above the cost of capital and with a visible acquisition pipeline,” it said.
In addition, the balance of the proceeds will provide Vukile with the optionality and financial flexibility required to continually evaluate compelling value-enhancing opportunities when they arise, and fund a further pipeline in the near term, it said.
Investec Bank and Merrill Lynch International acted as joint bookrunners.
On Tuesday the group confirmed its guidance of growth in funds from operations (FFO) and dividend per share at 9.3% for the year ended March.
For 2027, the group expects to deliver growth in FFO per share of between 8% and 10%. In addition, it intends to increase its dividend payout ratio from the current level of 83%-85%, which would deliver growth in dividend per share for the year to end-March 2027 of between 10% and 12%.
“This growth is underpinned by strong operational performance across all geographies supported by completed and near-completed accretive transactions,” it said.
It also said that post-year-end its Spanish subsidiary, Castellana Properties, received proposed revised tax assessment notices from the Spanish tax authority. The assessments propose additional taxes and interest of about €8m (R155m), primarily relating to the application of the 19% special levy on the 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 and will oppose the proposed taxes.
Vukile successfully deployed the R2.65bn equity capital raised in October 2025, together with proceeds from the sale of Castellana’s retail park portfolio of about €280m (R5.4bn) 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, it said.
In South Africa, the acquisition of 50% of Chatsworth Centre was completed in December 2025 and agreements have been signed for the acquisition of Botshabelo Shopping Centre for R432.5m. The transaction is with the Competition Commission and expected to close in early July.
The group has been exploring the Italian property market for some time and through the acquisition of a 35% stake in Pradera in December 2025, it has been able to access an expert management team with deep Italian market experience and knowledge, it said.
“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,” it added.
“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,” it said.
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