Move to retail property pays off for Vukile

Cape Town – Vukile Property Fund’s [JSE:VKE] strategy to shift its portfolio to favour retail property seems to be paying dividends, as its SA assets grew by R9.1bn in the past three years.

“We are still confident retail property will outperform other commercial property subsectors over the long term, even though times are tough for the South African consumer right now,” CEO of Vukile Property Fund Laurence Rapp said in a statement on Monday.

The fund has identified shopping centres which serve lower-income consumer markets as particularly valuable, according to Rapp.

Retail trade sales increased by 3.5% year-on-year for June 2015, according to Statistics SA.

Retail properties currently account for over R10.5bn or 70% of the fund’s portfolio, in contrast to three years ago when shopping centres made up 54% of its portfolio.

Vukile has more than doubled the value of its directly-held South African real estate assets over the past three years, from R6.1bn to R15.2bn currently, the JSE-listed property company said.

Vukile's share price gave up 1.21% to R17.98, mostly in line with the performance of its peers.

Vukile said its growth objectives also include improving the quality of its properties.

According to Rapp, the buildings in Vukile’s portfolio “now have higher average values, carry lower risk and many include future growth potential with development, expansion and upgrade opportunities”.