Property

South African shopping mall giant pushing hard in two European countries

Luke Fraser

 ·26 Nov 2025

Vukile Property Fund is one of South Africa’s largest retail property owners, but most of its assets are actually found offshore in Spain and Portugal. 

Vukile Property Fund holds a total of R54 billion in property assets, and owns 30 retail assets in South Africa, including East Rand Mall, Pan Africa Shopping Centre and the recently acquired Mall of Mthatha. 

However, a significant portion of its assets are found in Spain and Portugal through its 99.6%-held subsidiary, Castellana Properties.

Speaking to the media following the group’s interim results, Vukile CEO Laurence Rapp said that Spain and Portugal continue to be the growth engines of the European economies. 

Spain, for instance, is expected to grow 2.9% in 2025, with the economy being driven by strong household consumption, a resilient labour market, and a 20-year low in unemployment. 

Portugal is also expected to grow by up to 2.4% in 2025, driven by rising private consumption and record-high employment levels, with wages projected to increase. 

Tourism is set for a record year, boosting demand in key regions such as Lisbon and Madeira.

“The Iberian portfolio continued to perform in a league of its own, delivering outstanding operating metrics,” said Rapp. 

“Our newly acquired Portuguese assets have been successfully integrated, with value-add projects identified set to drive further momentum.” 

Castellana’s EUR 1.8 billion portfolio is effectively fully let, with marginal vacancies of 1.3% and more than 95% of the space let to blue-chip international and national tenants.  

Castellana achieved positive rental aversions and new lets of 7.5% (9.55% in Portugal, 7.12% in Spain), well ahead of growth in both countries. 

Rapp said that the group is also looking at new markets across Western Europe to grow its footprint.

South African performance

Although Portugal and Spain are Vukile’s largest markets, Rapp said that its South African portfolio operates in a “sweet spot”, focusing on rural and township retail. 

Rapp said that retailers, especially clothing retailers, are seeing a stronger performance, which has led Vukile to increase rates. 

South Africa saw like-for-like net operating income (NOI) growth of 10%, which was higher than 8.7% in Iberia. 

The South African portfolio continues to deliver consistent outperformance, benefiting from driving operational efficiencies and an improved macroeconomic performance. 

“Strong top-line growth is supported by proactive cost management and sustainability initiatives, encompassing both electricity and water, that operate as a growing profit centre for Vukile,” said Rapp. 

“Structural changes, particularly around electricity supply, are most certainly making the operating environment better than it’s been in a long time, and this is starting to bear fruit.”

The retail portfolio value increased by 5.9% to R17.7 billion, with vacancies at an exceptionally low 1.8%. 

The total portfolio recorded a 5.4% growth in trading density, with the township and rural portfolios outperforming at 5.9%. 

The group added that the redevelopment of the Mall of Mthatha added significant value to the South African portfolio. 

Following its acquisition in May 2024, the mall’s turnaround has delivered measurable gains, with asset value increasing by nearly 40%.

The South African portfolio’s cost-to-income ratio rose from 15.3% to a record low of 12.5%, which reflected the benefit of additional solar PV installations and targeted efficiencies.

Financials

With the group recording strong performances during the period, its revenue increased by 37% to R2.9 billion following the acquisition of five new centres in Iberia. 

Basic earnings per share also rose by 73.0% to 190.02 cents per share. However, with the group increasing its number of shares, headline earnings per share dropped by 2.5% to 85.24 cents. 

Nevertheless, the group still increased its interim dividend per share to 9 cents per share.