Cape Town, 28 February 2025 – Spear REIT Limited (JSE:SEA), the Western Cape-focused real estate investment trust has provided an operational and financial update in its FY2025 pre-close presentation for the period ending 28 February 2025. Spear REIT’s FY2025 stands out in the sector due to its strategic focus and consistent robust financial metrics. The company reported a 13.58% year-on-year increase in portfolio value, reaching R5.26 billion assets under ownership, and maintained a high occupancy rate of 96.02% with a further 100bps increase in occupancies since HY2025. The company remains on track to deliver on its objectives and forecast, reporting impressive performance metrics and continued portfolio growth.
Highlights
- Portfolio value: 26 billion, reflecting a 13.58% increase year-on-year
- Market capitalisation increase of 5 billion to R 3.3 billion
- Loan-to-value (LTV) ratio: 97%
- Interest coverage ratio (ICR): 34 times
- Fixed debt ratio: 18%, with an average debt expiry of 24 months
- Proposed final payout ratio: 95%
- Portfolio occupancy rate: 02%
At the pre-close presentation, Spear’s CEO, Quintin Rossi, noted: “FY2025 has been a transformative year for us, driven by the success of the new Western Cape portfolio acquisition. Thanks to our regional operating strategy, the portfolio has been successfully stabilised into the core portfolio ahead of schedule and under budget. Our commitment to the Western Cape real estate market has resulted in sustained portfolio growth, high occupancy levels, and strong cash collections.”
Portfolio and operational performance
- Occupancy:02%, supported by a strong tenant retention strategy
- Portfolio in-force escalations:34%
- Renewals and new lets: 86,359m² concluded versus 84,620m² expiring
- Cash collections:78% year-to-date
- Rental reversions: Portfolio-wide positive reversion of 52%
CFO Christiaan Barnard added: “Active capital recycling and disciplined financial management have bolstered our balance sheet, ensuring a resilient and sustainable capital structure. Our lower cost of debt and risk mitigation strategies continue to support our financial stability which has been a positive contributor to overall performance during the year.”
Spear has successfully implemented a R1.15 billion portfolio acquisition, significantly enhancing its asset base and bolstering its market presence with this accretive 93 500m2 diversified portfolio acquisition. “With an entrepreneurial management team that remains laser-focused on active asset and portfolio management, the Spear investment team is looking ahead towards the new financial year with approximately R1 billion in new acquisition opportunities currently under review, positioning the company for continued and sustained growth”, announced Rossi
Spear’s organic development pipeline is set to add future value to the core portfolio, with strategic projects aimed at expanding its industrial and mixed-use asset base. The GTX Park in George, a 30,000m² industrial development, is progressing with a total capital investment over 5 years of R400 million. Bravo Park in Blackheath is set to expand to Phase 2 by 7,000m², with an R82 million capital investment. Meanwhile, the Marine Drive mixed-use development in Paarden Eiland, anticipated to commence the rollout in phases, will require a total capital investment of R1.5 billion over five years.
Sustainability remains a core focus, with over 60% of the portfolio now equipped with solar PV infrastructure. Ten new solar PV systems are scheduled for installation, following the acquisition of the new portfolio. Furthermore, Spear is exploring wheeling projects within the City of Cape Town to enhance energy security and resilience across its portfolio.
Outlook for FY2025
Looking ahead, Spear remains focused on growth, value creation, and sustainable operations. Management reaffirmed its full year guidance of distribution per share (DIPS) growth of between 2% and4% for FY2025 while maintaining a 95% payout ratio.
Rossi concluded: “With strong leasing momentum, solid regional real estate fundamentals, an enhanced portfolio, and our disciplined financial approach, we are confident in our ability to navigate evolving market dynamics and deliver sustained value to our stakeholders in line with our mission statement.”
Spear will release its results for the full year FY2025 on 22nd May 2025.
