Latest news with #QuintinRossi
IOL News
26-05-2025
- Business
- IOL News
Spear REIT expands Western Cape portfolio as distributions grow and forecast brightens
Spear REIT's Northgate Park office building in Cape Town. The Western Cape focused group has seen strong demand and lower vacancies for its office portfolio in its 2025 financial year, driven by declining availability and high development costs in the Cape Metropolitan area. Image: Supplied In a remarkable year for Spear Reit, the Western Cape property investment group expanded its portfolio significantly while reporting a solid increase in distribution per share (DIPS). With a rise of 3.06% to 81.27 cents for the 2025 financial year, expectations for the forthcoming years remain optimistic, as CEO Quintin Rossi anticipates further DIPS growth of between 4% and 6% for the 2026 financial year. Describing the past year as transformative, Rossi, in an interview on Thursday. highlighted the acquisition of 13 commercial properties from the Emira Property Fund as a key milestone. This expansion, coupled with a R130 million share issue for a fully let 30 000 square metre agriculture and wine logistics facility in Paarl announced this week, signifies a firm commitment to a growth strategy that is expected to bear fruit in the years ahead, he said. 'The R1.15 billion transaction positions Spear firmly on a growth trajectory,' said Rossi in an interview Thursday. The diversified portfolio encompasses industrial, medical, life science-focused retail, and commercial assets in the Cape Metropolitan area. Despite the challenges posed by South Africa's macroeconomic landscape, including fluctuating inflation rates and intermittently disruptive loadshedding, Spear's core portfolio thrived. Distributable income soared by 25.5% to R252m, while revenue climbed 12.10% to R681.70m—a testament to Spear's tenacity in an uncertain environment. 'Our focus on operational imperatives yielded tangible results,' Rossi asserted, noting a steady increase in leasing momentum and a 97% occupancy rate at the end of the reporting period. 'The Cape Metropole's office space has seen tenant demand surpassing supply, a clear indicator of a robust market.' With a rental collection rate steady at 98.59%, the board approved a final six-month payout ratio of 95%, ensuring sustained income distribution to shareholders amidst economic volatility. 'While we navigate challenges such as crime and high unemployment, we see promising signs of recovery within the South African-listed property sector,' Rossi explained, adding that the declining interest rate environment has contributed to the sector's recent successes. The Western Cape, said Rossi, had seen its property metrics diverge from national trends, aided by extensive infrastructure investments—R120 bn over 10 years—which are fostering economic growth and job creation within the province. This local focus has proven advantageous as Spear's industrial portfolio occupancy stands at 98.85%, driven by prime locations and diverse offerings that make it resilient in fluctuating markets. 'The industrial segment accounts for 63% of our total lettable area and continues to show sustainable cash flow as we observe an in-force escalation of 7.3%,' he said. Spear's retail assets also delivered above-expectation results, with a strong occupancy rate of 96.05%. Rossi said they were pursuing new retail opportunities, ensuring that Spear remains well-positioned for the future, focusing on convenience and destination retail spaces that cater to a wide income spectrum. Additionally, two medical retail properties added to the core portfolio were backed by long-term lease agreements with recognised entities like Intercare and Clicks Group. Rossi was particularly optimistic about the commercial portfolio, which is poised for rental growth due to constrained supply in high-quality office spaces across the Cape Metropolitan area. 'The occupancy rate has improved to 92.99% from 84.37% in the last financial year, reflecting the strong demand,' he remarked. As Spear Reit continues to navigate the complexities of the property market, its focus on the Western Cape and a diverse portfolio positions it competitively for sustained growth and resilience. Visit:
Yahoo
23-05-2025
- Business
- Yahoo
Spear REIT Ltd (JSE:SEA) Full Year 2025 Earnings Call Highlights: Strong Revenue Growth and ...
Revenue Growth: 12.1% increase in top-line revenue; like-for-like growth of 11.19%. Distributable Income Per Share: Increased by 3.08% to 81.27 cents per share. Distribution Per Share: Grew by 3.06% with a 95% payout ratio. Net Property Operating Profit: Grew by 10.45%; like-for-like basis grew by 6.42%. Interest Coverage Ratio (ICR): 3.34 times, improved from the prior year. Loan-to-Value (LTV) Ratio: 27.09%, well below the target range of 38-43%. Occupancy Rate: High at 97% across the portfolio. Portfolio Value: Increased to 5.5 billion rand, with a 20% growth for FY25. Asset Acquisition: 13 assets acquired from Amira Property Fund valued at 1.15 billion rand. Free Cash Flow: 74 million rand generated from operations. Solar PV Revenue: 4% of total revenue, generating 28 million rand. Debt Refinancing: 484 million rand refinanced, reducing average margin from 1.7% to 1.55%. Average Rental Reversion: Positive at 4.18% across the portfolio. Weighted Average Escalation Rate: 7.27%. Tenant Retention Rate: 61% for the year. Development Pipeline: 140,000 square meters of available bulk for future development. Warning! GuruFocus has detected 11 Warning Signs with JSE:SEA. Release Date: May 22, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Spear REIT Ltd (JSE:SEA) has grown its portfolio to a 5.5 billion rand Western Cape-only portfolio, showcasing strong property fundamentals. The company reported a 3.08% growth in distributable income per share for FY25, indicating positive financial performance. Spear REIT Ltd maintains a high occupancy rate of 97%, reflecting strong demand for its properties. The company has a robust solar strategy, with plans to increase its PV solar portfolio by another 10 assets, enhancing sustainability. Spear REIT Ltd has a strong balance sheet with a low loan-to-value ratio of 27%, providing room for growth and acquisitions. The operating environment remains challenging, with the Western Cape still exposed to broader South African macroeconomic conditions. There is a slight dilution in tangible net asset value due to a capital raise, which may concern some investors. The company faces high costs associated with pre-implementation for acquisitions, slightly elevating total cost of income. Spear REIT Ltd's office sector experienced negative rent reversions, impacting income assumptions for FY26. The company is not included in any indices, which may limit its visibility and liquidity in the market. Q: With the current asset value of 12 rand, how much could be added to the asset value if the bulk is valued less conservatively? A: Quintin Rossi, CEO: The bulk, which is about 140,000 square meters, could add roughly 400 million rand to the asset value, which is not currently reflected on the balance sheet. Q: Given the scarcity of land in the Western Cape, should Spear REIT consider holding more land for long-term potential? A: Quintin Rossi, CEO: While holding land can offer long-term potential, it is dilutive for an income fund like Spear. We focus on acquiring income-producing assets and unlocking bulk strategically without taking on development risk. Q: Are there plans to refurbish or convert B-grade offices to capture demand in the A-grade office space? A: Quintin Rossi, CEO: We have about 8,000 square meters of office vacancy, with 2,000 earmarked for refurbishment. The rest of our office properties are of high quality and do not require redevelopment to attract tenants. Q: What is the expected funding mix for future acquisitions? A: Christiaan Barnard, CFO: The funding mix is fluid and depends on each transaction. We start with a 40-45% debt level and adjust based on available cash, shareholder support, and transaction specifics. Q: Will Spear REIT consider investing in areas like Knysna and George, and is there any interest in hospitality assets? A: Quintin Rossi, CEO: We are already developing in George and see the entire Western Cape as an investment opportunity. However, we are not interested in hospitality assets, focusing instead on commercial, industrial, retail, mixed-use, and data center opportunities. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
