Fairvest Limited's latest results, announced for the year ended 30 September 2025, underscore its disciplined execution of a clear strategy supported by a strong operating platform, delivering distributions ahead of guidance and reinforcing its capacity for sustained, future-focused growth across its evolving retail-focused property portfolio.
Source: Supplied. Nquthu Shopping Centre.
It reported an annual distribution of 142.57 cents per A share and 48.15 cents per B share, surpassing market guidance.
Chief executive officer Darren Wilder confirms that Fairvest has delivered another year of excellent progress, reducing vacancies to 4.1% from 4.3%, and achieving like-for-like net property income growth of 5.8%.
Positive rental reversions improved from 3.6% to 4.8%, supported by strong letting activity, with 537 new deals and 504 renewals concluded during the year and an overall tenant retention rate of 83%. Average gross rent increased by 5.2% to R134.18 per square metre.
The weighted-average lease escalation across the portfolio held steady at 6.7%, while the weighted-average lease term extended to 30.1 months. The Group continued to invest in its property portfolio during the reporting period, with total capital expenditure of R288.9m, including R33.8m for further solar initiatives.
Property expenses were exceptionally well-managed, with growth limited to 2.6%, despite being primarily driven by above-inflation municipal cost increases. Fairvest received a dividend of R123.3m for the year from its 23.6% stake in Dipula Properties Limited.
Portfolio adjustments reflect the strategic vision
Fairvest acquired seven retail properties during the year, valued at R1.15bn: Thembalethu Square, Shoprite Manguzi, Ulundi Shopping Centre, and Nquthu Shopping Centre have transferred, while Eyethu Junction, Jozini Mall, and Tugela Ferry Mall are expected to transfer in the new financial year. Three disposals of industrial and office assets valued at R99m were also concluded.
Two have transferred and one is expected to transfer in January 2026. These transactions are well aligned with Fairvest’s strategy to create a retail-only fund focused on non-metropolitan retail assets situated near commuter nodes and transport interchanges, with strong national anchors that cater to previously underserviced markets throughout South Africa.
It aims to achieve this by improving the quality of and recycling non-core assets. Retail assets already represent close to 71% of Fairvest’s revenue and value, with offices and industrial assets comprising the remainder.
Investment in township fibre infrastructure sets a new standard
Fairvest is the market leader in the REIT sector in integrating digital infrastructure assets with traditional retail property assets. The company has invested R477m in a subsidiary, Onepath Investments, which acquires de-risked fibre infrastructure in townships.
This infrastructure is leased to a fibre network operator to supply high-quality internet to township homes and communities. Digital inclusion for underserviced communities opens up opportunities in education, employment, entrepreneurship, and entertainment, helping these communities thrive.
This not only strengthens Fairvest’s core retail market but also gives the company access to data, insights, and new retail opportunities within its existing portfolio. The rental income also provides an attractive, accretive dividend yield for Fairvest, exceeding 12% of invested capital.
Significantly improved debt metrics
At year-end, the Group had loans amounting to R3.9bn, with an average maturity of 2.5 years. After deducting cash and cash equivalents, the loan-to-value (LTV) ratio was 25.6%, down from 33.3% last year.
This LTV ratio remains comfortably below the Group and portfolio LTV covenant limit of 50% for its facilities, with an interest cover ratio of 3.1 times, which is significantly above the 2 times coverage required by its funders.
The weighted average interest rate for the year declined to 9.05%. As of September 2025, Fairvest had approximately R1.3bn in cash and available undrawn debt facilities for growth initiatives. The Group has interest-rate swaps of R3.7bn, with 93.6% of its debt hedged. These swaps have a weighted average maturity of 1.1 years.
Environmental, Social and Governance projects advancing at pace
The Group has made significant progress in its integrated backup power strategy to ensure business continuity during adverse conditions. Currently, approximately 47% of the portfolio GLA has access to either partial or complete backup power.
A further R33.8m was invested in renewable energy this year, with 52 solar plants now fully operational, and a total installed capacity of 23.3MWp. These plants generated clean, renewable energy valued at R60.3m, meeting about 14.3% of the combined portfolio’s electricity needs during the period.
An additional 10 plants with a capacity of 2.7 MWp are at various stages of feasibility assessment, approval, and implementation. Ten fuel saver systems have been installed, integrating solar plants with generators to reduce diesel consumption and increase renewable energy use during power outages.
A series of water-management and conservation projects is underway, including 24 operational groundwater harvesting plants and the strategic deployment of smart monitoring devices across 36 properties to facilitate early leak detection.
A positive outlook with increased guidance
The Group starts 2026 strong, supported by solid performance and strategy execution. Portfolio fundamentals are stable with low vacancies, better tenant quality, and strong like-for-like net property income growth across sectors.
Improvements in the national electricity grid, easing inflation, and moderating interest rates have boosted operating conditions. However, ongoing municipal-service issues and the broader macroeconomic environment remain risks.
The portfolio remains resilient and positioned for growth. We continue to transition towards retail, with a commitment to entering acquisitions and disposals only at the right price.
Distributable earnings per B share are expected to rise by 9%-11% in 2026, with A share dividends growing by the lesser of 5% or CPI, in line with the Memorandum of Incorporation. The Board will keep the dividend payout ratio at 100%, subject to bi-annual review.
