(Bloomberg) -- Vukile Property Fund Ltd., a South African real estate investment trust, raised its guidance for 2024 paced by a booming Spanish business that helped counter a deteriorating outlook at home.
The company’s funds-from-operations rose 11% in the six months through September, it said in a filing on Wednesday. Its properties in Spain had “negligible” vacancies, compared with 4.5% in South Africa, Vukile said.
Companies in Africa’s most-industrialized economy are reeling from inefficiencies at the state-run logistics firm and power utility. Electricity outages have prompted business to find ways to cut costs while spending more on running generators. Businesses also have to deal with borrowing costs that are at a 14-year high.
“This is getting to an ideal time in the property cycle to buy,” Chief Executive Officer Laurence Rapp said at a briefing in Johannesburg. “The frustration at the moment is that at the time when one should be buying there is limited access to capital. And when you can get it, it’s very expensive.”
Vukile’s shares jumped as much as 5.6% in Johannesburg before paring gains.
Spain’s economy has been among Europe’s top performers since the global pandemic, buoyed by a strong rebound in tourism that’s been aided by unseasonably warm weather.
Given that little new capacity is coming to the market in Spain “where are the tenants gonna trade from? If not from my mall,” Rapp said.
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