At a Glance
- Safari boosts portfolio to $240 million, supported by national tenants and resilient rental demand.
- Operating profit dips 12.6%, but vacancy rate stays low at just 2.06%.
- Loan-to-value ratio improves, reinforcing balance sheet strength amid high interest rates.
Safari Investments, property investment company listed on the Johannesburg Stock Exchange (JSE), has lifted the value of its property portfolio above $240 million in the year to June 2025, buoyed by higher valuations, resilient rental income, and strong demand from national tenants, even as South African real estate firms navigate sluggish consumer spending and tighter financing conditions.
According to its recent results, the company’s portfolio valuation rose 3.74 percent from R4.04 billion ($233.14 million) to R4.19 billion ($241.75 million), even after excluding the Platz Am Meer property following the disposal of Safari Investments Namibia Pty Ltd.
The South African real estate investment trust, however, posted a 12.63 percent decline in operating profit, dropping for the 12 months to June 30 to R333.48 million ($19.24 million), compared to R381.7 million ($22.03 million) in the prior year.
Safari’s performance was anchored by a low vacancy rate of 2.06 percent, with national tenants occupying 91 percent of its gross lettable area.
The REIT posted rental reversions of 10.8 percent and highlighted a healthy lease expiry profile, pointing to stable cash flows ahead. Annual profit climbed 37.9 percent to R554.9 million ($32.02 million) from R402.4 million ($23.18 million).
Balance sheet strength
Safari’s loan-to-value ratio improved to 31.5 percent from 33 percent a year earlier, easing pressure from debt costs as interest rates remain elevated.
Net asset value per share climbed to R11.47 ($0.662), up from R10.06 ($0.58) in 2024, reflecting stronger property valuations.
Earnings per share rose to R2.17 ($0.125) from R1.57 ($0.091) in the prior cycle, while headline earnings per share eased slightly to R0.74 ($0.043) from R0.77 ($0.044).
The board declared a final cash dividend of R0.4 ($0.023)per share, bringing the total payout for the year to R0.74 ($0.043) per share. The REIT maintained its 100 percent distribution policy, with the final dividend set for payment on Oct. 13.
Sector context
Safari’s steady showing comes as larger rivals such as Growthpoint Properties, Hyprop Investments, and Resilient REIT face uneven demand across their shopping center portfolios.
While foot traffic has recovered from pandemic lows, consumer spending remains under strain from inflation and high borrowing costs.
Retail-focused landlords have leaned on rental reversions and lease renewals to preserve income, while keeping vacancies low through relationships with national and multinational tenants.
Safari’s exposure to township and peri-urban malls, anchored by grocery and value retailers, has helped shield it from the sharper headwinds felt in higher-end retail segments.
Safari grows assets, retained income as REITs stay cautious
South Africa’s REIT sector continues to tread cautiously, balancing shareholder distributions with balance sheet strength.
Total assets expanded by 11.44 percent from R4.11 billion ($237.02 million) to R4.58 billion ($264.39 million), while retained income rose from R986.22 million ($56.92 million) to R1.41 billion ($81.42 million)
Investor appetite remains concentrated on firms that can sustain dividends while maintaining low vacancies in non-discretionary retail hubs.
Safari’s integrated annual report was published on Friday, with shareholders set to convene electronically for the company’s annual general meeting on Nov. 18.
