Vukile targets more Spain, South Africa deals after $127 million Berceo mall buy

Vukile Property Fund, one of South Africa’s leading retail real estate investment trusts, is signaling a renewed appetite for expansion both at home and in Europe after its recent $127.6 million (€108 million) acquisition of Berceo Shopping Centre in northern Spain. The deal, executed through Vukile’s 99.7 percent-owned Spanish subsidiary, Castellana Properties SOCIMI SA, adds a dominant asset in La Rioja, the heart of Spain’s wine country, to the company’s growing portfolio of income-generating retail properties outside South Africa.

Laurence Rapp, Vukile’s CEO, framed the Berceo buy as part of a larger, deliberate strategy to rotate assets and capture higher returns. “When we entered Spain in 2017, we bought nine retail parks at the right entry point. Since then, we’ve enhanced the portfolio—adding tenants, reconfiguring spaces, and increasing net income by nearly 26 percent. As any good asset manager knows, it’s important to rotate assets. Retail parks were performing well, but there’s strong investor demand, rising prices, and increased supply. Shopping centers, on the other hand, have higher growth potential, limited supply, and better rental yields. Selling the retail parks now allows us to redeploy capital into assets with stronger growth prospects.”

Partnership with Pradera strengthens operations

The Berceo deal itself involved acquiring 34,416 square meters of gross lettable area spread across 90 stores from Barings Core Logrono SLU, while the remaining portion remains occupied by a Carrefour hypermarket and owned by Olimpo Real Estate SOCIMI. The center, which opened in 2003, serves Logroño and surrounding provinces and draws nearly six million visits annually. Key tenants include Zara, Primark, MediaMarkt, and YelmoCinemas, anchoring the center as a dominant regional hub.

Acquired at a 7 percent yield, using 40 percent debt at 4.5–4.7 percent, the transaction provides Vukile with an 8.6 percent cash-on-cash yield. Rapp described plans to enhance the asset’s value through retenanting, expanding food and beverage options, and improving the customer experience. “The catchment area has about 4.5 million people, smaller than South Africa, but income levels are high—around €32,000 ($38,000) per capita—compared to much lower South African GDP per capita. It’s a strong combination of high demand, purchasing power, and limited supply, which makes it an ideal investment,” he said.

The acquisition of Berceo follows Vukile’s strategic move earlier this year to acquire a 35 percent stake in Pradera Limited, a pan-European asset management firm managing €5 billion ($5.9 billion) in assets across ten countries. For Vukile, the partnership with Pradera offers operational depth and access to a team of over 100 retail property specialists across 12 offices, strengthening its ability to identify, manage, and price risk across multiple jurisdictions.

Returns, tenants, quality drive strategy

Despite the offshore focus, Rapp emphasized that local opportunities remain a priority. Over the past three years, Vukile has invested roughly R3 billion ($187 million) in South African township and urban malls, targeting assets that deliver strong returns. The group’s property portfolio is valued at $3.1 billion, split between South Africa and the Iberian Peninsula, and it currently trades at a premium to net asset value on the Johannesburg Stock Exchange. Rapp noted that favorable interest rate cycles, improving macroeconomic conditions in South Africa, and solid performance in Spain and Portugal support continued growth in earnings and share price.

As Vukile executes this deliberate expansion strategy, the message is clear: growth is measured, partnership-driven, and focused on maximizing returns rather than rapid asset accumulation. “Location is strategic,” Rapp said of Berceo and the broader Spanish acquisitions. “Our team knows these regions well, making integration easier. We expect to fully deploy the proceeds from the retail park sale and cash on hand by mid-April.” With its latest moves and European deals, Vukile is positioning itself as a disciplined yet ambitious player in the global retail property sector, balancing South African opportunities with carefully selected offshore assets that promise strong yields, high-quality tenants, and operational expertise.