Vukile approves $155 million shareholder loans to Castellana to fund growth pipeline

Vukile Property Fund Limited, the Johannesburg-listed retail REIT led by CEO Laurence Rapp, has approved €131.3 million ($155 million) in shareholder loans to its Spanish subsidiary, Castellana Properties SOCIMI, reinforcing its commitment to funding expansion and capital deployment in its European retail property platform.

The approval follows a board resolution adopted on Feb. 13, 2026, in terms of Section 45 of South Africa’s Companies Act, authorizing Vukile to provide direct financial assistance to Castellana. The authority stems from a special resolution passed at the company’s annual general meeting held on Sept. 1, 2025.

Funding expansion in Spain
The shareholder loans, which are capital in nature, will support Castellana’s existing transaction pipeline as it advances acquisitions and asset management initiatives within its Spanish portfolio.

The funding package comprises two tranches:
• €30 million bearing interest at 4.0 percent, repayable in July 2026, with the intention of being converted into equity; and
• €101.3 million, also at 4.0 percent interest and repayable in July 2026, likewise intended for equity conversion.

The structure signals Vukile’s strategy of strengthening Castellana’s balance sheet while positioning the capital injection for potential long-term equity support rather than short-term debt servicing.

Board affirms solvency and fairness
The total value of the financial assistance exceeds one-tenth of one percent of Vukile’s net worth at the time the resolution was adopted, triggering disclosure requirements under the Companies Act.

In line with statutory requirements, the board confirmed that immediately after extending the loans, Vukile satisfied the solvency and liquidity test outlined in Section 4 of the Act. Directors further stated that the terms of the financial assistance are fair and reasonable to the company.

Strategic European positioning
Under the leadership of Laurence Rapp, Vukile strengthened its balance sheet with a $28.4 million bond issuance that attracted over $170 million in bids. The issuance lowers the company’s average cost of debt and extends its maturity profile.

Castellana remains a key growth vehicle for Vukile in Spain’s retail real estate market. The shareholder funding underscores Vukile’s long-term capital allocation strategy, using structured intra-group financing to scale high-performing offshore assets while maintaining compliance with governance and balance sheet safeguards.