Vukile’s Castellana Properties posts record $193 million profit as Iberian portfolio tops $2.5 billion

Castellana Properties, the Spanish subsidiary of Vukile Property Fund Limited, the Johannesburg-listed retail REIT led by CEO Laurence Rapp, has reported record financial results for its latest fiscal year, underpinned by strong operational growth and strategic portfolio transformation.

The listed real estate firm focused on shopping centers and retail parks in the Iberian Peninsula posted net profit of €167.8 million ($192.6 million), marking an 85% increase from the previous year, supported by rising gross rental income, improved asset performance, and nearly €1 billion ($1.15 billion) in strategic transactions across Spain and Portugal. Net operating income climbed to more than €116 million ($132.89 million), up 56%, while EBITDA exceeded €100 million ($114.56 million), reflecting growth of over 63%.

On a like-for-like basis, Castellana delivered solid gains, with gross rental income increasing by 6.2% and NOI rising by 7.9%, highlighting the resilience and quality of its asset base.

The Iberian retail property owner also reported EBITDA growth of 63% and lifted Gross Asset Value (GAV) to €1.96 billion ($2.25 billion) at year-end, rising further to €2.2 billion ($2.52 billion) following completed acquisitions. The results reinforce Castellana’s position among the leading retail real estate operators in the Iberian Peninsula as it accelerates portfolio optimization and expansion into dominant shopping center assets.

Strong asset growth and portfolio expansion

Gross Asset Value stood at €1.96 billion ($2.25 billion) at the end of the fiscal year, representing an 18% increase. Following the completion of key transactions after year-end, including acquisitions in Madrid (Islazul), Barcelona (50% stake in Splau), and Logroño (Berceo), alongside the disposal of a retail park portfolio, the company’s GAV has since risen to €2.2 billion ($2.52 billion).

Castellana now manages 15 assets with a combined gross lettable area of 595,469 square meters, reinforcing its position as a major retail property player in Spain and Portugal.

Alfonso Brunet, CEO of Castellana Properties, described the period as a “historic year,” citing growth in footfall, tenant sales, and portfolio value.

“We have taken a key step in our capital rotation strategy, crystallizing value in mature assets and reinvesting in dominant shopping centers with strong growth potential,” Brunet said, adding that the company remains focused on innovation, active asset management, and long-term value creation.

Operational strength drives performance

Operational metrics remained robust throughout the year, with occupancy at 98.9% and rent collection at 98.6%, placing the company above sector benchmarks.

Leasing activity reached record levels, with 303 contracts signed, generating €20.2 million ($23.15 million) in new rents and delivering an average rental uplift of 9.1%.

Footfall across the portfolio rose to 102 million visits, up 3.6%, while tenant sales increased by 4.5%. Growth was particularly strong in key retail segments, including food, home, leisure, and fashion. The company’s Portuguese portfolio also delivered a standout performance, surpassing 35 million visits and recording sales growth of 4.1%.

Financial discipline earns rating upgrade

Castellana maintained a conservative financial profile, with a net loan-to-value ratio of 33.4%. Approximately 90% of its debt is fixed-rate, with an average cost of 4.57%.

This disciplined approach was recognized by Fitch, which upgraded the company’s credit rating to ‘BBB’ with a stable outlook, highlighting portfolio diversification and prudent risk management.

Transformation projects and future growth

During the year, Castellana advanced multiple value-enhancing projects across its portfolio.

At Vallsur in Valladolid, the second phase of redevelopment was completed, boosting footfall by 6% and introducing new retail concepts, including a large indoor leisure attraction. In Logroño, the newly acquired Berceo asset is undergoing repositioning, with upgrades focused on food and beverage offerings and tenant mix optimization.

In Madrid, Castellana has begun a comprehensive refurbishment of Islazul, aimed at modernizing the asset and enhancing customer experience, while expansion work continues at Los Arcos in Seville, with completion expected in 2027. The company also completed the integration of its Portuguese assets, with all four centers achieving record footfall levels.

Focus on ESG and digital transformation

Castellana remains a key growth vehicle for Vukile in Spain’s retail real estate market. Castellana strengthened its sustainability credentials during the year, maintaining top-tier ratings, including EPRA and GRESB recognitions, alongside its Great Place to Work certification.

The company also advanced its digital transformation strategy, completing the first year of its artificial intelligence and cloud integration roadmap, with full employee adoption of new digital tools.

As Castellana enters its next growth phase, management is expected to prioritize further portfolio optimization, innovation, and expansion, positioning the firm to capitalize on evolving retail dynamics across the Iberian market.