Burstone’s Global Expansion Strategy Fuels Growth Momentum

About Burstone Group Limited

Listed on the Johannesburg Stock Exchange since 2011, Burstone Group is a fully integrated international real estate business managing approximately R42 billion (€2.1 billion) in gross assets and R23.4 billion (€1.2 billion) in third-party capital.

With operations in South Africa, Europe, and Australia, the company has evolved into a global real estate platform offering fund management, investment, asset and development management. About 68% of its asset base is offshore, supported by local expertise in each region.

FY25 Annual Results: Strategic Reset, Solid Performance

Burstone delivered on its FY25 guidance during a transformative year that reshaped its operating model and enhanced financial resilience. Key highlights include:

• Dividend up 3.1% to 92.22 cents per share
• Distributable earnings per share down 3% to 102.5 cents
• Fee revenue up ~40%, now 10.7% of earnings (from 7.3%)
• Third-party AUM surged 2.6x to R23.4 billion
• LTV reduced from 44% to ~36%, strengthening the balance sheet
• Net operating income (NOI) up: +0.2% in SA and +0.5% in Europe (Euros)

CEO Andrew Wooler noted:

“We have a sound balance sheet and a solid foundation for growth. The strategic transformation is delivering results.”

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Transformation Highlights: New Models, Global Deals

FY25 was defined by high-impact partnerships and platform launches that expanded Burstone’s global reach and deepened recurring revenue:

• Europe: Burstone formed a landmark partnership with Blackstone, with Burstone taking over asset management of the Pan-European Logistics (PEL) portfolio and retaining a 20% stake.
• Australia: In collaboration with TPG Angelo Gordon, Burstone launched an industrial fund platform through its Irongate JV. Initial investments total A$280 million in logistics assets, with Burstone contributing A$20 million (15%).
• Third-party capital management grew sharply, diversifying revenue and reducing dependence on direct property ownership.

South Africa: Stability Amid Gradual Recovery

Burstone’s South African portfolio remained mature and resilient, delivering a steady 0.2% NOI increase.

Key takeaways

• Strong leasing in the industrial sector, with long-term renewals
• Office sector saw improvement but still faces negative reversions
• Sales of ~R1 billion assets at only 2.5% discount to book
• Disciplined expense control and efficient capital recycling
• WALE maintained at 3.0 years

While macro conditions remain challenging, signs of improvement are emerging, particularly in industrial and select retail nodes.

Europe: Strategic Platform Launched

The Pan-European Logistics (PEL) portfolio performed well, though rental growth was tempered by higher vacancies.

Notables:

• NOI growth of 0.5% (vs. 6.2% in FY24)
• Completion of Blackstone transaction in Nov 2024
• Launch of European funds and asset management platform positions Burstone to scale investor-driven income

Australia: High Growth, Model Validation

Australia continues to be a key proof point for Burstone’s model.

• Equity AUM rose to A$624 million, +27% YoY
• Fee income up 16.7%, driven by strategic asset rollouts
• Smithfield asset (co-invested with Phoenix Property Investors) saw 11% value uplift
• Total equity deployed: ~A$52 million / R0.7 billion

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Wooler highlighted: “Australia shows what our model can achieve. We’re scaling equity, building partnerships, and the earnings flywheel is accelerating.”

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Challenges and Opportunities

Global real estate continues to face macroeconomic uncertainty, higher-for-longer interest rates, and slower capital deployment. However, Burstone’s evolving business model, blending property ownership with capital-light fund management, offers agility and diversified income.

Challenges:

• Office sector pressure in SA
• Higher vacancies in European logistics
• Slower deal cycles due to global caution

Opportunities:

• Growing appetite for logistics and industrial assets
• Capital partner demand for specialised platforms
• Enhanced management fees and reduced capital intensity

The Way Forward: Measured Growth, Strong Foundation

Burstone expects 2 - 4% earnings growth for FY26, driven by:

• Scaling platform strategies across all regions
• Enhancing fee-based income
• Efficient capital deployment and recycling
• Continued resilience in South Africa and momentum in Europe and Australia

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“We are confident in the model we’ve built. As we deepen our partner networks and platforms, we’re unlocking more sustainable, scalable growth,” Wooler said.

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Conclusion

Burstone’s hybrid real estate platform is gaining traction. FY25 proved its ability to transform from a traditional property group into a nimble, internationally integrated investment and asset management business, ready to seize opportunities and create long-term value across markets.

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