Dipula marks 20 years with strong interim results and focused strategy for resilient growth

Top 3 Highlights

• Distributable earnings per share up 4.2%, tracking within guidance; property values rise 5% to R10.3 billion.
• Vacancy rates decline across all sectors; office recovery gains traction, industrial vacancy drops to just 4%.
• R117 million invested in upgrades, including solar expansion to 16MW, reaffirming sustainability and long-term asset performance.

Dipula Properties (JSE: DIB) has delivered strong interim results for the six months ended 29 February 2025, marking its 20th anniversary with solid operational and financial performance, increased portfolio value, and visible progress across key strategic initiatives.

The diversified, South Africa-focused REIT reported a 4.2% increase in distributable earnings per share (DPS), tracking within full-year guidance of 4% to 6%. The total property portfolio increased in value by 5% to R10.3 billion, with net asset value rising 6%, underpinned by positive leasing momentum and disciplined capital management.

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CEO Izak Petersen commented, “Our performance reflects sound delivery in a challenging environment, anchored by a defensive portfolio and proactive management. While higher interest and hedge costs remain headwinds, we are encouraged by continued stability in our retail and industrial segments, and early signs of recovery in offices.”

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Dipula’s portfolio spans 161 properties, primarily in Gauteng, with retail assets comprising 67% of income. These are concentrated in townships, peri-urban and high-access urban convenience locations, ensuring strong foot traffic and resilience to economic pressures. Retail vacancies remained steady at 6%.

Encouragingly, overall portfolio vacancy declined from 8% to 7%, supported by robust leasing activity. New and renewed leases worth R309 million were concluded during the period, with average positive rental reversions across sectors: office (8.3%), industrial (6.2%), and retail (2.4%).

Despite stricter tenant criteria in its mini-industrial portfolio, tenant retention was a healthy 79%, and industrial vacancies still decreased. Industrial and logistics properties, now contributing 13% of rental income, maintained a low 4% vacancy rate, highlighting their continued market appeal.

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The office portfolio, contributing 16% of income, showed signs of revival with vacancy improving from 23% to 19%. “The Johannesburg office market is still highly competitive, but this trend is promising,” Petersen noted.

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Revenue was stable at R760 million, while net property income grew by 3.0%. Property expenses rose 6.0%, largely due to municipal tariff hikes. Still, Dipula maintained cost discipline, holding its cost-to-income ratio at 43.5%, with admin costs unchanged at 4%.

Dipula invested R117 million in refurbishments and redevelopments, including nearly R70 million into income-enhancing projects, such as its expanding solar programme. The company will more than double its solar PV capacity to 16MW this year, aligning with long-term sustainability goals. Proceeds from R125 million in asset disposals, achieved at a 4% premium to book, funded much of this investment.

Dipula is also exiting its residential portfolio (currently 4% of income), to reallocate capital to its core retail and industrial sectors. Residential vacancies improved from 10% to 9% during the period.

The Group’s gearing remained stable at 36.3%, with a healthy interest cover ratio of 2.8 times and R400 million in undrawn facilities, underscoring balance sheet strength.

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Looking ahead, Petersen said, “We remain focused on driving operational efficiency, recycling capital into our core assets, and building a more resilient portfolio. As we celebrate 20 years, Dipula is well positioned for the future.”