Exemplar dividend rises 6.7% as township retail expands

South Africa's township and rural retail specialist delivers double-digit revenue and rental income growth, expands its shopping centre portfolio and maintains ambitious distribution guidance despite softer headline earnings.

• Exemplar REITail increases its interim dividend 6.7% to 90.58 cents per share, with full-year distribution growth guidance of 9–11%.
• Revenue climbs 13.8% to R847.3 million, while net property income rises 13% to R533.9 million.
• The portfolio expands to 31 retail assets covering 501,606m², reinforcing investor interest in township and rural shopping centres.

Township Retail Emerges as a Powerful Investment Sector

South Africa's township and rural shopping centres continue to demonstrate their investment appeal, with JSE-listed Exemplar REITail reporting another period of revenue growth, portfolio expansion and rising shareholder distributions.

For the six months ended 31 August 2026, Exemplar declared an interim dividend of 90.58305 cents per share, up 6.7% from 84.92758 cents a year earlier.

The results, released on 2 November, underline the resilience of convenience-led retail in historically underserved communities, where growing populations, established shopping patterns and demand for accessible retail services continue to support investment.

Led by CEO Jason McCormick, Exemplar specialises in developing, owning and managing shopping centres serving township and rural communities. Its portfolio comprises 31 retail properties across six South African provinces, with a combined gross lettable area (GLA) of 501,606m². Its wider property management footprint exceeds 770,000m².

The portfolio includes shopping destinations such as Mall of Thembisa, Alex Mall, Vosloorus Crossing, Leratong City, Steelpoort Retail Precinct and retail assets in KwaZulu-Natal, Mpumalanga and other regional markets.

Results Snapshot: Revenue and property income climb

Exemplar's interim results reveal strong underlying property performance, although earnings indicators moved in different directions.

Key investment highlights:

• Revenue increased by more than R102 million year-on-year.
• Net property income grew by approximately R61.6 million.
• NAV per share rose from R17.07 to R19.75.
• The interim dividend increased despite lower headline earnings.
• Management maintained its full-year distribution growth outlook.

Portfolio expansion drives the next growth phase

Exemplar is accelerating investment in township and rural retail infrastructure, targeting locations where established demand and limited modern retail supply offer long-term opportunities.

Major portfolio developments include:

• Vosloorus Crossing, Gauteng: An acquisition strengthening Exemplar's exposure to densely populated township retail markets.
• Steelpoort Retail Precinct, Mpumalanga: Expanding the group's regional retail footprint.
• iTonka Square, Springs: A major redevelopment and reopening, repositioning an established shopping destination.
• Leratong City, Kagiso: A significant retail development forming part of the broader Leratong Smart City initiative.
• Ntuzuma Mall and KwaMashu Place, KwaZulu-Natal: New retail developments scheduled to open in March 2027.

The acquisitions of Vosloorus Crossing and Steelpoort Retail Precinct added approximately 39,821m² to Exemplar's portfolio.

The expansion reinforces the company's strategy of building scale in markets where shopping centres serve as essential community infrastructure rather than purely discretionary retail destinations.

Jason McCormick: Confidence in township retail growth

CEO Jason McCormick believes township retail's investment fundamentals are attracting greater recognition from property investors and financial institutions.

Speaking to media following the results, McCormick highlighted the remarkable opening of Leratong City Mall, which attracted nearly 70,000 visitors on its first Thursday.

He described the development as a major addition to both Exemplar's managed portfolio and the broader township retail market. McCormick also pointed to population growth, backyard accommodation and the importance of cash-based economic activity as factors supporting trading performance in township shopping centres.

His assessment reflects a wider investment trend: established township retail centres can benefit from dense residential catchments, convenience shopping and strong relationships with national retailers.

Operational highlights:

• Portfolio vacancies remained low at approximately 2.6%.
• Anchor tenant trading densities increased by approximately 2.5%.
• Loan-to-value remained around 38%.
• Growing interest from lenders is supporting investment in established township retail locations.

The group nevertheless faces rising operating costs, consumer affordability pressure and the need to deliver returns from its expanding development pipeline.

Why headline earnings fell despite stronger dividends

One of the more important aspects of Exemplar's results is the divergence between basic earnings, headline earnings and distributions. Basic earnings per share increased 39.1%, while headline earnings per share declined 6.9%.

Basic earnings can include fair-value movements in investment properties. Headline earnings exclude certain gains and losses, including qualifying property revaluation movements, providing a different perspective on reported profitability.

For REIT investors, however, headline earnings are not the same as distributable income. Distributions are assessed using the company's applicable distributable-income calculation, which takes account of property cash generation, financing costs and relevant adjustments.

Exemplar's higher dividend therefore does not contradict its lower HEPS. However, investors should examine the full reconciliation of distributable income, financing costs and cash flows rather than relying on any single earnings measure.

The interim distribution growth of 6.7% is also slower than the double-digit growth achieved in previous reporting periods, making the company's reaffirmed full-year guidance particularly important.

Outlook: Exemplar Targets 9–11% Distribution Growth

Exemplar has reaffirmed its expectation that distribution per share will increase by 9–11% for the financial year ending 28 February 2027.

The outlook reflects management's confidence in rental growth, portfolio performance and the contribution of acquisitions and developments.

Three factors will determine future performance:

• Retail trading resilience: Sustaining tenant sales and occupancy despite pressure on household spending.
• Development execution: Bringing new centres online successfully and converting expansion into distributable earnings.
• Financial discipline: Managing borrowing costs, operating expenses and capital investment while protecting shareholder returns.

The Bottom Line: Township retail's investment case strengthens

Exemplar's latest results reinforce the growing importance of township and rural retail as an institutional property investment sector.

Double-digit revenue and property income growth, expanding assets and higher shareholder distributions demonstrate the strength of its specialised investment model.

But investors should not overlook the slower interim distribution growth, declining headline earnings and execution risks associated with a substantial development pipeline.

The investment opportunity is compelling, but the next test is whether Exemplar can convert its expanding retail footprint into sustained cash-backed distribution growth.

For South Africa's listed-property sector, Exemplar provides further evidence that attractive opportunities are not confined to traditional metropolitan shopping centres. Increasingly, they are emerging in the communities where accessible, well-managed retail infrastructure is most needed.