Spear REIT tops guidance as portfolio hits R7bn

• Spear REIT delivered guidance-beating FY2026 growth as its Western Cape property portfolio surged beyond R7 billion.
• Occupancy remained exceptionally strong at 97.28% with collections above 99%, reinforcing operational resilience.
• Spear completed more than R1 billion in acquisitions and expects further portfolio expansion during FY2027.

Spear REIT has delivered another strong year of growth, outperforming market guidance and reinforcing its position as one of South Africa’s most focused regional real estate investment trusts.

The Western Cape-focused REIT reported a 6.02% year-on-year increase in both distributable income per share (DIPS) and distribution per share (DPS) for the financial year ended 28 February 2026, exceeding the group’s guidance range of 4% to 6%.

The performance comes as Spear approaches its 10-year anniversary as a listed REIT, with its portfolio now surpassing R7 billion in value following a year of strategic acquisitions, strong operational delivery and disciplined capital management.

Focused exclusively on the Western Cape market, Spear has built a diversified portfolio spanning industrial, retail, commercial and mixed-use assets across some of the province’s strongest-performing economic nodes.

The group’s strategy centres around actively managed, income-producing assets positioned to benefit from semigration trends, infrastructure investment and the Western Cape’s comparatively resilient economic fundamentals.

Strong financial performance across the board

‍Spear’s FY2026 results reflected broad-based operational strength across the portfolio.

Total revenue increased by 23.25%, while net property operating profit rose by 20.53%.

Portfolio value surged by almost 30% year-on-year to R7.18 billion, with total gross lettable area expanding to more than 630,000m² across 42 properties.

The REIT also maintained exceptionally strong operational metrics:

• Portfolio occupancy of 97.28%
• Rental collections of 99.33%
• Weighted average lease escalation of 7.04%
• R96 million generated in free cash flow from operations

Importantly, the balance sheet remained conservatively geared, with a loan-to-value ratio (LTV) of 22.94%, interest cover ratio (ICR) of 4.34 times and available liquidity of R382 million.

DIPS for FY2026 came in at 90.70 cents per share, while DPS increased to 86.16 cents per share.

Quintin Rossi: Discipline and strategic clarity

‍According to Quintin Rossi, the results reflect disciplined execution and a clear long-term growth strategy.

‍

“FY2026 has been a year that reflected disciplined execution by a great team driven by strategic operational, financial and investment clarity,” said Rossi.

‍

“We maintained an unwavering focus on top-line revenue growth, cost control and net operating income growth, while successfully delivering on our FY2026 growth objectives.”

‍

Rossi noted that Spear’s regional focus continues differentiating the REIT from many national property players.

‍

“Spear’s geographical focus allows it to capitalise on the Western Cape’s comparatively resilient economic base, well-developed infrastructure and strong property fundamentals, driving sustainable long-term value creation for all stakeholders,” he added.

‍

Acquisitions push portfolio beyond R7 billion

‍Acquisitions remained a major driver of growth during FY2026.

Spear concluded more than R1.074 billion in acquisitions during the year, significantly increasing its retail and industrial exposure across the province.

Notable acquisitions included:

• Maynard Mall in Wynberg
• Consani Industrial Park
• Berg River Business Park
• Recently announced Watergate Centre in Mitchells Plain

Collectively, the acquisitions added approximately 137,000m² of gross lettable area to the portfolio.

To support the expansion strategy, Spear successfully raised R749 million in equity during June 2025, strengthening its balance sheet and positioning the group to pursue further opportunities.

‍

“Our acquisition and development activity reflects a disciplined approach to growing the portfolio with high-quality, income-producing assets aligned to Spear’s long-term investment strategy,” Rossi said.

‍

Industrial assets remain the largest component of Spear’s portfolio, although the REIT continues increasing its exposure to commuter-convenience retail and mixed-use assets across high-growth Western Cape nodes.

The company also continued advancing development projects during the year, including progress at GTX Park in George.

Western Cape strategy continues paying off

‍Spear’s single-region strategy continues standing out within the South African listed property sector.

While many REITs maintain national portfolios, Spear has deliberately concentrated its investments within the Western Cape, leveraging the province’s semigration-driven demand, infrastructure investment and stronger economic growth profile.

The strategy has allowed the REIT to build deep regional expertise while actively managing assets within closely monitored nodes.

Management believes the Western Cape’s economic resilience and ongoing population inflows continue creating favourable long-term property fundamentals across industrial, retail and commercial sectors.

Looking ahead to FY2027

‍Looking forward, Spear remains firmly in growth mode. The REIT has guided for DIPS growth of between 6% and 8% for FY2027 and signalled a healthy pipeline of acquisition opportunities currently under consideration.

Management is targeting additional portfolio expansion of between R1 billion and R2 billion during the next financial year.

With strong occupancy levels, conservative gearing, healthy liquidity and a growing Western Cape footprint, Spear enters FY2027 with significant momentum.

As South Africa’s listed property sector continues navigating a complex economic environment, Spear’s focused regional strategy, disciplined capital allocation and active asset management approach continue positioning the REIT as one of the market’s standout growth stories.

‍