Spear REIT, a Western Cape-focused real estate investment trust, is heading into the second half of its financial year with earnings tracking at the upper end of guidance, supported by strong overall operational and financial performance.
The company revealed this at a market briefing, where it also announced that it secured R1.4bn in acquisitions, raised R1bn in equity, and delivered strong rental growth in the six months to July.
Spear reaffirmed its target of growing its 2027 financial year distribution per share by 6% to 8% compared with the 2026 financial year, while maintaining a 95% payout ratio.
Its performance was underpinned by positive rental reversions of 6.78%, weighted average lease escalations of 6.92%, occupancy of 96.37%, and cash collections of approximately 99% across the core portfolio.
Revenue increased 28.29% year to date, while net operating income rose 29.41%.
CEO Quintin Rossi stated that the first half demonstrated the resilience of the portfolio and the strength of the Western Cape strategy.
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Quintin Rossi said the company has continued to grow through acquisitions while maintaining strong operational metrics and a conservative balance sheet.
They enter the second half with considerable momentum and a clear pipeline for further value creation.
Spear’s growth drive included two transactions during the period: Watergate Centre in Mitchells Plain and 1 Sportica Crescent in Tygervalley, which were acquired for a combined R1.402bn.
Both properties have recently transferred, adding 48,169m² to the portfolio at an average acquisition yield of 8.99%.
Spear’s industrial portfolio continues to perform strongly, with occupancy of 97.98% and rental reversions of 14.32%.
Retail occupancy was 97.17%, with reversions of 7.88%, while commercial occupancy stood at 90.24%, with reversions of 4.26%.
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The company invested R140m in new industrial developments during the period, including a new 10-year lease with Mambos Storage & Home for a 7,150m² warehouse.
Renewable energy is also a meaningful contributor to portfolio income, with solar infrastructure across 28 assets, generating more than 5.17 million kWh year to date.
Spear also sold Hamilton & Chiappini House for R107m, achieving a 33% premium to its original acquisition price.
With low gearing, positive rental growth, and further acquisitions and developments in the pipeline, Spear enters the second half of FY2027 with continued growth momentum.
It has strong momentum.
