JSE-listed retail- and industrial-focused real estate investment trust Dipula increased its revenue for the financial year to August 31, by 11% year-on-year to R1.7-billion, while its net asset value increased by 20% year-on-year to R8.2-billion.

Distributable earnings increased by 22% year-on-year to R636-million, while distributable earnings per share (DEPS) were 8.6% higher year-on-year at 62.17c.

The company maintained its 90% payout ratio of DEPS for the financial year under review, and declared a final gross dividend of 28c a share.

Net property income for the year increased by 12% to R1-billion.

Debt also increased by 4% year-on-year to R4-billion, but the company’s gearing level reduced to 31.8%, down from 34.9% in the 2025 financial year.

Net finance costs declined by 3% to R297-million, supported by lower interest rates and a lower interest expense as a result of debt repayments funded from the proceeds for property disposal.

Dipula’s weighted average interest rate decreased to 8.9%, from 9.3% in the prior financial year.

Property-related expenses increased by 9% to R670-million, partly owing to the impact of acquisitions. Excluding acquisitions, expenses increased by 6%.

Further, strong revenue growth and disciplined cost management resulted in an improvement in Dipula’s gross cost-to-income ratio declining to 42.6% from 43.2% in the prior financial year.

Its gross administrative cost-to-income ratio remained broadly stable at 3.3%, compared with 3.4% in the 2025 financial year, reflecting continued cost discipline at corporate level.

Dipula’s portfolio remains weighted towards the retail sector, which contributed 69% of gross income, up from 67% in the 2025 financial year. Gauteng represents the largest concentration, accounting for 61% of gross income, up from 59% at the end of its 2025 financial year.

The company’s retail portfolio saw organic revenue growth of 6%, its industrial properties posted 9% organic revenue growth and residential generated 14% organic revenue growth, while office revenue declined by 2%, owing to rental discounting.

“We have been strategically reducing our exposure to the office sector and, subsequent to year-end, we entered into an agreement to dispose of our residential portfolio,” the company, which is led by CEO Izak Petersen, says.

Dipula entered into agreements for the disposal of noncore properties for a total consideration of R197-million. Proceeds from these disposals will be used to repay debt, fund value-enhancing refurbishments, fund strategic acquisitions and support the roll out of sustainability initiatives.

Post year-end, Dipula entered into an agreement to dispose of a substantial part of its residential portfolio for a total consideration of R268-million, it says.

Further, the company improved occupancy across its portfolio to 94%, up from 91% in the prior financial year. Retail occupancy was constant at 95%, while office occupancy improved to 78%, up from 74% in the prior financial year, and industrial occupancy improved to 97%, up from 94% a year prior.

Dipula acquired 14 assets during the financial year under review, at an aggregate cost of about R3-billion. The company continues to execute its strategy of disciplined, targeted and value-accretive growth, it says.

Meanwhile, the group invested R122-million in refurbishments and capital expenditure (capex) during the year under review, down from R214-million in its 2025 financial year.

Of the R122-million, R67-million was allocated to defensive capex, while the remaining R55-million was directed towards income-enhancing refurbishments and capital projects.

A further R250-million in capex is planned over the next 12 to 18 months. Of this amount, R150-million will be allocated to income-generating projects, expected to deliver returns of about 9.5%, with the balance directed towards defensive capex aimed at enhancing and improving the existing portfolio.

Dipula monitors its energy and water use, waste and emissions to improve resource efficiency, reduce its environmental footprint and guide investment decisions.

The related initiatives it is implementing include reducing emissions, expanding renewable-energy generation, improving water efficiency and strengthening waste management.

The company reports that its electricity-related emissions decreased by 2% during the year under review, while on-site renewable energy generation reached 17.51 MW.

Further, it engages its tenants, employees and suppliers to promote sustainable practices across the value chain. Monitoring emissions and resource use helps Dipula track progress, identify improvements and support a resilient, efficient and sustainable business, the company says.

The company also reduced its Scope 1, 2 and 3 emissions by 2% during the period under review. Tenant electricity consumption accounts for 74% of the group’s emissions and it prioritises energy efficiency, cleaner energy and tenant collaboration to reduce emissions and support a low-carbon economy.

Additionally, water security remains an operational priority in South Africa, and Dipula monitors consumption, uses water loggers to detect leaks and identify savings, and implements efficiency measures, such as smart meters, upgraded plumbing and water-wise irrigation.

It also engages with its tenants to promote responsible water use and use indigenous plants where appropriate to reduce consumption and support local biodiversity.

Water-related expenses increased by 3% year-on-year to R43-million during the financial year.

OUTLOOK
The fundamentals of the South African real estate sector have continued to improve, supported by improved access to capital, a narrowing gap between buyer and seller price expectations and greater operational stability.

The significant improvement in the reliability of the national electricity grid, together with a more stable political and policy environment under the Government of National Unity, has strengthened business confidence and provided a more supportive backdrop for property owners and occupiers, the company notes.

Further, the sector continues to benefit from strengthening property fundamentals, resilient tenant demand in defensive sectors and a gradual recovery in property valuations.

However, the operating environment remains challenging owing to subdued economic growth, renewed inflationary pressures and interest rates beginning to rise.

Ongoing inefficiencies and service delivery challenges at local government level also remain a material risk to property owners and continue to constrain investment and economic growth, Dipula states.

“Despite these challenges, we remain positive about the prospects for the South African property sector. Dipula’s strategic focus remains firmly on active asset management, extracting value from our existing portfolio and increasing our exposure to defensive retail and industrial assets in well-located nodes across South Africa.

“Our performance continues to be supported by prudent capital allocation, operational efficiency and focused, hands-on asset and property management. We remain disciplined in our approach to investment and capital deployment, with a focus on sustainable income growth, improving asset quality and enhancing long-term shareholder value.”

Dipula expects its DEPS to grow by 8% to 10% for its 2027 financial year.