Fairvest expects to exceed the upper end of its distribution growth guidance of 8% to 10% for the 2025 financial year, driven by a resilient portfolio and operational efficiencies in a tough macroeconomic environment.
In a pre-close update for the year ending September 30, the JSE-listed real estate investment trust (Reit) on Thursday reported stable trading conditions, with its retail portfolio — accounting for 70.9% of group revenue — continuing to anchor performance.
The group increased its property portfolio to 128 assets, up from 127 in March, with total gross lettable area rising to just over 1.05-million square metres.
Vacancies across the portfolio ticked up slightly to 5.9% from 5.5% reported in March, while tenant retention declined to 79.6% from 81.3%. However, Fairvest achieved positive rental reversions of 5.0%, up from 4.3% previously, reflecting improved leasing conditions.
The group also highlighted progress in its alternative infrastructure investment strategy, with R486m deployed into Onepath Investments, a subsidiary focused on acquiring de-risked fibre infrastructure in township areas.
“The fibre infrastructure is rented to a fibre network operator to provide high-quality internet access to township homes and communities. The rent received generates an attractive, accretive dividend yield for Fairvest,” the group said.
In addition, the investment provides the group with access, information and insights that are valuable as regards its existing retail portfolio as well as new retail opportunities, it said.
“Digital inclusion for underserviced communities enables opportunities for education, employment, entrepreneurship and entertainment. As these communities do better, this enhances Fairvest’s core retail market,” the group said.
The group’s office portfolio continues to face structural pressure, with vacancies at 13.0% — a slight improvement from 13.4% in March — amid ongoing weak demand and hybrid work trends. The group trimmed its exposure to 28 properties (from 29), while gross lettable area remained steady at 214,654m². Tenant retention improved to 64.2%, but rental reversions eased to 4.7% from 6.9%
The group’s industrial portfolio recorded strong rental growth, with positive rental reversions increasing to 8.1% from 6.8% in March. However, the segment experienced higher vacancies, rising to 4.9% from 1.6%, while tenant retention declined to 76.9% from 85.2%, indicating some leasing pressure despite the overall resilience of the 25-property portfolio.
The group expects to close the 2025 financial year with its loan-to-value ratio below 30%, while keeping more than 85% of its debt fixed. It expects to meet all its bank’s covenants.
Fairvest raised R400m in an oversubscribed accelerated bookbuild on March 24 2025, pricing the offer at a 1.05% discount to the 30-day volume-weighted average price.
During the period, Fairvest acquired Thembalethu Square in George, as well as Shoprite Manguzi, Ulundi Shopping Centre, and Nquthu Shopping Centre in KwaZulu-Natal. The transfer of Eyethu Junction, also in KwaZulu-Natal, is expected by November 2025. The group also disposed of New Pioneer Park and Access City in Gauteng as part of its ongoing portfolio reshaping.
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