South African executive Laurence Rapp-led Vukile Property Fund raises $28.4 million in bonds

Vukile Property Fund Limited, the Johannesburg-listed retail REIT led by CEO Laurence Rapp, has successfully raised R500 million ($28.4 million) through an oversubscribed bond issuance, lowering borrowing costs and extending its debt maturity profile. 

The three- and seven-year tranches attracted bids of more than R3 billion ($170 million), pricing at record-low margins of 102 basis points and 135 basis points, respectively. The weighted margin of 121 basis points reduces funding costs compared with debt maturing in 2026.

Vukile raises bonds at record-low pricing margins

The issue drew strong support from more than 21 institutional investors, with Absa Bank acting as the sole lead arranger. Proceeds will refinance higher-cost borrowings, strengthening the balance sheet and reducing Vukile’s average cost of capital.

The transaction follows GCR Ratings’ July 2025 upgrade of Vukile’s long-term issuer credit rating to AA+(ZA), underpinned by the resilience of its R50 billion ($2.82 billion) retail portfolio across South Africa and Iberia, where it controls 99.6 percent of Castellana Properties.

Chief Executive Officer Laurence Rapp said, “We are pleased with the strong demand and favorable pricing received, which reflects confidence in Vukile’s disciplined capital management, high-quality assets, and long-term strategy,” Rapp said.

Strong earnings and portfolio expansion

For the year ended March 31, 2025, Vukile more than doubled net profit to R3.23 billion ($181.3 million) from R1.61 billion ($90.3 million) a year earlier.

In South Africa, like-for-like net operating income rose 6.4 percent, trading density increased 5.2 percent, and vacancies narrowed to 1.7 percent. In Iberia, Castellana Properties recorded rental reversions of 17.3 percent with 98.4 percent occupancy.

The portfolio expanded 37.3 percent to R50.3 billion ($2.82 billion), supported by acquisitions including the €305 million ($354.36 million) Bonaire Shopping Centre in Valencia, Spain. Vukile declared a final dividend of R0.765 ($0.043) per share, totaling R953 million ($53.5 million), representing an 83 percent payout ratio.

Positioned for long-term growth

Under the leadership of Laurence Rapp, Vukile strengthened its balance sheet with a $28.4 million bond issuance that attracted over $170 million in bids. The issuance lowers the company’s average cost of debt and extends its maturity profile.

With reduced funding costs, stronger credit ratings, and continued earnings growth, Vukile is well-positioned to drive long-term value through its consumer-focused retail portfolio in Southern Africa and Iberia.