Wrap Text
Unaudited Financial Results And Dividend Declaration For The Six Months Ended 31 August 2025
SPEAR REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2015/407237/06)
Share code: SEA
ISIN: ZAE000228995
LEI: 378900F76170CCB33C50
Approved as a REIT by the JSE
("Spear" or "the Company")
UNAUDITED FINANCIAL RESULTS AND DIVIDEND DECLARATION FOR THE SIX MONTHS ENDED
31 AUGUST 2025
1. SALIENT FEATURES
HY2026 HY2025 Variance
Distributable income per cents 43.78 41.61 5.21%
share
Distribution per share cents 41.59 39.53 5.21%
Pay-out ratio % 95.00 95.00 -*
Total distributable income R'000 173,247 111,224 55.76%
Revenue excluding R'000 385,867 306,919 25.72%
smoothing
Revenue including R'000 395,363 310,167 27.47%
smoothing
Basic earnings per share cents 73.96 44.97 64.47%
Headline earnings per cents 43.33 38.73 11.88%
share
HY2026 FY2025 Variance
Loan to value % 13.85 27.09 -*
Tangible net asset value per R 12.10 12.20 -0.82%
share
Interest cover ratio Times 4.05 3.34 -*
SA REIT Cost to Income % 45.61 44.37 -*
SA REIT Administrative cost to % 6.39 6.78 -*
income
Weighted average cost of debt % 9.02 9.08 -*
Weighted average cost of % 8.84 9.29 -*
variable debt
Weighted average cost of fixed % 9.08 9.01 -*
debt
Fixed debt ratio % 74.99 77.53 -*
Weighted Average expiry of Months 26.99 25.97 -*
debt
Number of net shares in issue '000 395,759 320,400 23.52%
*Note: % variance is not applicable
2. KEY FINANCIAL HIGHLIGHTS
Industrial Commercial Retail Develop- HY26 Total FY25
ment Land Total
Number of properties 14 17 8 39 39
-
Value of properties 5,532,267
(R'000) 2,235,328 2,404,419 988,073 73,480 5,701,300
Value % 39% 42% 17% 1% 100% -
Property revenue excl 681,704
smoothing (R'000) 159,789 156,246 69,805 13 385,854
Revenue % 41.41% 40.49% 18.09% 0.00% 100% -
Property cost to 40.61% 38.19% 38.37% 1842.72% 39.25%
income ratio
GLA m² 487,418
304,310 127,447 55,560 - 487,317
GLA % 62.45% 26.15% 11.40% 0.00% 100%
Vacant area m² 14,634
10,677 11,469 2,088 - 24,233
Vacancy per sector % 3.51% 9.00% 3.76% 0.00% -
-
Vacancy on total GLA 2.19% 2.35% 0.43% 0.00% 4.97% 3.00%
%
Yield 8.42% 7.89% 8.64% - 8.23% 9.57%
Reversion % YTD 1.55% -10.84% -3.81% 0 1.31% 4.18%
Weighted average 7.47% 7.27% 7.27% 0.00% 7.31% 7.27%
Lease escalation %
Weighted average 24.58
unexpired lease term 38.27 23.99 31.44 - 29.72
(months)
3. CEO COMMENTARY
Spear has maintained its uniquely positioned strategy within the South African listed property sector as the only
regionally specialised Real Estate Investment Trust with a dedicated focus on the Western Cape. Since listing,
Spear has maintained its disciplined mandate of investing exclusively within the borders of the province, with a
distinct concentration in the Cape Town metropolitan region. This unwavering geographical focus enables the
management to leverage the Western Cape's resilient economy, superior infrastructure, and attractive real estate
fundamentals, which collectively provide a stable foundation for long-term value creation for all stakeholders.
Spear's portfolio is diversified across high-quality industrial, convenience retail, commercial, and mixed-use real
estate assets, each carefully selected to deliver sustainable and predictable cash flows. Spear's industrial assets,
in particular, remain a cornerstone of the portfolio, offering defensive income streams and exposure to sectors
aligned with the Western Cape's economic strengths. Complementing this are strategically located convenience
retail centres, premium commercial offices, and mixed-use developments, all of which are managed internally by
highly skilled asset and property management teams with a focus on maximising occupancy, tenant retention,
and rental growth.
Spear's mission is to be the leading Western Cape-focused REIT, consistently delivering annual growth in
distributions per share and achieving operational performance that ranks within the top quartile of the South
African REIT sector. This ambition is underpinned by a committed management team with extensive knowledge
of the regional real estate market, supported by years of practical experience and a proven track record of
execution. Spear's intimate understanding of local dynamics, combined with its commitment to maintaining close
operational proximity to assets, ensures a highly engaged, responsive, and hands-on approach to both asset and
property management.
As a true regional specialist, Spear prides itself on its ability to actively manage every asset in its portfolio,
applying a disciplined, detail-oriented methodology that safeguards long-term value while unlocking new growth
opportunities. This operational philosophy not only strengthens tenant relationships and enhances asset
performance, but also provides shareholders with the confidence that capital is being deployed into one of the
most stable and investable geographies on the African continent.
During the HY2026 Spear's management team has remained acutely focused on successfully navigating the
challenging trading environment and building on the rising tide of tenant activity and strengthening market
fundamentals year to date. Despite overall positive sentiments the HY2026 period has not been without its
challenges but in the same vain the half year has been a very active period for Spear as we have diligently
focussed on robust operational outcomes, maintaining a strong financial cadence and executing on key aspects
of Spear's growth strategy.
During HY2026 Spear acquired additional real estate assets to the value of R 1,074 billion at an average
acquisition yield of 9.54% which is in excess of Spear's weighted average cost of capital. The new acquisitions
are set to transfer into the core portfolio during Q3 & Q4 FY2026. The core portfolio remains well placed to deliver
consistently on its strategic focus with the key drivers to such delivery being strong return-to-office and letting
momentum, semigration, localisation, commencement of an interest rate cutting cycle in South Africa and a
constraint in supply of real estate assets in certain sub-sectors within the Western Cape.
Robust rental collections, growing letting activity, tenant retention, and hands-on financial, debtors and vacancy
management remain the key building blocks for the entire Spear team in FY2026 and beyond. Successful and
hands-on marketing and letting initiatives across the core portfolio has seen occupancy levels remain robust at
95.03% in HY2026 in addition to Spear's balance sheet being primed for growth with a HY2026 LTV of 13.85%
prior to the implementation of the Berg River Industrial Business Park, Consani Industrial Park and Maynard Mall
acquisitions.
Spear remains well placed to successfully execute on its mission and strategy over the balance of FY2026 and
beyond as both operational and finance performance of the core portfolio remains aligned with management's
forecasts for the financial year.
Sectoral performance
Industrial portfolio
Spear's industrial portfolio remained a significant moat around the operating business during HY2026. The
industrial portfolio makes up 62% of gross lettable area (GLA). The defensive composition of the industrial
portfolio is made up of logistics, urban logistics, warehousing, manufacturing and multi-let industrial parks (MLI)
in highly sought after nodes with in the Cape metropole. All of Spear's industrial assets offer versatile operational
areas, yards, access control and 24 hour security all with embedded PV Solar infrastructure either full
commissioned or in the process of being commissioned. Spear's development pipeline of high quality industrial
assets is set to add further value to the core industrial portfolio with the GTX Development in George set to add
30 000m2 of industrial GLA, Bravo Park extension 2 in Blackheath set to add 7 000m2 of industrial GLA and The
Anchorage in Paarden Eiland set to add 2 000m2 of industrial GLA.
Retail portfolio
Spear's retail portfolio has generated consistent forecast-aligned performance during HY2026 as both the
convenience and destination retail portfolio operate with high occupancy and collection rates. The addition of the
medical retail assets into the core retail portfolio has been smoothly integrated and are trading very well. The
decline in interest rates and the effects of two-pot withdrawals have had positive impacts on Spear's tenants as
consumer demand returns as spending power increases. Spear's tenants have reported positive trading
conditions as footfall levels remain strong and basket sizes remain in line with tenant expectations particularly
within the apparel segment. Currently, 47.5% of Spear's retail tenant mix is made up of national tenants, with
management focused on increasing this proportion over time as a key credit risk mitigant. Importantly, none of
Spear's retail assets are dependent on local or international tourism but instead benefit from their positioning
within strong residential, commuter and commercial nodes. The retail portfolio is concentrated in high-growth
areas that service a broad range of LSM groups, supporting continued brand expansion by national retailers
across the portfolio. The positive rental reversion achieved at the half year is expected to further underpin
management's revenue growth strategy across all of Spear's subsectors.
Commercial portfolio
Spear's commercial office assets have been net benefactors of the constraint in supply of high-quality commercial
office space within Cape Town's primary commercial nodes. The localities of the commercial portfolio provide
ease of access to and from all main arterial routes and transportation hubs. The return-to-office momentum in
the Cape Town office market has positively improved the occupancy rate of Spear's office portfolio with ongoing
vacancy contractions evident. The positive effects in the marginal uptick in economic activity and the ongoing
effects of semigration to the Cape region and the establishment of international offices in Cape Town continue to
drive demand for quality office accommodation and rental growth opportunities together with a lack of meaningful
new supply. Management will maintain its focused and innovative letting campaigns across the office portfolio
with a key focus of consistently driving up occupancy rates within the portfolio.
Outlook and Guidance
Given Spear's strategy aligned operational and financial performance of HY2026 and the information
management has at its disposal at the interim results reporting date, management's full year DIPS guidance is
maintained at a growth rate of between 4% - 6% compared to FY2025. The payout ratio is set to be maintained
at 95% by the Board of Directors.
Guidance assumptions
Spear's guidance for the remainder of FY2026 remains informed and influenced by the following:
• No Loadshedding for the balance of FY2026
• Vacancies are reduced in line with management's forecast
• Lease renewals are concluded per management's forecast
• No major tenant failures occur during the year
• Tenants continue to successfully absorb rising costs associated with utility charges, municipal
rates and other charges
• No civil unrest within Cape Town, the Western Cape or South Africa.
Guidance disclaimers
Any deviations from the assumptions outlined above may impact management's forecast for the year ending
28 February 2026. The information and opinions provided have been recorded and expressed in good faith and
are based upon reliable data made available to management at the time of reporting.
No representation, warranty, undertaking or guarantee of whatsoever nature is made or given regarding the
accuracy and/or completeness of such information and/or the correctness of such opinions.
The forecast for the period ending 28 February 2026 remains the sole responsibility of the directors and has not
been reviewed or audited by Spear's independent external auditors.
4. DIVIDEND DECLARATION
The directors of the Company resolved to declare a gross interim dividend of 41.58704 cents per share from
income reserves in respect of the six months ended 31 August 2025. The dividend amount, net of South
African dividend tax of 20%, is 33.26963 cents per share for those shareholders who are not exempt from
dividend withholding tax or are not entitled to a reduced rate in terms of the applicable double-tax agreement.
The number of ordinary shares in issue at the declaration date is 414 886 976 and the income tax number
of the Company is 9068437236.
The salient dates of the dividend declaration are:
Declaration date Monday, 20 October 2025
Last day to trade cum dividend Tuesday, 4 November 2025
Trading ex-dividend commences Wednesday, 5 November 2025
Record date Friday, 7 November 2025
Date of payment Monday, 10 November 2025
Share certificates may not be dematerialised or rematerialised between Wednesday, 5 November 2025 and
Friday, 7 November 2025, both days inclusive.
In respect of dematerialised shareholders, the distributions will be transferred to the CSDP account / broker
accounts on Monday, 10 November 2025. Certificated shareholders' distribution payments will be paid to
certificated shareholders' bank accounts on Monday, 10 November 2025.
Tax implications
As Spear is a REIT, the distribution meets the definition of a 'qualifying distribution' for the purposes of
section 25BB of the Income Tax Act, No. 58 of 1962 ("Income Tax Act"). Qualifying distributions received
by South African tax residents will form part of their gross income in terms of section 10(1)(k)(i)(aa) of the
Income Tax Act. Consequently, these distributions are treated as income in the hands of the shareholders
and are not subject to dividends withholding tax. The exemption from dividends withholding tax is not
applicable to non-resident shareholders, but they may qualify for relief under a tax treaty.
South African tax residents
The dividend received by or accrued to South African tax residents must be included in the gross income of
such shareholders and will not be exempt from income tax (in terms of the exclusion to the general dividend
exception, contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax Act, because it is a dividend
distributed by a REIT. The dividend is exempt from dividend withholding tax in the hands of South African
tax resident shareholders, provided that the South African resident shareholders provide the following forms
to the CSDP or broker in respect of uncertificated shares, or to the company, in respect of certificated shares:
a) a declaration that the dividend is exempt from dividend tax; and
b) a written undertaking to inform the CSDP, broker or the company, should the circumstances affecting
the exemption change or the beneficial owner cease to be the beneficial owner, both in the form
prescribed by the Commissioner for the South African Revenue Service.
Shareholders are advised to contact their CSDP, broker or the company to arrange for the above-mentioned
documents to be submitted prior to payment of the dividend, if such documents have not already been
submitted.
Non-residents shareholders
Dividends received by non-resident shareholders will not be taxable as income and instead will be treated
as an ordinary dividend which is exempt from income tax in terms of the general dividend exemption in
section 10(1)(k)(i) of the Income Tax Act. It should be noted that up to 31 December 2013, dividends
received by non-residents from a REIT were not subject to dividend withholding tax. Since 1 January 2014,
any dividend received by a non-resident from a REIT will be subject to dividend withholding tax at 20%,
unless the rate is reduced in terms of any applicable agreement for the avoidance of double taxation ("DTA")
between South Africa and the country of residence of the shareholder concerned.
Assuming dividend withholding tax will be withheld at a rate of 20%, the net dividend amount due to non-
resident shareholders is 33.26963 cents per share. A reduced dividend withholding rate in terms of the
applicable DTA may only be relied on if the non-resident shareholder has provided the following form to their
CSDP or broker in respect of uncertificated shares, or the company, in respect of certificated shares:
a) a declaration that the dividend is subject to a reduced rate as a result of the application of DTA; and
b) a written undertaking to inform their CSDP, broker or the company, should the circumstances affecting
the reduced rate change or the beneficial owner cease to be the beneficial owner, both in the form
prescribed by the Commissioner for the South African Revenue Service.
Non-resident shareholders are advised to contact their CSDP, broker or company to arrange for the above-
mentioned documents to be submitted prior to payment of the dividend, if such documents have not already
been submitted.
Holders of uncertificated shares must ensure that they have verified their residence status with their CSDP
or broker. Holders of certificated shares will be asked to complete a declaration to the company.
5. DIRECTORS' RESPONSIBILITY
This short-form announcement is the responsibility of the directors of the Company. It contains only a
summary of the information in the unaudited consolidated interim results for the six months ended 31 August
2025 ("Full Announcement") and does not contain full or complete details. The Full Announcement can be
found at:
https://senspdf.jse.co.za/documents/2025/JSE/ISSE/SEAE/SEAHY26.pdf
A copy of the Full Announcement is also available for viewing on the Company's website at
https://spearprop.co.za/pdf/investor-relations/SEAHY26.pdf. In addition, electronic copies of the Full
Announcement may be requested and obtained, at no charge, from the Company at info@spearprop.co.za.
Any investment decisions by investors and/or shareholders should be based on consideration of the Full
Announcement, as a whole.
The Company has based this short-form on information extracted from the unaudited consolidated interim
results of Spear for the six months ended 31 August 2025, which have not been reviewed or audited by the
Company's auditors. https://spearprop.co.za/investor-communications/financial-results/
6. RESULTS PRESENTATION
Shareholders are invited to view Spear's interim results presentation to be broadcasted on YouTube at
11h00 SAST today, 20 October 2025.
Presentation details:
- View and listen mode;
- Link: https://youtube.com/live/HyGoTrS6XKo?feature=share
- Presentation slides will be made available on Spear's website shortly before the broadcast of the
presentation under investor relations / financial results / presentations, at the following link:
https://spearprop.co.za/investor-communications/presentations/
- Questions may be e-mailed during the presentation to: info@spearprop.co.za
Cape Town
20 October 2025
Sponsor
PSG Capital
Date: 20-10-2025 07:05:00
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