Dipula Income Trust has expressed strong confidence in the ongoing recovery of South Africa’s real estate market, citing recent improvements that have helped lift its distributable earnings by 5% for the year ending August 2025. The Johannesburg-listed real estate investment trust highlighted a meaningful upturn in sector performance over recent months, with potential for further acceleration provided local government inefficiencies are tackled effectively.
Headline earnings per share reached 53.08 cents, while total profit and income attributable to equity holders climbed to R931.9 million. Revenue expanded to R1.51 billion, with net profit before finance costs amounting to R1.3 billion. Distributable earnings per share rose to 57.26 cents, underpinned by a modest yet positive weighted average rental renewal rate of 0.6%. The group secured new and renewed leases totalling R801 million, ensuring stable future income streams.
Looking ahead, Dipula anticipates a 7% increase in distributable earnings for the 2026 financial year, according to its latest results announcement today. Vacancies edged up to 8.5% from 7.5%, primarily due to temporary movements in sought-after office and industrial spaces. The cost-to-income ratio ticked higher to 43.2% amid inflationary pressures on property expenses, but gearing improved to 34.9%, with an interest cover ratio of 2.8 times. Post year-end, gearing fell further to 29%, while net asset value grew 7.5% on brighter income prospects.
Strategic disposals of non-core assets generated R200 million, proceeds from which reduced debt and funded value-enhancing projects. Advanced negotiations continue for the sale of residential units, representing just 4% of income, where vacancies halved from 12% to 6%. This will sharpen focus on core retail and industrial holdings in rural and township areas.
Capital expenditure reached R214 million on refurbishments and redevelopments, with another R170 million earmarked for 2026 to upgrade key properties. Notable investments include R8.5 million spent revamping Kroonstad Circle in the Free State. In August, Dipula sealed five acquisitions worth R700 million, including the R480 million Protea Gardens Mall in Soweto, bolstering everyday retail access for communities.
Further additions comprised a 16,000 square metre distribution centre in Klerksdorp leased to Bayer and the fully occupied 6,964 square metre Airborne Industrial Park near OR Tambo International Airport. These deals, partly financed by an oversubscribed R550 million equity raise in September, align with Dipula’s strategy to prioritise high-quality mid-sized logistics and industrial assets.
With lower interest rates and easing loadshedding supporting tenant demand, the REIT’s active management approach positions it well for sustained growth. Dipula’s emphasis on defensive retail and industrial segments reflects broader market shifts towards resilient property classes amid South Africa’s gradual economic rebound. The group’s disciplined capital recycling and debt reduction underscore a prudent path forward in an improving yet challenging environment.