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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”)
AUDITED FINANCIAL RESULTS AND DIVIDEND DECLARATION FOR THE YEAR ENDED 28 FEBRUARY
2025
1. SALIENT FEATURES
FY2025 FY2024 Variance
Distributable
income per
share cents 85.55 82.99 3.08%
Distribution
per share cents 81.27 78.86 3.06%
Pay-out ratio % 95.00 95.09 -*
Total
distributable
income R'000 252,003 200,805 25.50%
Tangible net
asset value
per share R 12.20 11.78 3.57%
Revenue
excluding
smoothing R'000 681,704 608,141 12.10%
Revenue
including
smoothing R'000 691,453 619,404 11.63%
Basic earnings
per share cents 183.41 161.57 13.52%
Headline
earnings per
share cents 86.63 82.78 4.65%
Loan to value % 27.09 31.64 -*
Interest cover
ratio Times 3.34 2.28 -*
SA REIT Cost
to Income % 44.37 43.69 -*
SA REIT
Administrative
cost to income % 6.78 6.00 -*
Weighted
average cost
of debt % 9.08 9.48 -*
Weighted
average cost
of variable
debt % 9.29 10.16 -*
Weighted
average cost
of fixed debt % 9.01 8.55 -*
Fixed debt
ratio % 77.53 47.24 -*
Weighted
Average
expiry of debt Months 25.97 24.67 -*
Number of net
shares in
issue ‘000 320,400 260,086 -*
*Note: % variance is not applicable
2. KEY FINANCIAL HIGHLIGHTS
Commercial Development
Industrial Office Retail Land FY25 Total FY24 Total
Number of
properties 14 17 8 - 39 29
Value of
properties
(R'000) 2,139,884 2,345,160 978,077 69,146 5,532,267 4,628,065
Value % 39% 42% 18% 1% 100% 100%
Property
revenue excl
smoothing
(R'000) 279,379 287,430 114,895 - 681,704 608,141
Revenue % 40.99% 42.16% 16.85% 0.00% 100% 100%
GLA m² 304,310 127,548 55,560 - 487,418 426,542
GLA % 62.43% 26.17% 11.40% 0.00% 100% 100%
Vacant area
m² 3,504 8,938 2,193 - 14,634 29,351
Vacancy per
sector % 1.15% 7.01% 3.95% 0.00% - -
Vacancy on
total GLA % 0.72% 1.83% 0.45% 0.00% 3.00% 6.88%
Reversion %
YTD 1.13% -3.17% 8.53% 0.00% 4.18% -0.37%
Weighted
average in-
force
escalation % 7.30% 7.29% 7.25% 0.00% 7.27% 7.52%
Weighted
average
lease expiry
(months) 22.76 26.05 23.98 - 24.58 25.94
3. CEO COMMENTARY
Reflecting on the entirety of FY2025, particularly its final six months, we are deeply grateful for the challenges
we faced and the many successes we achieved. South Africa emerged stronger, Spear triumphed, demonstrating
resilience, and our business concluded a truly transformative transaction, that has positioned the company firmly
on a clear trajectory for strategic growth. Our focus on operational imperatives yielded tangible results, as
evidenced by consistent improvement across key performance indicators. A standout achievement was Spear’s
occupancy rate, which demonstrated steady growth quarter after quarter. This momentum was driven by strong
leasing momentum and tenant demand surpassing supply, culminating in an impressive 97% occupancy rate by
the end of the reporting period.
Spear’s mission statement is more than an abstract ideal; it is a guiding principle that the Spear team has
consistently, credibly, and reliably upheld throughout FY2025, despite the challenges within the operating
environment. Our strategic focus on the Western Cape, coupled with the ongoing diversification of our real estate
portfolio has yielded outcomes that align with our long-term objectives. Furthermore, our hands-on approach to
asset and property management remains the foundation of our success, enabling a seamless transition from one
successful financial year to the next.
FY2025 can be summarised as follows:
• Completion of a R1.146 billion transformative transaction ahead of schedule and under budget.
• Asset value growth of over 19.54% compared to FY2024.
• Market capitalisation increase of R1 billion, reaching R 3.3 billion.
• Remarkable improvement in occupancy rates to 97%, representing a 388bps increase from FY2024
across the core portfolio.
• Loadshedding relief, boosting solar PV portfolio performance.
• Positive rental reversion prints of 4.18% on a portfolio level in FY2025.
• 27.09% LTV with an ICR exceeding three times, supported by a debt portfolio benefiting from lower cost
of debt.
In FY2025, Spear successfully achieved a distributable income per share (DIPS) of 85.55 cents, and a total
distribution per share (DPS) of 81.27 cents, marking increases of 3.08% and 3.06%, respectively, compared to
FY2024. Rental collections remained consistent at 98.59% for the year. The board approved a payout ratio of
95% for the final six months, resulting in an annualised average payout ratio of 95% for FY2025.
The trading environment remains constrained and unpredictable, with challenges such as intermittent
loadshedding, crime and a dangerously high unemployment rate, continuing to exert pressure on South Africa’s
appeal to investors and the country’s financial resources. Despite these obstacles, the South African-listed
property sector has shown strong signs of recovery, outperforming bonds, equities and cash for two consecutive
years. This recovery has been bolstered by a declining interest rate environment, providing much- needed relief
to income statements across the board. Encouragingly, the Western Cape Provincial Government and Local
Authorities have shown remarkable focus and intent in driving economic growth and job creation within the
province. Their efforts have resulted in the largest infrastructure investment allocations in the Cape Metro, further
strengthening job creation and economic growth in the region.
Sectoral performance
The core portfolio demonstrated resilient trading throughout a year marked by uncertainty, optimism, declining
inflation, reduced debt costs, and reliable energy supply. These conditions contributed to improved key
performance indicators, making FY2025 the strongest overall core portfolio performance in Spear’s post Covid-
19 journey.
Spear’s asset management and leasing teams capitalised on the positive momentum across the Western Cape,
taking full advantage of improved market conditions. This proactive approach resulted in higher occupancy rates
across all portfolio asset types.
Industrial portfolio
Spear's industrial portfolio demonstrated consistent performance throughout FY2025, attributed to its well-
diversified nature and prime locations. The portfolio maintained high occupancy rates, ending the period at
98,85%. The robust in-force escalation of 7.30% compounding annually, further bolstered sustainable cashflows
and asset value growth within the portfolio.
The industrial portfolio features a diverse mix of multi-let industrial spaces, warehouses, logistics parks, and
urban logistics facilities. It accounts for 63% of the total group GLA and 39% of the total group asset value.
Spear’s industrial assets are defined by their efficient operational areas, ample yard space, solar PV installations,
and prime locations that connect seamlessly to Cape Town’s major routes. Recent trends such as onshoring and
near-shoring, local manufacturing, and efforts to mitigate supply chain disruptions have contributed to increased
tenant demand. This has driven rental growth; occupancy increases and longer lease terms.
The industrial portfolio maintained a strong rental collection profile, with 98.69% of rentals collected during the
year. Additionally, 42 365m2 of industrial GLA was renewed or relet over the year, achieving an average positive
rental reversion rate of 1.13%.
Retail portfolio
Spear's retail assets have consistently delivered results in line with forecasts, maintaining performance within
management’s expectations despite challenging consumer conditions driven by high interest rates and cost-price
inflation.
Management remains committed to pursuing retail growth opportunities as suitable investment-grade prospects
arise, provided they meet Spear’s investment criteria. Spear’s retail investment strategy continues to focus on
convenience and destination retail real estate assets that serve a broad range of LSM groups.
Spear’s retail assets maintained strong performance throughout FY2025, achieving high occupancy rates of
96.05% and generating reliable cashflows. During the year, 9,622 m² of retail GLA was renewed or relet, resulting
in a positive rental reversion rate of 8.53% and robust in-force average escalations of 7.25%.
The retail portfolio remains defensively positioned, supported by prime locations and a diverse tenant mix,
mitigating credit risk in a challenging trading environment. National tenants occupy 40% of Spear’s retail portfolio
by GLA under long-dated leases with excellent payment records, ensuring stability.
FY2025 also marked the addition of two medical retail assets to the core portfolio, underpinned by long-term
lease agreements with Intercare and Clicks Group Limited. These additions further enhance Spear’s growing
retail portfolio.
Commercial portfolio
FY2025 witnessed a noteworthy revival within the Western Cape commercial office sector recovery narrative.
Spear’s commercial portfolio benefited significantly from the constrained supply of high-quality office space in the
Cape Metropolitan area. Despite favourable demand and supply dynamics, new development activity remained
slow as developers hesitated to take on development risk, a trend that positions the portfolio well for rental growth
in the coming year.
Occupancy levels showed a marked improvement to 92.99% at year-end compared to 84.37% in FY2024. In
FY2025 41 972m2 of commercial GLA was renewed and relet, which resulted in a marginal negative rental
reversion of -3.17%, and strong in-force average escalations of 7.24%.
Spear’s commercial assets are strategically situated in highly sought-after locations, equipped with sufficient
back-up power generation capacity, and generous parking ratios. These features, combined with attractive lease
terms, have been instrumental in driving the increased letting momentum observed during FY2025 .
Outlook and Guidance
Spear remains committed to its Western Cape-focused strategy, leveraging deep regional
expertise and an active hands-on management approach to seize portfolio and earnings enhancing
opportunities.
Based on Spear’s strategy-driven operational and financial outcomes and the information
available to management at the FY2025 full-year reporting date, management forecasts an
FY2026 DIPS growth of between 4% – 6% compared to FY2025. The payout ratio is expected to
remain at 95% as approved by the Board of Directors.
Guidance assumptions
Spear’s FY2026 guidance is informed and influenced by the following key assumptions:
- No loadshedding occurs for the remainder of FY2026
- Vacancies are reduced in accordance with management’s forecast
- Lease renewals are successfully concluded as per management’s projections
- No major tenant failures occur during the period
- Tenants continue to successfully absorb rising costs associated with utility charges, municipal rates and
other expenses
- SARB repo rate reduction of 0.25% is implemented for the balance of FY2026
- No civil unrest arises in 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 final dividend of 41.74153 cents per share from
income reserves in respect of the six months ended 28 February 2025. The dividend amount, net of South
African dividend tax of 20%, is 33.39322 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 339 986 976 and the income tax number
of the Company is 9068437236.
The salient dates of the dividend declaration are:
Declaration date Thursday, 22 May 2025
Last day to trade cum dividend Tuesday, 10 June 2025
Trading ex-dividend commences Wednesday, 11 June 2025
Record date Friday, 13 June 2025
Date of payment Tuesday, 17 June 2025
Share certificates may not be dematerialised or rematerialised between Wednesday, 11 June 2025 and
Friday, 13 June 2025, both days inclusive.
In respect of dematerialised shareholders, the distributions will be transferred to the Central Securities
Depository Participant (“CSDP”) or broker accounts on Tuesday, 17 June 2025. Certified shareholders’
distribution payments will be paid to certified shareholders bank accounts on Tuesday, 17 June 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 33.39322 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 announcement is the responsibility of the directors of the Company. It contains only a summary of the
information in the audited annual consolidated financial statements for the year ended
28 February 2025 (“Full AFS”) and does not contain full or complete details. The Full AFS can be found at:
https://senspdf.jse.co.za/documents/2025/JSE/ISSE/SEAE/SEAFY25.pdf
A copy of the Full AFS is also available for viewing on the Company’s website at
https://spearprop.co.za/pdf/investor-relations/SEAFY25.pdf . In addition, electronic copies of the Full AFS
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
AFS, as a whole.
The Company has based this announcement on information extracted from the audited consolidated
financial statements of Spear for the year ended 28 February 2025. BDO South Africa Inc., the Company’s
external auditor, expressed an unmodified audit opinion on the audited consolidated financial statements in
their report dated 16 May 2025. The full audited annual consolidated financial statements are available on
the Company’s website at https://spearprop.co.za/investor-communications/financial-results/
6. RESULTS PRESENTATION
Shareholders are invited to view Spear’s annual results presentation to be broadcasted on YouTube at
11h00 SAST today, 22 May 2025.
Presentation details:
- View and listen mode;
- Link: https://youtube.com/live/l5MMw6LJ5FQ?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
22 May 2025
Sponsor
PSG Capital
