JSE-listed real estate investment trust Fairvest CEO Darren Wilder says the company is making consistent progress in repositioning itself as a retail-focused portfolio through the disposal of noncore assets and strategic acquisitions to enhance long-term earnings visibility and sustainability.

For the six months to March 31, it declared a distribution per A share of 71.82c, up from 69.66c for the six-month period to March 31, 2025, and a distribution per B share of 25.94c, up from 23.10c per B share in the 2025 interim period.

More than 70% of its revenue is generated from retail properties. During the period under review, the portfolio continued to benefit from the disciplined execution of property fundamentals, including vacancies remaining consistently low, tenant quality and rental reversions improving, and the portfolio remaining operationally robust.

Further, like-for-like net property income during the six-month period increased by 8% year-on-year. It also reports positive letting activity, with 240 new deals and 210 renewals concluded over the six months. The new deal weighted average lease expiry (Wale) was 44.4 months.

Additionally, positive rental reversions continued to improve to 5.7%, up from 4.8% in the prior comparable period.

The weighted average lease escalation across the portfolio remained stable at 6.7%, with a Wale of 29.4 months. Vacancies increased to 5.1%, up from 4.1% in the six months to end March 2025, and tenant retention was 83.8%.

During the period under review, 147 new leases were concluded in the retail portfolio, totalling 27 017 m². The office portfolio’s average gross rental on new deals concluded was at R140.64-million, up from R114.95-million in the prior financial year interim period, with a Wale of 52 months.

The industrial portfolio saw a jump in positive rental reversions of 8.4% on renewals compared with 6.8% at year-end.

Fairvest continues to exercise strict control over its expenses, with 6.3% for the period, which was largely driven by additional properties acquired, says Wilder.

Meanwhile, the company disposed of one commercial property during the period valued at R65-million in Goodwood, in the Western Cape. It is in the process of acquiring two malls owned by the Muller Group, the Jozini Mall and the Tugela Ferry Mall, in KwaZulu-Natal, for R700.4-million.

Fairvest’s medium-term strategy is to dispose of noncore assets and recycle the proceeds into rural and non-metropolitan retail properties that serve previously underserved markets and are strategically close to commuter nodes and transport interchanges.

It continued to invest in its property portfolio, with total capital expenditure of R126.9-million incurred during the period under review, of which R18.4-million relates to further investments in solar initiatives.

It continued to invest in renewable energy, and increased the number of solar plants to 54, with a total installed capacity of 23.8 MW. These solar plants generated 17.5% of the combined portfolio's electricity needs during the period under review. The value of renewable energy produced amounted to R40.2-million.

A further 13 plants are currently undergoing assessments, approvals and implementation, which will add 3.9 MW of capacity.

Overall, 46.4% of the portfolio's gross leasable area has access to either partial or full backup power.

Additionally, water management is a key priority for Fairvest, with several projects aimed at improving water management and conservation, including 25 operational groundwater harvesting plants, which account for 14.9% of total water consumption.

The company has also installed 36 smart monitoring devices to facilitate early leak detection. In areas where groundwater harvesting is not feasible, it has have set up ten backup water plants.

For the period under review, outstanding loans amounted to R4.3-billion, up from R3.9-billion at the end of September 2025. After accounting for cash and cash equivalents, this increased its loan-to-value (LTV) ratio to 26.6%, up from 25.6% at its financial year-end.

Further, its weighted average cost of debt at the end of the period improved to 8.76%, down from 9.05% at end September 2025, and the weighted average maturity of the loans is 2.1 years.

Fairvest remains compliant with the group and portfolio LTV covenants, and its interest cover ratio is at least 4-times, which is significantly exceeding the minimum requirement of two times set by its funders.

It had R926.7-million in cash on hand and undrawn debt facilities available for growth initiatives at the end of March 2026.

“The group’s portfolio continues to demonstrate resilient operating performance, supported by low vacancies, disciplined asset management and stable rental growth. While the macroeconomic environment has become more uncertain, solid property fundamentals, combined with conservative balance sheet management, position us for sustained growth,” Wilder says.

The company also updated its full-year guidance, owing to the strong operational performance and the positive contribution from recent accretive transactions. It expects distributable earnings per B share for the 2026 financial year to be between 53.4c and 54.4c, which is an increase of between 11% and 13%, up from 48.15c a share at the end of its 2025 financial year.

Distribution per A share will increase by the lesser of 5% or the most recent Consumer Price Index.

Further, during the period, fibre infrastructure company and Fairvest subsidiary Onepath invested an additional R667.4-million in township fibre network infrastructure, which brings its total investment to date to R1.2-billion, of which Fairvest contributed R693.8-million.

The fibre infrastructure is leased to a fibre network operator that provides high-quality Internet access to township homes and communities.

The rental income generated from this arrangement offers an accretive dividend yield for Fairvest. This investment also grants Fairvest valuable access to information and insights that benefit both its current retail portfolio and potential new retail opportunities.

By promoting digital inclusion in underserved communities, the initiative fosters opportunities for education, employment, entrepreneurship, and entertainment. As these communities thrive, it further enhances Fairvest’s core retail market, Wilder notes.

The total dividend received from Onepath for the period rose significantly to R37.8-million, up from R3-million as at March 31, 2025.

After the interim period, Fairvest raised R900-million through a bookbuild, which will be used to partially settle the purchase consideration for the Muller Group acquisition, to fund ongoing investment in Onepath, and to reduce debt in anticipation of pending asset transfers.