Vukile Property Fund has sold its Spanish retail parks portfolio. As a result, the company is sharpening its focus on higher-growth shopping centres in Spain and Portugal.
Its subsidiary, Castellana Properties, signed a deal to sell the assets for €279 million (about R5.3 billion) in cash. Specifically, the buyer is Ferrel SPV 2025—a vehicle owned by funds managed by Ares Management Corporation. Notably, Ares is a global investment firm listed on the New York Stock Exchange.
This move follows closely after Vukile acquired a 35% stake in Pradera Limited. Pradera is a specialist retail property investor with a 25-year track record across Europe, the UK, China, and the Middle East. Moreover, Castellana’s CEO, Alfonso Brunet, worked at Pradera for 11 years before joining Castellana in 2017—which underscores the strong ties between the two firms.
Vukile will redeploy the sale proceeds into shopping centre investments. In addition, it will use existing cash—including R2.65 billion raised in October 2025. These funds will support value-add projects already in the pipeline. Importantly, all are at an advanced stage.
Castellana bought the retail parks in 2017. Since then, it increased net operating income by €3.7 million (26%) through active asset management. However, market conditions have shifted significantly.
Demand for retail parks in Spain has grown sharply. Consequently, prices have risen and future returns have narrowed. In contrast, shopping centres remain scarce. Because of this, their limited supply keeps valuations attractive—especially for local experts like Castellana.
“Now is the right time to exit retail parks,” said Vukile’s directors. “Therefore, we can redirect capital to shopping centres with stronger growth potential.”
New shopping centre development in Spain faces major hurdles. Meanwhile, retail park construction continues to rise, driven by investor demand. As a result, shopping centres now offer better long-term value for specialists who understand the local market.
The portfolio sold at a 2.5% discount to its latest valuation. That said, Castellana will manage the assets for five more years. For this service, it will earn standard market fees—ensuring continuity and steady income.
Critically, the deal is value-accretive. It locks in gains from years of strong management. Net asset value grew by 13% between purchase and sale. This performance is especially impressive given tough conditions since 2017—including rising interest rates, the pandemic, and the Ukraine war.
Investors welcomed the news. Accordingly, Vukile’s share price rose 1.01% to R24.93. This marks a clear improvement from R17.57 a year earlier.
In summary, this sale reshapes Vukile Property Fund’s European strategy. By exiting mature assets and focusing on high-potential shopping centres, the company aims for sustainable, long-term growth—particularly in markets where it holds deep expertise and competitive advantage.
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