Safari Investments pays a final dividend and plans to develop more retail properties

Safari Investments (RSA) will pay out a final cash dividend of 40 cents a share for the 12 months to June 30 and is seeking access to further capital so it can shift strategy to also develop retail property.

This will bring the total dividend for the year for the REIT whose assets comprise convenience and small regional centres mainly in Gauteng, to 74 cents per share, slightly lower than 78 cents in 2024. The distribution pay-out ratio remains 100%.

Safari’s share price surged 4.9% to R7.50 in thin trade on the JSE on Friday, and the price was well up from R5.50 a year before. The company’s market capitalisation at year end had risen to R1.75bn from R1.44bn at the end of the 2024 financial year.

“The Safari team has done a sterling job this financial year. The Platz am Meer property has been sold, and two further non-core assets are up for sale. Reduced financing margins and a drop in interest rates helped the dividends grow nicely,” chairman Steven Herring said in the integrated report that was also released on Friday.

He said that the Shoprite brand had once again run away with the gold medal and was the choice retailer in their food segment of the market.

“Looking ahead, the board is considering a strategic shift in direction. Our young team is eager to return to shopping centre development, which will require access to capital,” he said.

He said that as part of this exploration, Safari’s REIT status and JSE listing were being looked at to allow for the funding of new centres.

“I am confident in our ability to strengthen and enhance the capabilities of our development team for the future,” he said.

An operating profit of R333.48 million was reported for the 12-month period, before investment revenue, fair value adjustments, and finance costs, which compares well with the R381.73m reported in the 15-month period to June 30, 2024.

Shareholders will also be pleased to know the fair value of investment properties increased by 3.74% to R4.19 billion versus R4.04bn in 2024. The current year number excludes the Platz Am Meer property, after the sale of Safari Investments Namibia on June 30, 2025.

The figure to June 30, 2024 included Platz Am Meer. The valuation increase was supported by Safari's low vacancy rate of 2.06%, with national tenants occupying 91% of the gross lettable area, and a healthy lease expiry profile, the directors said in the results.

The loan-to-value ratio decreased to 31.5% from 33%, while the SA REIT net asset value per share improved to R11.47 from R10.006.

In the integrated report, the directors said their future direction would entail considering yield-accretive new developments, acquisitions and redevelopments, the exploration of opportunities to expand existing assets where bulk reserve was available, to explore ancillary assets such as filling stations and drive-throughs, and to stay competitive in the market.

As part of the development pipeline, the refurbishment of Atlyn Shopping Centre in Atteridgeville represented a defensive capital investment for Safari to enhance the centre’s long-term performance. Works commenced in August 2024 to transform the 19-year-old property into a modern, high-performing retail destination by the second quarter of 2026.

In the Westville Gardens precinct, land had been secured in a joint venture with the owner for a mixed-use retail and residential development - the cost for Phase 1 of which was estimated at R650m.

Another development being considered was the 24 100 square metre Phudhadithaba Mall in the Free State, which would be built for an estimated R400m, on land which was jointly owned with the landowner.

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