Exterior of Islazul Shopping Centre. Madrid, Spain, that has been acquired by JSE-listed Vukile
Image: Supplied
Vukile Property Fund, the JSE-listed real estate investment fund, is buying Islazul Shopping Centre for about R5,96 billion (€318 million), marking its entry into one of Europe’s fastest-growing cities for the first time.
Islazul is being bought from Nutwood Invest, which is owned by international private equity and real estate managers Henderson Park (95%) and Eurofund (5%).
Vukile said the transaction will grow its earnings and will be fully funded by its existing cash resources. Once the deal is completed, which is expected in April 2026, subsequent to Vukile’s financial year ending on March 31, 2026, Vukile’s subsidiary Castellana Properities will hold 100% ownership of Islazul.
The acquisition of the 90,933 square metre shopping centre continues Vukile’s capital recycling strategy of buying into higher-growth Iberian shopping centres. Earlier this month, it announced the acquisition of Berceo Shopping Centre in the city of Logroño, La Rioja, for €101 million (about R1,94 billion).
The Islazul investment marks Castellana’s expansion into Madrid and strengthens its portfolio and geographic diversification. “When the opportunity arose to acquire this institutional-grade asset with attractive growth prospects in a major city that is the powerhouse of Spain’s growth, we were able to move decisively, supported by a favourable cost of capital in South Africa and rotating capital from the sale of our Spanish retail parks portfolio,” said Vukile’s CEO Laurence Rapp in a statement.
Castellana announced the sale of its retail parks portfolio in Spain earlier in February 2026, for €279 m, or R5.2bn depending on the exchange rate at the time. Madrid has strong economic fundamentals, sustained population growth, robust employment trends, and rising household incomes. The city continues to attract record-high domestic and international tourism.
The centre benefits from a catchment area that has population growth of about 10% over the past decade, ahead of the national average of 4.5%. It draws an extended reach of more than 1,9 million people within a 15-minute drive, supporting footfall of approximately 11,5 million visits per annum and underpinning robust performance.
More than 50% of visitors arrive on foot or by public transport, indicative of how integrated the local community is with the mall of more than 180 store brands, and a new metro line stop in the area is due to open in 2027, further boosting accessibility.
Operators include Zara, Stradivarius, Lefties, and Pull&Bear, with other fashion anchors Mango and Primark. The tenant mix is enhanced by MediaMarkt, JD Sports, Homa, Milbby, and Lidl, complemented by a strong leisure and food and beverage offering with 40 establishments, including Yelmo Cines, Ilusiona, Burger King, McDonald’s, Tony Roma’s, and Foster’s Hollywood.
The centre is expected to benefit from integration into Castellana’s retail specialist asset management platform, with €23m of value-added projects have already been identified, scoped, and approved for the centre.
Vukile’s share price slipped 0,04% to R17,65 on the JSE by mid-Friday, a price that had risen by 43% over 12 months. Today, around two-thirds of Vukile’s assets and net property income is generated in Spain and Portugal, and it has grown to become the third largest South African REIT.
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