How Izak Petersen has positioned one of South Africa’s most agile REITs to deliver sustainable returns, community value, and sector leadership.

In an industry often characterised by cyclical pressures, policy uncertainty, and fluctuating investor sentiment, Dipula Properties (JSE: DIB) has quietly — and consistently — exceeded expectations. For the year ending 31 August 2025, the diversified South African REIT delivered another solid performance marked by distributable earnings growth, selective expansion, operational excellence, and a clear commitment to capital discipline.

CEO Izak Petersen describes the year as “proof that a clear strategy, rigorous execution, and an experienced team can overcome even a volatile environment.”
“We’ve built one of the most efficient portfolios in the market, and our cost ratios compare favourably with the top three players in the sector,” Petersen says. “Our balance sheet is strong, our earnings growth is sustainable, and we’ve kept our capital allocation focused on areas where we can still make a difference.”

Delivering consistent financial strength
Dipula’s distributable earnings increased 5% to 57.26 cents per share, marking another year of positive momentum despite a sluggish macroeconomic backdrop. The company’s property portfolio grew in like-for-like value by 6% to R10.8 billion, while net asset value (NAV) advanced 7.5% year-on-year.

Revenue (excluding straight-lining) increased by 4% to R1.517 billion, supported by a 3% growth in net property income. Cost management continues to support the business, with the total cost-to-income ratio rising slightly from 42.6% to 43.2% amid inflationary pressures, while administrative expenses remained well below 4% of income.

These metrics position Dipula as one of the leanest and most efficiently managed funds in the South African REIT sector — a deliberate result of nearly a decade of disciplined portfolio consolidation and operational refinement.

“We’ve always believed that scale should never come at the expense of efficiency,” Petersen notes. “Our aim is not to own the most properties, but the right ones — those that consistently generate income, support community needs, and can be actively managed for long-term performance.”

Retail: The beating heart of Dipula’s Portfolio
Accounting for 67% of total income, Dipula’s retail assets remain the cornerstone of its strategy. The company’s retail philosophy is straightforward yet sharply defined: focus on appropriately sized, convenience-oriented centres that cater to everyday needs in underserved urban, township, and peri-urban markets.

These are typically single-level centres between 10,000m² and 50,000m², strategically located near transport hubs, schools, and civic nodes. They feature essential retail anchors — grocery stores, pharmacies, financial services, and quick-service restaurants — catering to high-frequency, non-discretionary spending.

“Retail has been a bright spot for us,” says Petersen. “As interest rates start to ease, consumers have a little more breathing room. That extra disposable income tends to flow straight into our centres. It’s a pattern we’ve seen consistently: when people have a bit more money in their pockets, they shop locally — and that drives our tenants’ sales and our rental growth.”

The results are evident. Retail vacancies decreased to 5% in FY25, significantly below market averages, supported by strong tenant retention and positive lease reversion on renewals. Across the portfolio, Dipula achieved a weighted average renewal rental rate of +0.6%, a notable recovery from –9.7% the previous year.

“We’re not chasing the glamour of super-regional malls,” Petersen explains. “Our sweet spot is the community and convenience space — where assets are simpler to operate, less capital-intensive, and generate stable footfall. These are properties you can really manage — you can touch, feel, and influence performance on the ground.”

Strategic expansion: Selectivity over size
For Dipula, growth has never been about accumulation — it’s about alignment. The company resumed acquisitive activity in 2025, completing five strategic property acquisitions valued at approximately R700 million, which was partly funded by an oversubscribed R550 million equity raise in September.

At an average yield of 10%, these acquisitions enhance Dipula’s exposure to high-quality, income-generating assets in both retail and logistics.

The standout transaction was the R480 million acquisition of Protea Gardens Mall in Soweto, a 24,000m² community centre anchored by over 70% national retailers. The asset embodies Dipula’s township retail thesis — resilient trading, low tenant churn, and embedded demographic growth.
Two further retail properties, acquired to deepen the company’s footprint in key Gauteng sub-markets, round out the retail expansion strategy.

On the industrial front, Dipula acquired a 16,000m² distribution centre in Klerksdorp, leased long-term to multinational Bayer, and Airborne Industrial Park — a 6,964m², fully let logistics complex near OR Tambo International Airport.

“These acquisitions tick every box: strong tenants, good covenants, and the ability to scale value through active asset management,” says Petersen. “We prefer mid-sized assets that give us flexibility. It’s not about chasing yield alone; it’s about sustainable value creation.”

Recycling capital and optimising the core
Dipula’s capital recycling engine continued to operate efficiently during FY25. The company disposed of R200 million worth of non-core properties, a significant increase from R37 million the previous year. Proceeds were redeployed into value-enhancing refurbishments, redevelopment projects, and sustainability initiatives, with R214 million invested in capital improvements — a 37% year-on-year increase.

This hands-on, iterative approach is central to Petersen’s leadership philosophy.

“Active management is the key difference in our sector,” he explains. “We’ve deliberately concentrated the portfolio into fewer, larger assets that produce stronger, more predictable cash flows. The result is higher average property values, better income distribution, and operational simplicity.”
The group also completed Energy Performance Certificates (EPCs) for all qualifying buildings, supporting transparency and adherence to new sustainability standards.

Financial discipline and debt management
Dipula’s balance sheet remains robust, with gearing reduced to 34.9% (FY24: 35.7%) and post-year-end gearing falling further to 29%. The company maintains an interest cover ratio (ICR) of 2.8 times, comfortably above covenant levels.

Petersen notes that maintaining a balanced funding structure is central to Dipula’s strategy.
“We want a good mix between bank facilities and bond market funding,” he says. “That reduces concentration risk and gives us the flexibility to manage maturities more evenly. We haven’t issued our debut corporate bond yet, but it’s firmly on our radar.”

By maintaining conservative gearing and healthy cash generation, Dipula avoids the liquidity pressures that have constrained several of its peers in recent years. Petersen credits this prudence to “a culture that values resilience over reach.”

Sustainability and ESG: Laying the foundations for a greener future
Dipula has begun transforming its environmental impact, achieving measurable progress. In FY25, the group invested R54 million in solar PV installations, increasing total installed capacity to 6 MWp, with an additional 10 MWp of projects scheduled for completion in Q1 2026. These investments have already yielded tangible results:

Emissions avoidance increased by 240% year-on-year.
Green energy use more than doubled, rising from 2% to 5% of portfolio consumption.
Waste management and water efficiency projects have been launched across multiple assets.
“We’re serious about sustainability,” says Petersen. “This isn’t just a compliance exercise — it’s about cost efficiency, energy resilience, and community benefit. Our solar rollout directly supports tenants by reducing operating costs and enhancing property competitiveness.”

The company also directs resources into employee training, community upliftment, and social partnerships, aligning ESG results with Dipula’s long-term business strategy.
“As a proudly South African business, we draw strength from our people,” Petersen says. “They’re incredibly resourceful and resilient — they see opportunity where others see limitation. That spirit is embedded in our DNA.”

Industrial and office segments: Stability and adaptation
While retail remains dominant, Dipula’s industrial portfolio — contributing 13% of income — continues to deliver robust, stable performance, supported by the logistics demand curve and nearshoring trends. Petersen says the company will keep focusing on distribution centres between 10,000m² and 25,000m², leased to multiple tenants to reduce risk.

“We prefer smaller DCs with a diversified tenant base,” he explains. “It’s a sweet spot that balances yield, liquidity, and flexibility — if one tenant vacates, the impact is manageable.”
The office portfolio, comprising 16% of income, remains the most challenging segment amid elevated vacancy levels, but Petersen sees recovery potential.

“We’re not putting new money into offices right now,” he admits, “but we’re optimising what we have. That means leasing up vacant space, repurposing where feasible, and maintaining performance until fundamentals improve.”

Recognition: The best-performing RIET in South Africa
Dipula’s consistent performance and shareholder value creation earned it the top position in the 2025 Sunday Times Top 100 Companies Awards — a recognition based solely on financial merit.
Between August 2020 and August 2025, Dipula achieved a compound annual growth rate (CAGR) of 57%, resulting in a total return of 854% over five years.

This means that R10,000 invested in Dipula five years ago is now worth R95,424, underscoring the REIT’s extraordinary ability to compound value through disciplined management and resilient cash flows.

“This recognition is a credit to every member of the Dipula team,” says Petersen. “It shows that consistency, not flashiness, creates real value. We’ve proven that a focused, well-run mid-tier REIT can deliver world-class returns.”

Looking ahead: Resilience, recovery, and renewal
Dipula expects distributable earnings to increase by a further 7% in FY2026, supported by strengthening property fundamentals, lower inflation, and expected interest rate reductions. The company also highlights improved electricity stability and early signs of renewed business confidence as indicators of recovery.

However, Petersen remains pragmatic about the broader landscape. “We remain optimistic about South Africa and the property sector’s outlook, while being realistic about the challenges we face,” he cautions. “The biggest headwinds remain local government inefficiencies, poor service delivery, and slow municipal approvals. If those constraints ease, we could see a genuine acceleration in real estate growth.”

He emphasises that Dipula’s strategy — built on defensive retail, selective industrial exposure, sustainability integration, and strict capital discipline — position the company well for the next phase of market evolution.
positions“We’ve created a strong, cash-generative platform with no need for rescue financing,” Petersen concludes. “Even after the share’s strong performance, we still see upside. The business is well diversified, our earnings are repeatable, and our portfolio can perform sustainably over the next decade.”
A blueprint for mid-tier REIT excellence
At a time when many listed property companies are consolidating or retrenching, Dipula’s story stands as a blueprint for how a focused, community-anchored, and operationally disciplined REIT can thrive in South Africa’s dynamic landscape.

Through consistent execution, cautious ambition, and a profound understanding of its markets, Dipula has evolved from a mid-sized income fund into one of the country’s most efficient and strategically aligned real estate platforms.

As Petersen states: “Ours is a story of discipline and determination — of doing the small things right, every day. That’s how we’ve built lasting value, and that’s how we’ll keep growing — one strong, sustainable asset at a time.”