Quintin Rossi
Spear REIT
CEO
Spear Reit, the sole Western Cape specialist listed on the JSE, reported strong financial results for the first half of 2025. Despite operating in a high-interest-rate environment, the company’s distributable income per share grew by 2.05%, and its dividend per share increased by 3.14%, declaring a dividend of 39.53 cents. The company maintains a 95% payout ratio, surpassing the 75% mandatory for Reits, appealing to pension fund investors focused on stable returns.
Spear’s CEO, Quintin Rossi, emphasized its commitment to the Western Cape, attributing its success to the region’s appealing business environment and infrastructure investments. Cape Town’s continued development and favourable unemployment rates make it attractive for investors. Rossi highlighted the positive impact of political changes and infrastructure improvements on investment confidence.
For the period, Spear achieved a 6.34% increase in group revenue due to strong leasing activities, reduced vacancies, and steady in-force escalations. Despite challenges from inclement weather leading to higher repair costs, profitability remained stable.
The company’s occupancy rate increased to 95%, with office spaces particularly thriving. Effective marketing strategies helped reduce overall vacancy rates. Spear’s balance sheet is robust, with gearing reduced to 23.93% after asset disposals, enhancing liquidity for future investments. Rental collections remained strong at 98.05%.
Analysts, including Nesi Chetty from Stanlib, praised Spear’s performance and its growing appeal within property funds. Despite some size constraints for institutional investors, Spear continues to attract interest due to its strategic focus on the Western Cape. It recently integrated a new real estate portfolio from Emira Property Fund, boosting its portfolio value to R5.36bn.
Spear forecasts distributable income per share growth between 2% and 4% for the full year, supported by assumptions of no load-shedding, reduced vacancies, and stable tenant performance. Independent analyst Keillen Ndlovu also recognizes Spear’s strategic niche in the Western Cape, highlighting management’s careful portfolio expansion.
Overall, Spear is well-positioned to continue delivering value due to its high-quality assets, strong tenant relationships, and proactive asset management.