Vukile Property Fund Limited ($VKE)

Laurence, I think we can begin and then I'll just let anybody else in who joins later.

Right. Thank you, Louise. Good. So good morning, everybody. Sorry to keep you waiting, and thank you all for joining us for our pre-close presentation for the financial year ended 31 March 2026. The numbers that we're going to go through cover 11 months actuals, so pretty much what the numbers should look like when we get to full year results. This has really been a tremendously busy period for us in the last 6 months, driven by very significant dealmaking, reshaping our portfolio and at the same time, continuing with excellent delivery of operating results. So if I look at Castellana, if we can just move to my first slide, please. If you look at Castellana, really outstanding metrics in both Spain and Portugal. Footfall is at all-time highs. The portfolio is fully occupied, and Alfonso will take us through that detail in a few slides' time. On the deal front, we really have been reshaping our portfolio. So there was the disposal of our retail park portfolio for EUR 279 million and to use those proceeds to go into higher-growth shopping centers, and those deals are now all announced. That was the acquisition of 100% of the sale in Longrono for EUR 103 million, 100% of Islazul for EUR 318 million and 50% of Splau in Barcelona for EUR 175 million. I will go through all of these in a lot more detail later in the presentation. In South Africa, we've had a tremendous performance. Itu and his team have delivered excellent results with double-digit NOI growth and a core retail vacancy sitting at 1.1%. And then we've also been very active in the South African portfolio in terms of asset rotation. So we've sold 4 non-core assets for a total of ZAR 625 million. We acquired in December 50% of Chatsworth Mall for ZAR 620 million. And then the one that we've been waiting to disclose to the market, and that was finalized only last week, as we finalized agreements to acquire 100% of Botshabelo Mall, the dominant center in the town of Botshabelo in the Free States, and that's a ZAR 443 million. Again, we'll go through more details a bit later. And then in December last year, we acquired a 35% stake in Pradera. Pradera is a leading pan-European specialist retail property fund manager and asset manager. They've got over 25 years of experience. They have EUR 5 billion under management. And this is very much a strategic deal for us because Pradera has over 100 retail specialists in the team. And therefore, that positions us very well to explore expansion into additional European markets with expert teams already on the ground. I think you know that we believe one of our key differentiators is really operating as locals on the ground. I think that gives us our edge. The fact that Pradera has got teams in markets that we are evaluating, I think, really allows us to look at those markets through a very different lens. And really that is through a lens of being local experts on the ground through those teams. So that's a very exciting development for us overall. I think before I hand over to Itu to go through the detail in South Africa, I just want to highlight a very important point that all of the above acquisitions that I've just mentioned have all been fully funded. They're all accretive and there is no cash drag. And importantly, there is no requirement for any further equity funding. All the deals we've announced are funded through the deals we've done. Again, I will take you through that in a few slides' time. But I'd like to now ask Itu to pick it up and talk through the detail of how South Africa traded in the past 6 months. Itu?

Yes. Thanks, Laurence. Yes, good morning, everyone. It really does give me a great pleasure to provide the trading update for South Africa over the past year. Chad, if you can go to the first slide, thank you. Yes, the portfolio is projected to grow NOI by 10.1% on a like-for-like basis. So really excited with that print. This growth has effectively been driven by our deliberate focus on margin improvement. And as we've spoken in the past, the cost-saving strategies that we executed on in the portfolio. So these strategies have pretty much been really driving targeted growth around improving the quality of our occupancy. We spent quite a bit of time looking to improve our recovery management. We've executed on additional PV. So that's driven PV margin and a significant focus on optimizing our metering to ensure that both water and electricity are recovered adequately throughout the portfolio. So really happy with the net operating income. And our sense is that figure is sustainable into the next [ LOA ]. At a trading density level, we continue to grow our annualized trading densities within our portfolio, up at 5.1% in the past year. We've also seen growth across all of the segments, which I'll touch on a bit later on in the presentation. At a vacancy level, we continue to have vacancies well managed. Overall, our vacancies are sitting at 1.7%. But if one excludes kind of the 3 retail offices that we have and just focuses only on the retail offering, our vacancies are sitting at 1.1%. And although it looks like when you're looking at the slide and you're comparing March '25 to February '26, it seems like there hasn't been much movement. We've done a significant amount of deals on both the renewal and new deal front, doing deals that equates to about 20% of our GLA. I'm proud of our rural vacancies as well as our township portfolio vacancies that are pretty much fully let at 0.4% and 0.8%, respectively. But we've also seen strong performance and high absorption in the urban and commuter centers. Those are now sitting at 2% and 1.5%, respectively. At a reversion level, our reversions on renewal rentals is up from 2.4% to 3.5%. Our cost-to-income ratio continues to improve, really show improvement from 15.3% down to 12.4% as at Feb 2026. Our effort rates continue to be low at 6.1%. So when one considers the positive trade that we've seen in the portfolio, the high retention ratios as well as the low vacancies, all of this really points to a trajectory of growing top line and a strong performance in the portfolio looking forward. So overall, really satisfied with the performance of the portfolio over the past 11 months in all segments and also across all of the provinces in which we have properties. And Chad, on to the next slide. So when I look at our footfall and sales in a bit more detail, the overall portfolio grew sales by 5.3%. The urban portfolio increased some by 6.3%, the rural portfolio up 5.3% and the township portfolio up 5.2%. From a trend perspective, we continue to see higher spend per head, slightly higher than historical averages, as our shoppers frequent malls slightly less, but when they do go to the malls, they shop a bit more per visit. Notwithstanding this, we've increased our promotional activity within the portfolio significantly over the past year to look to increase and drive feet. These campaigns have resulted in overall growth in terms of our footfall across all of our segments. Overall, in terms of sales and footfall, our township and rural portfolio continued to do well and operating from a high base, which we have delivered on over the past couple of years. And we've also seen a significant rebound in the commuter and urban markets. And again, these are the segments that are more sensitive to kind of interest rate relief and also higher job absorption and those are kind of the key things that we've seen over the past 6 months. Next slide. At a category trade performance, our like-for-like trading density is up at 5%. Our top 10 tenants that account for 55% of our GLA grew by 5.5%. We're so really pleased with our top 10 tenants performance. 11 out of the 14 categories that we measure within the portfolio grew both in terms of turnover and trading densities. And then particularly over the past 5 months, so if you look from our interim results up until Feb, we've seen growth in both groceries and fashion and those are the 2 biggest categories that we have within the portfolio. Groceries growing at 2.5% and our fashion category growing at 0.3%. Within these key categories, we've had winners and losers over the past 6 months. As always, in terms of how we manage the portfolio, we'll monitor the trade of both winners and losers and ensure that our effort rates remain low. We're particularly happy over the past 6 months with our men's wear as well as our fast foods and children's wear performance. We're monitoring our women's wear as well as shoes as there, you've seen a divergence between those that have done well and those that have been challenged. But overall, I think we are happy with the trade of the portfolio across all of our categories. Next slide. And lastly, moving on to our leasing activity. We continue to see strong demand for space as vacancies have now stabilized at 1.7% mark. We've had significant activity, both in terms of new deals and renewals across the portfolio. As you'll see on the bottom right-hand side of this slide, we have done deals that equate to about 150,000 square meters. So the run rate on closing deals is definitely ahead of what we've seen in the previous period. And we're also pleased with the positive rental spreads that we managed to achieve. So if we look at our new deals relative to budget, those new deals have been up by 2.6% relative to the budget that we've set. And our renewals relative to closing rentals are up by 3.5%. So yes, so majority of all the deals that we've done have really been with very strong covenants being with national tenants and our second-tier significant regional retailers. So to summarize before I hand over to Alfonso, just from a South African perspective, really happy with the portfolio, happy with the trade, happy with the growth in NOI, and also really happy with the delivery of strategic projects, particularly around PV and water. The team remains upbeat, and we're really looking forward to the next 12 months and sustaining this level of performance. So thank you very much for your attention. Now I'd like to hand over to Alfonso to take us through the Castellana update.

Thank you, Itu. Good morning, everyone. Greetings from Madrid. I'm hoping that everyone is well. Thank you for joining us on this pre-close presentation of our financial year 2026 that as Laurence has already advanced in his introduction, performance of the existing portfolio remains very strong. And the new assets acquired during the period are bringing a lot of expectations as for their quality and opportunities that we'll be deploying in the future, in the following years. Turning to our key metrics of footfall and sales directly. Our portfolio continues the trend observed over the past 5 years, maintaining a strong growth rates. The outstanding and consistent efforts made by our capable team as at the asset level are clearly marking or making a significant impact and helping us lead in most of the sector's fundamental metrics. As of February, Spain and Portugal have maintained a steady growth in footfall, increasing by 3.3% to reach an impressive total of 92.5 million visits, building on last year's record figures. All assets have surpassed previous performance benchmarks with particular attention to El Faro, which experienced a 21.3%, a year-to-date rise in footfall following the completion -- opening and consolidation of the core repurposing project, closing the year with nearly 10 million visitors. Vallsur and Bahia Sur also sustained positive progress, growing 4% and 3.1%, respectively, underlining the continued benefits of successful repositioning initiatives. Bonaire remains the only asset in the Iberian portfolio, not yet demonstrated positive footfall growth. However, trends indicate improvement and recovery to pre-storm levels is anticipated. The surrounding area has yet not fully rebound after 6 months and local residents are still working towards restoring employment and daily routines. Notably, sales show healthy growth since the centers reopening, indicating fewer visits, but higher spending per visit, resulting in elevated average ticket sizes and turnover ratios. When looking at turnovers on the rest of the portfolio, our tenant sales have grown 4.1% year-to-date until January, our last month combined. All categories growing substantially with fashion and accessories at the lead with 5.8% and F&B with 4.6%. The Spanish portfolio grew more during the period with 4.3%. However, Portugal also grew a non-despicable 3.7% coming from a higher base later last year. Next slide, please. Hectic leasing activity during this period up to January, the team has transacted 254 leasing deals, which implies transacting more than 50,000 square meters, achieving circa 3.3% growth in the rental income of the units negotiated. In Spain, 67 renewals with a positive reversion of 3%. This is excluding inflation, as I always remind because investigations will come in due course during the year. 127 new contracts with an increase of 14.3% with respect to the previous rent in those units. In Portugal, there have been 36 renewals so far resulting in a strong positive reversion of 6.6%. However, that what stands out most this period is our teams consolidation on the ground, sourcing and closing 24 new opportunities in 2 Castellana style, which led to an impressive 43.6% increase in the prior rental income of these units. Next slide. Looking at other key operating metrics, we continue to maintain market-leading results in both occupancy and rent collection rates during this period, with figures nearing 100%. These results highlight the strength and appeal of our portfolio, the outstanding efforts by our team and the stability of our tenants. All these factors contribute directly to what matters most to our shareholders, certainty and predictability in our cash flows. Now that the integration of the Portuguese portfolio is consolidated and that our teams are now at full speed managing, we have seen already a good improvement on both figures of occupancy and rent collection. I am expecting keep beating marks in the following years. So this is the Iberian update from my side that I think underlines a great result towards our year-end. Thank you very much for your attention.

Great. Alfonso, thank you very much. Itu, thank you. And again, congratulations to both you and your teams on an excellent performance, which we are exceptionally proud of. What I'd like to do is spend some time on the various deals that we've done. There have been a number of deals, and I've broken up this slide into both the sources and uses of funds to sort of really demonstrate not only what we've done but timing but also their costs as well. So let's start off on the sources of funds. In October 2025, we raised ZAR 2.65 billion through a book build process, that is a very successful book build for us. That was on an FFO yield of 8.7%, okay? We've also taken additional debt between rand and euros at the asset level in the countries and locally in SA of ZAR 1.18 billion. Then we disposed of our 9 retail parks in Spain, okay? That was at a yield of 7.1%. That deal is set to close on the 1st of April, being the beginning of FY '27. So again, we've put these numbers down. So as you're looking at your forecast, you can see what impacts '26, what impacts '27. The sale of these assets does not impact the current financial year FY '26. So for your models, from the 1st of April, you should take out the income on the retail parks. But then in addition, we are getting the management contract on managing that portfolio. So we'll lose the income on the EUR 279 million at a yield of 7.1%. And then you need to add back the management fees and that will be approximately between EUR 1 million and EUR 1.2 million that we think we'll earn on top of those numbers. So that's the sale of the assets. And I think also important for us to be able to recycle assets. Why did we do this? I think the feeling is that number one, we're probably getting into a lower growth environment in terms of the retail parks, because of the tremendous work the team have done historically and that we could take those proceeds and redeploy into higher growth assets going forward. So in other words, it's the normal win-win strategy that you've come to see and expect from Vukile over the years. In South Africa, we obviously did it with Lar Espana as well and then in terms of these retail parks. So that deal closes on the 1st of April. In South Africa, there are 4 deals that we've done. In December, we sold Midrand Ulwazi. That was the last of our big office exposures and that deal has transferred. That was for ZAR 160 million. Durban Workshop, we have agreements in place, signed agreements. That deal is expected to transfer in April 2026. So only the new financial year. That's ZAR 250 million. Mbombela Centre is expected to transfer in June 2026. And Victoria Centre expected to transfer also in June 2026. All of these deals are effectively finalized subject to Competition Commission. The sellers have got their funding in place. So when you take the 4 South African deals together, that's a yield of about 11.1% all in all. Now taking all of those sources of funds, what have we done with that money? In South Africa, we bought Chatsworth, which transferred in December 2025 for ZAR 620 million at a yield of 8.9%. You'll see that the cash-on-cash yield is pretty much the same, and that's because your cost of debt in South Africa doesn't really give an advantage relative to your cost of equity. So those figures are fairly similar. Very excited about the agreements being signed on Botshabelo. That's not only subject to Competition Commission approval, and we expect that to transfer in June 2026, buying that for ZAR 443 million at a yield of 8.5%. We'll put 40% gearing against that, and that is being bought from Liberty Two Degrees. And then we're investing another ZAR 167 million in our PV plants, which should generate around ZAR 16 million over the course of the year ahead. Then in Spain. In February 2026, we acquired 100% of Berceo for EUR 103.6 million. The NOI yield was sitting at 7.4%, cash on cash. We'll get 8.6% on that asset. That is a very exciting asset for us. For those of you that have seen Puerta Europa, I'm going to say it's a very similar kind of asset in the sense that it's completely dominant in its region. It's got a very good tenant mix, probably undermanaged by the previous private equity owners that I think really sets itself up perfectly for Alfonso and the team to come in and look to add value and grow that. There are really some exciting plans in place in terms of extending the food quarter -- is extending the food court and just generally upgrading the center. So that's a very exciting asset for us. Then we've closed the deal or rather we've signed a deal to buy Islazul. That is a dominant center in the south of Madrid, purchase price of EUR 318 million on a yield of 6.5% with a cash on cash of 8%. That is a dominant center. I think what you've seen is that as our cost of equity has improved, we've been able to recycle the money from the retail parks. We've been able to look at more dominant assets. And I think when one looks at the growth of Madrid really being the powerhouse and the engine of growth for Spain overall to get exposure in Madrid, we felt was a very important thing for the portfolio overall. And I think to get an asset of the quality of Islazul has really been superb. That deal also has value-add projects lined up in it. So I think we'll be spending about a further EUR 23 million on those value-add projects, and they should yield around 10%. So that's a very nice accretive growth strategy coming through on that particular asset. And then the one that we announced last week was buying 50% of Splau in partnership with Unibail-Rodamco, they're currently own 100% off the back of a very strong relationship that we have with them initially through buying those 4 assets a number of years ago, and then most recently doing the Bonaire deal, they approached us as sort of being a very strong trusted partner. And we had the opportunity to buy again into a dominant center in Barcelona. Just to clarify 2 things. There are rumors that we now need to fund the next 50%, people that's incorrect. They are not selling the next 50%. This is not a staggered deal. They only wanted to sell 50%, and we felt we buy that. So please do not factor into your models that this is the capital raise to buy that next 50%. And then just to clarify the pricing, that was bought on an NOI yield of 6.6%, and that will also give us around 8% in terms of cash on cash. When you look at the portfolio, the Castellana portfolio really is in pristine condition. We now have dominant assets in Spain's 3 largest cities, in Madrid, Barcelona and Valencia and that goes together with an asset like El Faro, where I think footfall is now touching on 10 million. Bahia Sur is getting more and more dominant in its catchment area. Los Arcos, as that new development comes on stream, the refurbishment that is going to, we believe, also be an exceptionally strong asset. So I'm delighted where the Castellana portfolio is positioned all in all. Now when you take all of these deals together and it has been a very extreme 6 months of closing deals and finalizing everything, let me tell you what the impact is going to be on the balance sheet. So for the financial year end 31 March 2026, we expect the LTV to be around 39%. Obviously, we haven't yet started our valuation cycle that starts in the next couple of weeks. If we do see valuation upticks, then that may drop a little bit as well from that, but I'd say 39% for the LTV as at financial year-end. When you take into account all of these deals that are closing in the new financial year-end, the pro forma LTV is sitting at around 42%, again, subject to where the valuations are. And I think we do expect to see some level of valuation upticks from where we are currently. But we would say that the pro forma LTV is sitting at 42%. Most importantly, the ICR is sitting at a very, very healthy 3x. So strong cash flow is coming through all in all. So I hope the slide clarifies the impact of all the deal-making that we've done. What you've seen is that it's not only about raising money in the market, it's about recycling existing assets. And all in all, I believe that the team has done exceptionally well in finding these deals and being able to redeploy the money at the right time. All of these deals should be fully paid for and the money out the door by the end of April 2026. So hopefully, that helps you in updating your models. Turning then to our outlook and guidance. I think we closed FY 2026 in a very strong position. The portfolios are performing superbly. I think the underlying operating results that you've seen are very strong, and we feel we can continue to grow on that in the year ahead. Our portfolio has been further reshaped through what I've just taken you through now, particularly in Spain, but please, let also not underestimate the very significant moves that we're making in South Africa. So it's selling non-core assets. If you look at what we bought over the last while, it's BT Ngebs that has been refurbished, renamed as Mall of Mthatha. That is doing exceptionally well. Chatsworth, which is trading fantastically since we bought it, we have very high hopes for that center. And then the new one that will come in Botshabelo. So it's still very committed to investing in South Africa, if and when we find the right deals at the right prices. I think the excellent trading metrics really speaking volumes about the ongoing asset management initiatives in the team, and that's both in Iberia and in South Africa. That will obviously continue, and that remains always the number one focus of what we do is operational delivery and value-add projects in the existing portfolio. Our effort will always be focused on those 2, and that's where our growth comes from. I'd like to just turn then to the general meeting that was held on the 20th of March, that was on Friday, which approved a 9% authority to issue shares for transactions. Unfortunately, I think that did create some kind of expectation in the market that we're going to be raising capital off the back of that, and that's not the case. What it does do is provide us with strategic flexibility to evaluate transactions. The reason why we did it is because as I mentioned, in October last year, we used our full 10% authority. Therefore, we felt that to still be able to evaluate transactions, we're having access to capital is absolutely critical in terms of the negotiating stance that we take, how we can secure deals and really what's built Vukile up to now, you need to have that flexibility to raise money as and when in order to get things done. So by having that authority in place, I think it's been incorrectly interpreted as an imminent capital raise is coming. That's not the case. But we do want to say to the market, we'd like to really thank you and appreciate the unanimous support. I think that the vote was around 99.5% in favor of this, which is pretty much unanimous support. And I think that shows full market support for our capital allocation strategy and our approach in what we do. But given the current market volatility, again, to reiterate, we will not raise money in the current environment. We will, however, continue to monitor the situation and we'll only raise money when required, when we have tangible accretive opportunities in place and a more stable price advantageous environment. So this really just allows us to stay active in looking for deals. But I think what I can say to the market is we will only look to deploy money when we've got tangible deals and that they're going to be accretive. So even though the share price has come off along with the market, it still means that some deals are in focus, other deals aren't, but we keep on evaluating and seeing what we're doing. But I think it's really business as usual for us in the sense of only looking to do deals that are accretive to our prevailing weighted average cost of capital at the time of deploying the money. We never do deals pricing against share price strength, et cetera. It's always at a point in time. If we can make a deal accretive, then it's worth looking at. So looking forward, for the year ending 31 March 2026, we can say comfortably that we will meet our guidance of growth in both FFO and dividend per share of at least 9%. That translates to FFO per share of at least 173.1 cents and full year dividend per share of at least 143.6 cents. For FY '27, we'll provide guidance, as always, at year-end results, which are scheduled for the 17th of June 2026. So really, just to end before handing over to questions, again, very upbeat from the team. We need to be cautious and mindful along with everybody around the global volatility at this stage of the game. Fortunately, all the deals that we've done, we have the cash ready. We don't have to raise money for that. It doesn't change the economics on the deals that we've already done. And with regards to new deals, we have the authority, which allows us to evaluate new opportunities, but only when we feel we have something tangible, would we look to then raise money. But for the time being, those that have been positioned themselves for an imminent capital raise, it's not happening, and we continue as we are. I'd like to thank you all for your attendance, and now hand over to questions. Louise, if you can maybe take us through the questions on the podcast.

Thank you, Laurence. We do have a couple of questions on the chat. If everybody can hear me, I'll proceed with those. Right. So the first one is from [indiscernible]. He's asked -- he says there's speculation that Castellana is bidding for the entire [indiscernible] portfolio and asked if you can confirm this.

Yes. [indiscernible] certainly, there's been a lot of speculation around that. I can confirm that we are not bidding for the whole portfolio. I think that is the seller's preference is to sell the portfolio. And speculation has been everything from a tie-up with NEPI Rockcastle to bidding on our own. None of those are correct. I guess some of the reasons why we're not interested, one of their big assets is in south of Madrid called Plaza Rio 2. We -- that is in a similar catchment area to Islazul. We believe we've now got the much stronger asset in that catchment area. In Barcelona, they've got Gran Via 2 also in a similar catchment area to Splau. We believe that Splau is a much stronger asset. And then there are some assets in the portfolio that we just weren't keen on overall. So just to be clear that we are not bidding for that portfolio, contrary to the speculation in the market.

Thank you, Laurence. The next question is from Nazeem Samsodien. He's asked for more color on the Botshabelo Mall. He says he thinks it might be close to its 10-year renewal cycle and asked if there's any risks to expected rentals to the up or downside and any potential opportunity to asset manage the asset?

Itu, could I ask you to please pick up that one?

Yes. Thanks, Laurence. Yes, Nazeem, maybe let me start with kind of the investment rationale. So you know that we've been looking at investing from a population side, the top townships, say, the top 20 townships in South Africa, we're currently in 7. Botshabelo then will put us in the eighth. Botshabelo is the biggest township in the Free State. And not only does it cater for the Botshabelo township, just up in 8, you've got Thaba Nchu. It's an hour away from the border in Lesotho. So really impressive footfall and support and significant dominance. We've been looking at this asset for probably 3 to 4 years. Just really walking the site and understanding the market. We think the location is perfect. The tenant mix is particularly strong, having the 2 main anchors. So even if someone were to look to build a competing scheme, we've got the box on the shop right. Yes, your analysis is correct. We're nearing the first 10-year renewal. In fact, the second tranche of national 5-year renewal. Looking at the trade and the performance, we actually think there's significant value for us to reposition, relocate tenants, work on an asset management improvement strategy. So that's part of the kind of thesis that we had looked at when we put together the proposal. And then I think there are some additional asset management interventions that we would look to execute on the site. The site has no solar PV. So that's going to be a very easy one for us to pursue in the next 6 months. And again, we'll overlay our renewed strategy on water and look to decrease expenses and increase our margins at that site. So really excited. I think the asset is great. The market is strong, and there's some opportunity for asset management there.

Thank you, Itu. The next question comes from Mweisho Nene. He's asked if the savings from using borehole water was significant and then which assets you have replaced municipal water with borehole water?

Yes. Mweisho, I mean, it all adds up. It's not as significant as the intervention on PV. Water expense is, let's say, 5% of our overall expense line item. So -- but I mean if you drill boreholes and you recover, let's say, 100% of your water that you use for domestic use and you get a water use license to then kind of sell the water at retail, it opens the doors. As you know, the top line is under pressure, you save in your expenses and you open new doors. So to me, I wouldn't look at it in isolation, I would look at it in line with all of the other initiatives that we have. So overlay water on PV, on soft services, on hard services. And that puts together a strategy that manages costs. And I think more importantly, it manages costs in a sustainable manner. So you're not going to see huge savings in 1 year and then challenges in the year after that. The interventions are -- we're no longer just drilling one borehole at site. And all of this is done with the Department of Water Affairs approval. We'll drill 2 to 3 boreholes. We'll save the water in tanks. We now have slightly longer than 4 days back up, and then we use that water for domestic water use within the mall environment. So yes, I think it's a strategy that should accrue some added benefits in the next 12 to 18 months, and it's really something that is exciting for us.

Thank you, Itu. The next question is from Luqman Hamid. You says, Resilient printed a 9% valuation growth in South Africa and your like-for-like NOI is 10% in SA. Can you give us a sense on the potential valuation uplift?

Yes. Luqman, I mean, I think my sense is over the past, our valuation uplift has closely matched growth in NOI, if you don't consider any movement in kind of cap rate compression and movements in discount rates. I would expect that our valuation uplift should be very close to where NOI landed up. So yes, I mean, I think expect a significant uplift in valuations in the SA portfolio.

Thank you, Itu. The next question -- a couple of questions from [ Suren Naidoo ]. He's asked who the Durban workshop sale is with, and he's also said that Vukile had invested some in a revamp a few years ago. And he wanted to know if the workshop is being sold at a premium or discount, considering it's in the Durban CBD.

Yes, Suren...

Yes, I just say, we -- all I'll say is that it's a private buyer, it's not going to listed fund, but I think it's not appropriate yet to mention who the buyer is, but it is private. Sale price was sort of pretty much in line with book value. Remember that property is on a land lease. It's not a freehold property.

Thanks, Laurence. I'm just sticking with Itu. We have a question from Nick Wilson. He's asked if it is most optimistic about the performance of township and rural retail centers in the coming year or if you're also confident about urban centers.

Yes. Nick, I mean I think our township and rural portfolio has really outperformed consistently over time. Even if you look kind of pre-COVID, we printed significant growth. Those assets are dominant. We've had huge demand from national retailers. So we've managed to get the occupancy very high and vacancies low. And we've seen consistent support from our communities, especially because we focus on community engagement and making the community feel part of the mall, right? So to me, I think those assets will continue performing well even at the high kind of levels of base where they currently are, and we'll continue to see significant growth out of those assets. What we have seen in the past 6 to 12 months is an improvement in the urban space as well as in the commuter space. So I think that kind of that improvement will continue. We're watching it closely. We are seeing more demand from retailers. We're seeing footfall trend up in those areas. We continue to invest in terms of optimizing tenant mix and also promotional activity. I think it's too early to tell, definitely, where the trend will end up. But over the next 6 months is something that I'll be watching very closely. But overall, the portfolio is in a much healthier position than it's been in a very long time. So it continues to trade well.

Thank you, Itu. We have a couple of questions on Splau. And the first lot from [indiscernible]. Is the cash-on-cash yield of 8% in respect of the Splau acquisition net of the asset management fee paid to Unibail? If not, can you disclose the asset management fee to be paid to them? And do you want to go on to the others or do you want to handle that first?

No, I think let's handle that one first. So no, it's not net of the fees. Obviously, if we own an asset 100%, we've got management costs that go against that as well. So here, those fees are being paid to Unibail, but we also earn fees from that joint venture as well. So it's something that we wouldn't disclose that fee. I don't think Unibail would want that fee disclosed. But we sort of both earn fees out of it because we play, and I think this may then, Louise deal with the next question as in what is our role in it. So what there is, is a strategic asset management forum which is run jointly by Castellana and Unibail, that really drives the strategic nature and the asset management nature of the asset. We both earn fees on that. And then the day-to-day operational management of the center is what Unibail will continue to do. And I think let me sort of perhaps expand on that because the question from [ Miguel ] is that it looks like a financial investment when valuations have bounced back. This is by no means a passive financial investment. That's not the way we operate and what we do. I think what you can read into this is a tremendous respect and working relationship that's developed between Castellana and Unibail, borne out of our experience of co-managing Bonaire. And remember that when we did the Bonaire deal, because it was coming out of the floods, we had an income guarantee from Unibail and they would manage that center for 18 months, and that runs up until June of this year. I think during that period, the relationship has really, really cemented where we're able to learn from one another. I think there's a very similar culture in running shopping centers and ways of doing things. And we just felt that the ability to partner with them on a long-term basis in an asset is very advantageous to Castellana and our group. Unibail is a phenomenal company, and we believe that it's great to be able to partner with them in this particular asset. So all in all, it's a joint management deal at the strategic level, day-to-day operations is by Unibail.

Thank you, Laurence. We had a follow-up question or another question from Miguel [indiscernible]. I'm assuming it relates to Splau, but maybe not. He's asked what cost of debt are you assuming to calculate cash-on-cash yield? Have you revised your cost of debt estimate in light of recent development at short and long ends of the yield curve?

Yes. So that is still work in progress on closing it, but sale is closed. Splau and Islazul and the margins are set. Those agreements are done. But we think that what we're trying to do is actually not fix that debt for the next 6 months. I think one's going to wait and see how the war unfolds, how long it goes for and what's the impact on the curve is. So I think to sort of try and make a long-term or a medium-term commitment of fixing debt now is probably not the right thing to do. I think what we're trying to do is sort of say unhedged, given that the current group hedge rate is sitting at 91%, we've certainly got the flexibility to keep some debt unhedged while we look for markets to settle. So it's still very much work in progress in what we're doing and seeing sort of where we end up settling on cost of debt.

Thank you, Laurence. The next question is from Mweisho Nene. He's asked Alfonso and Itu, with general expectations of inflation in the short term, have you made material adjustments to turnover growth expectations?

Let me go first. Thank you, Mweisho. Look, the prudency is that we had for our budgets a forecast over inflation, which was something around 2% as we were having that in the past. But prudency and the uncertainty that we are working with these days, well, we haven't factored anything yet into our budgets. So you can actually say that they are conservative at this stage in my view.

Yes. I mean, I think aligned with Alfonso's view, I mean, Mweisho, maybe to me, I'd say that's pretty much kind of moving target, how the inflation will impact kind of turnover, but I would then take it to the next level and say what then happens to the portfolio, especially if your effort rates are kind of relatively lower compared to competitors and one of the lowest in the sector. That means that retailers still need to trade. They're trading well. The rental sales are low. They should be paying the rentals. So to me, I think, as to how it impacts turnover, I expect minimal impact on top line, on reversions and renewals. I think one area that we're watching very closely as it relates to, number one, inflation figures and also inflation targeting is discussions with retailers around future dated escalations of contracts. You are starting to see a few retailers raise that in discussions. And we -- as you know, we're very data driven, so we bring out all of the data in terms of the labor-intensive expenses that we have within the portfolio. And we say the gazetted growth and security costs in South Africa growing at circa 8% and that's a significant part of how we manage the mall. And therefore, your view around inflation targeting and current inflation rates relative to the basket that we're seeing in the mall is totally different. So we'll continue having those discussions. But in the short term, I see no impact on top line. And maybe the discussions with retailers will be slightly more nuanced, but I still think that we've got a case that we can put forward to show that the sustained growth in our NOI that will continue to come through.

Thank you both. We have a couple of questions. Just sorry, just getting back to them. So just regarding M&A, Ridwaan Loonat has asked if you're looking at further asset recycling initiatives in SA and specifically Spain? And are there further opportunities in Portugal or has that slowed down?

Yes. So Ridwaan, we do our annual underwriting of the portfolio every year in August, which really identifies which assets we might sell, which assets we want to invest further in, which are stable cash cows, et cetera. So that always happens in August time. I think as the portfolio stands in Castellana at the moment, we probably don't have anything that's on the sales list. I think the assets are still growing. And certainly, what we bought in Portugal has got a lot of growth still embedded in them. And you'll recall, when we entered Portugal and we spoke last year, a lot of the assets that we bought have been bought because they are pregnant with asset management opportunities. So it's now really up to us to start capturing those and taking them forward. So nothing immediately on the sales list that I can think of in Iberia. In South Africa, we probably also are getting towards the end of our sales list. There are 1 or 2 small non-retail assets, but they don't move the needle either way. But I think we -- it's something that's always under review. August is the time when we go through that. But I think you could probably expect that there'll be limited recycling in the year ahead in both portfolios.

Thank you, Laurence. And we have a question from Alistair Anderson also related to M&As, asked if you are considering any European opportunities outside of Iberia.

Yes. So Alistair, I think this talks very much to the acquisition of our stake in Pradera, and Pradera is very active in a number of markets. They've got deep, deep insights, and we are currently working through a few markets with them to understand those markets in more detail and to see if there are opportunities. Obviously, again, I just want to be clear, opportunities today can only be considered relative to today's cost of capital, okay? So that's still attractive, not as attractive as it was a month ago. But at the moment, it's still very much about understanding market opportunities before we decide to proceed on any. The benefit, though, Alistair, just to again highlight it is our level of knowledge is so significantly increased through the Pradera acquisition because you're operating as locals on the ground. And that's really important when you're looking at these markets. So we're just feeling a lot more confident in our ability to evaluate new markets.

Thank you, Laurence. Next question is from Luqman Hamid. He's asked if your LTV guidance includes or excludes FE gains as of 31 March 2026?

So Luqman, the figures that I gave you do include figures for some level of gain. My expectation is that they would probably be higher than what we factored in. But also just given sort of where long bonds have moved to, we have to wait and see what happens with external valuers, especially in the Spanish market. But I'm going to give you sort of one example. If you take a center like Bonaire, which you bought at 7.2, that's quite comfortably comparable to Islazul to Splau, which we've traded now at 6.5. But what's going to be fascinating is to see what happens in that [indiscernible] portfolio that [indiscernible] asked about earlier, because we do know that -- well, what the market is talking about is that pricing expectations there are in the range of 600 to 650. Now if that comes in at, call it, 625, then we believe there is certainly upside potential on all of Islazul, Splau and Bonaire given the quality of those assets relative to what's there. So we're watching that side of the market very, very closely. On the SA side, we do believe that our valuations have generally been on the conservative side and that there is scope for higher growth. And as Itu said, typically, we've seen that our valuation growth matches our NOI growth. So yes, I think there is upside potential on the valuations perhaps over and above what's in those current numbers we have. But we only start our valuation cycle in the next couple of weeks, so we'll wait and see what comes out of that.

Thank you, Laurence. We have a question from Ridwaan Loonat. He's asked if the NOI yields quoted on acquisitions are based on BV or selling price after taking into account CGT costs?

Look, that's after taking CGT cost because that's what we're actually paying. So that EUR 318 million is what we're actually paying. Can I also -- sorry, just clarify something because I got myself confused earlier. The question was around the 8% cash on cash on Splau, that was pre or post the Unibail fees. The 8.8 -- sorry, the 8% cash on cash is after the fees, but the 6.5% NOI yield is pre the fees, okay? So if you took 6.5% and you added on debt and the cost of debt, you'll get a figure higher than 8%, but then when you drop that down, you get to the 8% as sort of a net figure cash on cash for Splau. Sorry, if I confused people earlier with that.

Thank you, Laurence. Then the last question for now is from Mweisho Nene. He says he knows it's difficult to call, but he wants to know if there is a realistic expectation that the SA hikes rates in your opinion? And if so, would you consider applying interest rate caps in SA and Spain?

Mweisho, I don't know. You guys need to tell us if interest rates are going to spike. Clearly, we watch these things very closely. And we are well hedged in the portfolio. As I said, I think our current hedging ratio is about 91%. So sort of a short-term spike really wouldn't hurt the numbers. Maurice Shapiro, our Treasurer is always active in the market, always understanding it and will not sort of be confined to any one particular strategy of only swaps, he may use caps, he may use collars. We leave all of that magic up to Maurice in what he's doing. So I think it's more of a dynamic environment than saying there's one strategy that fits all markets that we're in. So yes, Maurice is certainly keeping a very close eye on that at the moment as well as currency. The rand has been moving in quite big moves in the last few days. So we have been looking at doing some hedging on the currency side as well.

Thank you, Laurence and team, there are no further questions.

Great. Thank you very much. I know that we have bombarded the market with a lot of deals in the last short while. All of those deals that we've spoken about are now done. So there's nothing sort of imminent coming. Going into a close period, I guess we will be speaking a little bit less than we have in the last few months, but we look forward to seeing all of you at full year results on the 17th of June and take care, everyone. All the best. Bye-bye.

Thank you. Bye.