WHERE TO INVEST: Resilient posts double-digit growth and Nepi Rockcastle heads for the Spanish sunshine

The Resilient real estate investment trust lives up to its name with double-digit growth, while Europe-focused Nepi Rockcastle wants to get in on the action in Spain.

The property sector remains a hive of activity on the JSE. In the past week alone, we saw major news from two of the big local names.

Let’s deal with Resilient Reit first, a fund that has more than lived up to its name. For the six months to June 2026, dividend per share growth was a meaty 11.7%.

Perhaps most impressively, this was achieved despite the group undertaking major refurbishments at six of its 28 retail centres. This included changes to anchor tenants, as well as the right-sizing of large stores.

Retail sales increased by 2.9% for the period despite all the renovations. Although this is below inflation, it’s a decent outcome in the context of broader consumer pressures in South Africa.

As an indication of tenant demand in the underlying malls in the portfolio, leases were renewed at a 2.5% premium to the previous rentals. New leases were locked in at a 7.1% premium to the outgoing tenants. These are strong positive reversions that should support the planned growth of earnings.

As protection against inflation in the cost base, leases were signed with escalations of 5.2%. Resilient also invests extensively in renewable energy projects, providing both energy security and a hedge against the inflationary impact of Eskom.

Resilient’s strategy is focused on retail centres with at least three anchor tenants. The fund discloses its biggest underlying tenant exposures, with The Foschini Group at the top of the pile (nearly 12% of contractual rental revenue). Next up is Pepkor at over 9%, with Mr Price at roughly the same level. Shoprite Checkers is only around 7%. This shows how important the apparel sector is to landlords in South Africa.

Another notable element of the portfolio is that Resilient doesn’t have any properties in Western Cape. This is at odds with the recent trend in the South African property market, with capital having shifted from other provinces towards Cape Town.

Resilient’s skew towards lower LSM malls means that the fund benefits from the ongoing shift from informal to formal shopping on busy commuter routes and near townships. The best-performing province was KwaZulu-Natal with growth of 4.4%, while Eastern Cape sales were down 2.5%.

In a far flashier part of the world, Resilient also has exposure to properties in Western Europe. The fund has a strategic ownership stake of 27.3% in Lighthouse Properties, a JSE-listed property fund focused on France and the Iberian Peninsula. Resilient is also invested alongside Lighthouse in properties in France and Spain.

If you combine direct and indirect exposure, then just more than a fifth of Resilient’s exposure is offshore. This also means that Resilient’s dividend is affected directly by the distributions coming out of Lighthouse Properties.