Vukile sells Spanish retail parks, pivots to shopping centres

South African REIT Vukile Property Fund has sold its Spanish retail park portfolio for €279 mln to invest in higher-growth shopping centres in Spain and Portugal. 

Berceo Shopping Centre, Longrono, La Rioja

This move is part of their ongoing capital recycling strategy and will be fully funded by the sale and existing cash.
Vukile generates about two-thirds of its income and assets from Spain and Portugal through its 99.7% owned subsidiary, Castellana Properties.
Castellana recently finalised the sale of its Spanish retail park portfolio to Ares Management Corporate at a 7.1% disposal yield. 
The sold portfolio included Vukile's initial Spanish assets, acquired in 2017. Since then, Castellana's management significantly boosted net operating income by approximately 23% (€3.7 mln) and implemented various value-enhancing initiatives.
The current strong investor demand for retail parks in Spain created a prime opportunity for Castellana to sell at a profitable price. The sale price, consistent with current valuations, represents a 13% increase in the portfolio's net asset value under Castellana's ownership, despite challenging market conditions like the COVID-19 pandemic and rising interest rates.
Recognising Castellana's expertise, Ares has contracted them to manage the retail park portfolio for five years starting 1 April 2026.
As part of this strategy, Castellana is acquiring the Berceo Shopping Centre in Logroño, La Rioja, from Barings Core Spain for €101 mln at a 7% yield. Berceo is the dominant shopping centre in its region, facing minimal competition and serving a large, affluent market. Castellana will own 34,416 m2 of the 49,416 m2 centre, with Carrefour hypermarket owning and occupying the rest. The centre is anchored by major brands such as Zara, Primark, and MediaMarkt. 
Laurence Rapp, CEO of Vukile Property Fund, commented: “We see higher growth potential and better value in the Iberian shopping centre segment. Vukile intends to redeploy proceeds from the retail parks transaction, together with cash resources from our October 2025 capital raise, into fully funded Iberian shopping centre acquisitions. This rotation of capital into accretive acquisitions of well-aligned, higher-growth assets reinforces Vukile’s strategic growth as a European retail property specialist.”