JSE-listed real estate investment trust Fairvest reports good operational performance and confirms it expects to achieve the upper end of its earnings guidance of a 9% to 11% increase in distributable earnings a share during its financial year to September 30, said Fairvest CEO Darren Wilder on March 23.

The company owns 130 assets that boast more than one-million square metres of gross lettable area, and it had a market capitalisation of R15.4-billion at the end of February, up R3.4-billion during the six-month period to March 31.

While vacancies across the group rose slightly to 5.9% over the festive season period, Fairvest expected the vacancy number for the group to decrease to closer to 5% once it reported its interim results to end-March, he said during a pre-closed period operational update to shareholders on its expected results for the six-month period.

The average vacancy rate across Fairvest’s retail portfolio of properties is expected to reach 4.3% for the interim period, the rate across its industrial portfolio is expected to decrease to 4% and it expects the vacancy rate in its office portfolio to decline to 8.6%, thereby breaking through the 9% target the company has set itself.

Its retail assets contributed more than 70% of the company's revenue.

Wilder reiterated that Fairvest was continuing its strategy of disposing of office and industrial assets in its portfolio to recycle the capital to retail assets, but would focus on running the properties as effectively as it could to ensure it secures good value for the assets when they are disposed of.

Further, tenant retention is expected to increase to 86% for the six months to March 31, with the weighted average lease expiry up to 45.7 months.

Its loan-to-value ratio is currently below 27%, but Fairvest expect this to increase to between 30% and 31% for the six months under review, once the two new retail assets it acquired, Jozini Mall and Tugela Ferry Mall, in KwaZulu-Natal, are transferred.

Average gross price per square metre was expected to increase to R136/m² for the six-month period, and Fairvest still had lots of value in its portfolio that it could extract through renewal reversions, he said.

Additionally, its positive rental reversion was expected to increase to 5.4% for the six-month results, up from 4.8% at the end of the 2025 financial year.

“All the metrics are performing in line with, or above, our expectations with no outliers in the performance metrics. Our balance sheet is strong and we are not stretching the business. This means we are growing from a position of financial strength,” said Wilder.

He reported that the company's acquisition pipeline was strong and it expected to close more acquisitions during the final six months of its current financial year.

“Operationally, we are strong and delivering at the upper end of our guidance range. The portfolio is performing well, our balance sheet is strong and our acquisition pipeline is expected to be value-accretive.

“We are not leveraging aggressively to pursue growth, but are pursuing growth within the guardrails of prudent capital management,” he said.

Fairvest CFO Jacques Kriel also confirmed to investors that the company expected to achieve the upper end of its guidance of a 9% to 11% growth in distributable earnings a share for the 2026 financial year.