Despite enticing SA deals, Vukile favours Spain for acquisitions

The South African retail property market is offering the best deal flow activity in six years, but Vukile Property Fund believes it is currently more cost-effective to look for potential acquisitions in markets like Spain.

As things stand, the local weighted average cost of capital is higher than the yield a potential buyer can snap up retail property for. This made deals potentially "value destructive" from day one in SA at the moment, said CEO Laurence Rapp on Wednesday on the sidelines of an interim results presentation.

The frustrating part for companies like Vukile, said Rapp, was that with interest rates apparently peaking in SA and around the world, now was the time to be buying locally to enjoy the tailwinds that would come as interest rates started coming down.