Delta Property Fund (DLT) H2 2026 earnings summary

Executive summary

• FY 2026 marked a return to profitability with a net profit of ZAR 127 million, reversing a ZAR 104 million loss in FY 2025, driven by cost discipline, valuation gains, improved collections, and operational improvements.

• The business shifted from stabilization to sustainability, focusing on core assets, disciplined disposals, and operational efficiency, including exiting non-core investments and simplifying the portfolio.

• Positive valuation gains were recorded for the first time in over five years, and the company exited its listed share exposure in Grit Real Estate, using proceeds for debt reduction.

• Core portfolio vacancy dropped below 20%, with overall occupancy at 72.7%.

• Enhanced water and energy resilience across major properties, supporting tenant experience and business continuity.

Financial highlights

• Net profit of ZAR 127 million for FY2026, a ZAR 231.2 million improvement year-on-year.

• SA REIT LTV improved to 56.7% from 59.5% year-on-year, though still above the 50% covenant threshold.

• ICR improved to 1.5x from 1.4x, but remains below the 2.0x requirement.

• Rental collections rose to 99.8% from 95.1%.

• SA REIT FFO per share increased to ZAR 0.173 from ZAR 0.151; NAV per share to ZAR 3.60 from ZAR 3.40.

• Net operating income was ZAR 674.9 million, down from ZAR 721.4 million due to higher property expenses.

• Fair value gain of ZAR 5.1 million, reversing a prior year loss.

Outlook and guidance

• Focus remains on restoring covenant compliance, resuming distributions, and further deleveraging, with asset sales funding debt reduction.

• Priorities include disciplined cost management, tenant retention, and executing the disposal program.

• Medium-term objective is to achieve LTV below 50% and ICR of 2x or better.

• Dividend resumption depends on disposal progress, debt reduction, and lender alignment.