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SA Corporate Real Estate expects net property income to grow from 6% to 7%, helped by a combination of firmer rental growth and fewer vacant units. The residential landlord said average rentals are rising 4.3%, suggesting demand for affordable rental housing remains resilient even as higher living costs continue to squeeze household budgets.“Residential rental growth remained strong in a stable operating environment, underpinned by low tenant turnover and consistently high occupancy levels. We expect this positive momentum to continue,” the group said in its pre-close update for the six months to end-June.The retail portfolio also remained resilient, with steady rental escalations leading the group to expect net property income growth of 5%-6%. Growth in alternative income streams helped support performance, though higher municipal charges and tenant installation costs lifted operating expenses.“Musgrave Centre and Springfield Value Centre continue to deliver strong trading growth, though this has been diluted by temporary weakness at centres undergoing retenanting and redevelopment, which the group expects to reverse as leasing activity is completed,” the group said.Overall, the group expects distributable income per share (DIPS) growth of 5%-7%.The group reported its industrial portfolio benefited from steady contractual rental escalations though these were partly offset by temporary vacancies at several properties that have since been relet.“Earnings were also affected by lower rentals agreed to secure stronger tenant covenants, including DHL at a logistics facility, as well as a midterm lease review for premises occupied by Bell Equipment,” the group said. In Zambia, the group expects distributable income to grow by more than 7%, driven largely by improved trading at the redeveloped Arcades Mall. The uplift was supported by renewed leasing momentum, including a speciality toys and baby care retailer that renewed its lease at a positive rental reversion.“The remaining vacancy at Arcades Mall comprises about 900m² of lower-level space, which is expected to be relet as office accommodation to a large FMCG [fast-moving consumer goods] manufacturer during the third quarter of the 2026 financial year. During the 2025 financial year, several major tenants were granted rental concessions to retain occupancy while the property underwent redevelopment,” the group said.
