As at: 6 October 2026

Executive Summary

Key highlights

In this report, we review RES’s 1H26 results for the six months ended 30 June 2026, released in August 2026, and assess the impact on our outlook:

Financial results at a glance:

• SA REIT FFO and distributable income rose 11.7% to R919.3 million from R823.3 million, while FFO per share and DPS increased by 11.7% from 245.72c to 274.38c. Growth was driven by a 6.0% rise in like-for-like SA NPI. Reported revenue expanded by 3.4% to R1.99 billion from R1.93 billion. Underlying contractual rental revenue and recoveries grew by 6.1% to R2.03 billion, but reported revenue growth was moderated by the straight-line rental adjustment, which shifted from a R13.9 million gain to a R38.7 million reduction.

• SA property fundamentals remained healthy: Vacancy rates improved from 2.3% to 1.9% and rental reversions were positive. Retail sales growth moderated to 2.9%, partly due to temporary disruption from tenant repositioning.

• Reported earnings increased strongly, although non-cash items were important: Profit for the period moved 46.3% higher to R985.4 million from R673.4 million, while basic EPS rose by 57.3% from 177.30c to 278.85c. Stronger fair-value movements, lower finance costs, and a lower net impairment drag supported the improvement. A swing from an FX gain to an FX loss partly offset the improvement.

• Group LTV improved from 37.8% in 1H25 to 36.1% in 1H26. Gross debt advanced by 6.2% YoY to R13.95 billion, while investment property under development grew by 13.9% to R685.6 million, reflecting ongoing capital deployment. Liquidity remains adequate, with R2.3 billion of undrawn facilities, while SA REIT ICR improved from 2.5x in 1H25 to 2.9x in 1H26.

• Property operating expenses expanded by 5.7%, but the gross property expense ratio improved from 37.5% to 36.7%, as contractual rental and recovery growth slightly outpaced cost growth. RES’s solar and battery strategy continues to help mitigate rising administered electricity costs.

• Offshore earnings remained supportive: Lighthouse’s euro-denominated DPS moved 9.7% higher, while its rand equivalent contribution increased by 11.2%, supported by favourable forward exchange rates.

Analyst thesis

Our recommendation is based on:

• Asset quality supports resilient rental income: Resilient REIT Limited’s (RES) dominant retail centres, anchored by grocery retailers and leading national brands, support strong tenant demand and low vacancies. The portfolio remains exposed to consumer spending and retailer trading performance, particularly in a weaker macroeconomic environment.

• Earnings growth is being driven by stronger property fundamentals: Positive leasing, low vacancies and active tenant management support rental growth and net property income (NPI).

• Energy investment, development, and acquisitions provide additional growth and margin support. Investing in solar and battery solutions reduces the exposure to administered electricity cost increases, with capacity expected to reach 94.4-megawatt peak, supplying about 43% of the group’s electricity requirements.

• Valuation is the key constraint: With the share trading close to its net asset value (NAV), much of the expected operational strength appears reflected in the current price.

• RES owns 40% of Retail Property Investments (RPI) in France, 50% of Spanish Retail Investments (SRI) in Spain, and 27.3% of Lighthouse. Lighthouse contributed R184.3 million to RES’s 1H26 distributable earnings, representing about one-fifth of the R919.3 million total. The offshore exposure through RPI, SRI and Lighthouse diversifies RES’s earnings base and reduces reliance on South African (SA) retail.