Good afternoon to our South African viewers. Good morning to our Spanish viewers. It gives me great pleasure to welcome you to our interim results presentation for financial 25. As always, I'd like to start off with a bit of a context in terms of setting the scene for the results. Really just to run through some key big moving parts around the business. The business at the moment has got around ZAR 40 billion of assets under management. 60% roughly in Spain, 40% in South Africa, and earnings coming approximately 50/50 between the two. Three things to notice about the slide and the numbers that are gonna be coming. Number one, you'll notice that under strategic investments, we no longer have a stake in Fairvest.
That was sold in May 2024. That money will be redeployed into our PV projects. The benefits will come through probably in the second half of this financial year and beyond. Importantly, the stake in Lar España, many of you are aware that we've signed an irrevocable to sell that. That irrevocable was only signed in October, post-reporting period. Currently you're seeing the stake in Lar España. The next time we meet, that will more than likely be out. That money hopefully redeployed into physical assets. We'll talk a bit about that later in the presentation. Finally, the deal to enter Portugal was effective 1 October.
Also not in these numbers, but we bought three shopping centers in Portugal, for EUR 176 million, and that will be part of the reporting going forward. Against that backdrop and that context, it really gives me tremendous pleasure to report another very strong set of operating results. The business is in a very strong position operationally and financially. Itu will talk you through all the achievements in the South African portfolio and Alfonso through the Spanish portfolio. Really what's exciting us is when you look at the operating metrics in the business, they remain exceptionally strong. If you look back over the last, call it, 5 years, which have been very difficult and challenging years, operationally the business has been performing exceptionally.
That has continued, what we are very excited about is that we're starting to see headwinds turning into tailwinds. I think when you combine a better macroeconomic environment together with a strong operating performance, I think the business is very well set up, not only for the remaining 6 months of this financial year, but certainly, into the next number of years ahead. What is also very exciting for us at the moment is looking at the balance sheet and the corporate and deal activity currently underway. Balance sheet in a very strong position, LTV down to 35%, but importantly, ZAR 6.4 billion of liquidity. Of that, ZAR 5.1 billion is sitting in cash. Now, that is really to be deployed into opportunities coming through.
We've obviously got the Lar España deal that will take place. We expect that to happen in early January. There is a home for that money. There are also other deals currently very far advanced that we are looking at in Portugal. If all goes according to plan over the next few months, this could really be quite a transformative year for Vukile and Castellana, where we would have acquired 5 shopping centers in Portugal, 3 already on the balance sheet, as well as an additional center in Spain. A very exciting year lining up for us.
All in all, that culminates in a dividend at the upper end of guidance of 6% for the first half and very much on track to deliver growth in FFO per share as well as dividends per share for the full year. With that, I'd like to hand over to Itu to take us through the South African portfolio.
Thank you, Laurence. Good day, everyone. It really does give me a great pleasure to present the SA results for the period ended thirtieth of September 2024. Portfolio continues to deliver exceptional results, really showing the defensive nature of our portfolio composition, as well as our continued focus asset management initiatives. Our portfolio is valued at ZAR 16 billion, with the addition of the ex-Builders gaps, now known as Molomata in April. Our asset base has increased to ZAR 33 billion. Significant highlight of this reporting period has been the further aggressive execution of our PV strategy. We've added 4 additional PV plants, covering 4.9 megawatt peak. We've improved our PV contribution from 18% of our total electricity consumption now up to 20%.
We're currently busy with 6 more, which will be completed in the upcoming months, which will take our exposure to 34.9 megawatt peak, which will be a 58% increase in solar over the year, resulting in our most aggressive PV rollout in a financial year since we started with the program. Our valuations have increased by 3.7% on a like-for-like basis, 3% of that coming through purely from net operating income organic growth. Our like-for-like net operating income has seen a 4.6% increase in NOI. This has been driven by steady top line growth. We've seen significant savings on water and diesel consumption. We've seen additional PV margin come through within the portfolio. These positives, however, have somewhat been countered by increases in net rates and taxes and overall municipals.
With the significant PV pipeline that we have over the next 6 months, as well as water projects, which I'll speak to a bit later on, we anticipate that our net operating income growth to be close to 6% at the end of the year. Our vacancies have been sustained at 1.9%. Our reversions continue to be positive at positive 1.6%. Looking at the efficiency measures, significant highlight of the year has been improving trading densities. An environment of improved trade from 2.4% at year-end, now at 4.2%. We've seen an improvement in trading densities across all of the segments within the portfolio.
We're also pleased to present the lowest cost-to-income ratio that we presented in a decade, down from 16.3% to 15.1%. This has been driven by the steady top-line growth, the savings in water and electricity, savings in self-services in terms of operational efficiencies, but also significant savings in diesel expenditure. In summary, we're really pleased with the strong and sustained performance of the portfolio. This has been driven by the top, sustained rentals and collections that we've seen in the portfolio, as well as creative cost management strategies. Moving on to the portfolio composition. Key to the strong performance is our well-positioned defensive portfolio composition, which remains predominantly in the township, rural, and value markets. About 70% of our portfolio is in that space, and well diversified in eight of the nine provinces.
When I look at the slide, the key opportunity for me remains in the township portfolio, with low rent-to-sales ratios, low WALE, and a significantly strong trade. For instance, at Gugulethu, our rent-to-sales is sitting at 4%, with trading densities up at 60,000. This really augurs well for driving strong reversions within the portfolio and rental growth in the short to medium term. With regards to our key value drivers, when we explore these value drivers, you will note that they've really held steady over a particularly challenged trading environment over the past five years. Our vacancies have trended downwards. We've seen a steady increase in our basic rentals. Our reversions remain positive, with 77% positive of the 287 leases that were renewed. The expectation was for this to be slightly higher than 3%.
In fact, it was at 3.3%. It was pulled back by 2 specific deals, the gym at Randburg Square and the cash pool at Markie Plaza, which we had to retain, resulting in the 1.6% positive reversion. My expectations looking forward into the next expanse is that it should move above the 3% mark. We've seen steady escalations. These key drivers, looking at the bottom of the slide on the right-hand side, have been sustained by strong trade within the portfolio. Since financial year 2020, we've seen an average of 8.2% growth in turnover. This has driven the NOI growth of 5.2% over the same period, which has resulted in a 4.9% like-for-like valuation growth.
Key to note that all of these figures have really been generated in a very somber environment where GDP has growth has been pretty much flat. As Laurence has said, with the improving sentiment, and the macros, we really should see these value drivers improve further. Moving on to our retail category performance. A real good story in terms of the set of results. The trading densities have grown by 4.2%. This is the strongest like-for-like growth that we've seen since financial year 2017. This excludes the COVID rebound that we saw. This momentum was achieved across all of our major categories and tenants. Our top 10 tenants grew by 4.6%.
The grocery category, that represents 21% of our GLA, grew by 5.2%, compared to the 0.9% that we saw at the end of the previous financial year. Pleased to report that the 3 major grocery anchors that we have in the portfolio have also shown growth, which is positive. The fashion category, the biggest category within the portfolio, has also seen growth, from 0.9% to 1.8%. With growth in womenswear, driven by that 7% increase in that space, and a 4% growth in menswear. 11 of our 14 categories saw growth both in turnover and trading densities. Really strong performance that we've seen in the portfolio in terms of trading densities in the past 6 months.
With regards to the trading environment, all of our segments have shown trading density growth really led by the township and the rural portfolio. When one looks at the first 6 months of the year, the first half, the trading environment can really be characterized into a tale of two quarters. In the first 3 months, we saw steady, measured growth. Trading density is growing up to 2.9%, this was in the context of pre and kind of post election uncertainty. Post that period, we've seen significant improvement in our trading densities, which have now landed up at 4.2%.
Our footfall is in line with where it was at this point, last year. A key observation within the portfolio is we're seeing a stronger spend per head, led by the township portfolio. We're seeing it in the rural as well as the urban. Really pleased, with, with the performance in terms of trading densities, that we've seen and the footfall, in our portfolio. We remain of the view that our portfolio is under-rented based on the strong trade and low rent-to-sales. Our rent-to-sales or effort rates are at 6%, which according to benchmarks is circa 20% below market. Over the past 4 years, a period of particularly difficult trade, our rent-to-sales growth has not put pressure, on our rental growth.
Our rent-to-sales growth has only grown by 0.2%. This is a close alignment between rental and trading density growth, which really shows the sustainability of earnings and growth within the portfolio. Looking ahead, as trading conditions improve, the rental growth that you've seen within the portfolio in terms of our value centers at 5.9%, our rural portfolio 5.2%, and our township portfolio at 4.8% should really increase further. The urban portfolio, when you look at the interplay between rental growth, trading densities, and rental sales, has the greatest potential. Overall, we really expect significant top-line upside within the broader portfolio looking forward. To roster our leasing activity. Leasing activity continues to be vibrant, with strong support across all of the segments.
There's a clear environment of increased demand for investment-grade assets, which is a portfolio that we hold. We've seen an increase in our weighted average lease expiry. Two years ago, our WALE was at 3.4. Currently, it's at 3.5. On recent new deals and renewals, that WALE has increased to 3.8, really showing that, our tenants are looking to stay longer in our centers. 78% of our leases that renewed or concluded with national tenants, and we still receive significant support from our top 10 retailers. When I look at the slide and look at all the key measures in terms of leases signed, new rent signed, WALE, as well as GLA signed, all of these are tracking slightly ahead of the prior period.
On this slide, we wanna highlight the deals that we've done with on the right-hand side, with our traditional top 10 tenants across all categories which have been vibrant. We also, quite importantly, would like to highlight new formats on the left-hand side, and the trend in the leasing environment in terms of new entrants. On the traditional side, we've opened the Checkers at East Rand Mall with the redevelopment that we've done there, as well as a Boxer at Dobsonville. We've also seen a conversion of Pick n Pay in Onesi to a Boxer, and we're currently working on 2 further Pick n Pay conversions. On the new side, what is quite exciting for me is the services category.
We've recently closed the deal with the SARS at a branch, which is quite exciting, and we've got a pipeline of 2 more that we're looking at. We've also done deals with SASSA at Gugulethu and Mthanzane, really just adding to that service offering within our malls. We're also observing the Pepkor HomeTech and Sleep Emporium, which in our portfolio, will be the second that they'll open in the country. We'll be closely watching the acquisition of the furniture business from Shoprite to see what actually happens in this space. really, encouraging leasing activity, both in terms of traditional retailers as well as new entrants. We speak frequently about customer centricity, and that, shoppers within our portfolio are the primary stakeholder.
On this slide, we've really looked at an operational challenge, and we've put together an innovative solution that we wanted to share with our investors. The first example is on shopper demand. We've had a wonderful performing category in fast foods and restaurants in a mall called Riemsbucht that we own. Unfortunately, the mall is pretty much fully let, so we couldn't expand on that category. We got a lot of feedback from our shoppers and our community to say that they would like to have more diversity. What we then did is we had storage space around the back of the mall, which we converted into a multi-brand blind kitchen with 4 additional offerings. This has been working well with in conjunction with Uber Eats.
We've received very strong positive feedback from the quality of the service, and this is really showing, how we found an operational challenge and put together a customer-centric, innovative solution. In the East Rand in the past six months, we've seen instances of increased crime. We've received a lot of that feedback from our shoppers. We've then pivoted and changed our technology and introduced what we call license plate recognition at East Rand Mall, to really link the, possible criminal activity with the database, to drive prevention. We've also changed the formatting of our cameras within the mall. We've looked at challenges, and we've been customer-centric in terms of looking at solutions.
On this slide, we highlight key utility risks that we've had within the portfolio, as well as mitigating actions. The key point from a Vukile perspective is we always look to be proactive in terms of finding solutions that add value to the portfolio, to some of the challenges that we face. If you go into the detail of the following slide, you'll see the value that comes through from all of these mitigating actions that we've put into place. Starting with the cost-to-income ratio on the right-hand side, financial year 2013, our cost-to-income ratio was 27%. We've seen that decrease over the years, currently sitting at 15.1%. All of those 10 cost categories that you see on the slide really have key strategies that we pursue.
On this slide, we really just wanted to highlight and introduce our strategy around water management. The goal around water management is really to build capacity to improve efficiency and generate revenue, very similar to what we've done with our solar PV strategy, which has now become a profit center within the business. Our borehole water within the portfolio contributes 17% of our total water usage. We've increased our smart metering within the portfolio. That has led to improvements in our recoveries from 89% in financial year 20, currently sitting at 92%. We're also busy with 10 water usage licenses to ensure that we don't only have domestic water supply, but we also use it for commercial use. An interesting case study is the Daveyton case study, where we drilled a borehole in June 2024.
We've accrued savings that amount to close to ZAR 1 million. Having saved close to 23,000 kiloliters of water, which equates to about 10 Olympic-sized swimming pools. This is a key part of the portfolio that we'll continue to intensify on, where we find that there's a challenge, and we try and put together a sustainable solution to decrease the cost and drive value in the portfolio. Just highlighting our energy and sustainability. We currently generate 20% of the portfolio's electricity through renewables. Currently busy with the six malls that will increase our capacity in this financial year by the 13.3 megawatt peak. We would have moved from 21.6 megawatt peak to 34.9.
This will get us to about 80% of our original target that we had set for ourselves when we started this project. We continue to execute on our base strategy. We've executed on it at Renesse Mall as well as Maluti Crescent. Those have worked well for us in terms of having battery solutions in the malls. With regards to alternative income, 12.7% average growth that we've seen in this space since financial year 2020. That circa ZAR 17 million income flows really directly to the bottom line. We know we mostly execute this with partners. It's been driven mostly in cell phone masts, telecoms, billboards and exhibition quad space.
The key to our alternative income at the moment, it's still under 1% of our gross income. We continue to have ambitions to grow this to circa 5%, at which point it will net off our security and cleaning costs. It's something that we're still focusing on within the portfolio and we will continue to drive. Over the next three slides, I will talk to a few projects that we have within our portfolio. Two value add projects as well as a new development that we would like to introduce. The first one is the Bedworth Center. Bedworth Center is a 34,000 square value center that we have in Vereeniging. It represents about 4% of all of our GLA within the portfolio.
We had been in talks with Pick n Pay to take back about 14,000 squares of the Pick n Pay hyper and look to repurpose it. We took this back at the beginning of the year. We have since subdivided that box and have introduced a Boxer, as well as a Shoprite, which will open this coming Thursday. We spent quite a bit on the mall to improve aesthetics, amenities, security. We've diversified the tenant mix. We've introduced, food, beverages, health and beauty, additional fashion tenants. We spent ZAR 141 million on this redevelopment at a yield of 11%. Really looking forward to see how this mall will trade post the festive season and also into the new year. The second one is just an update on Mall of Umtata.
Mall of Umtata, we bought it for the ZAR 400 million. We're doing a redevelopment for our 50% of ZAR 110 million transferred in April. The vacancies since transfer have decreased from 16.9% down to 8.2%. We've recently in the past week concluded a deal with Shoprite, and we're working on a couple more deals which should, decrease that vacancy in Q1 of next year down to 2%. Really happy with the robust leasing environment that we're seeing out at Mall of Umtata. In terms of the work that we're doing, it's progressing well.
We've done a lot of work to the bulkheads, tiling, lighting, facades, and we're really looking forward to completing this redevelopment in March and seeing the value added to the broader portfolio. A new development, we are participating with a 33% share in a development called Thavhani Retail Park. It's effectively adjacent to the Thavhani Mall, which we own with our co-owners, Flanagan and Gerard and Ramakgolwe. This retail park really reinforces the dominance in the region. It centralizes and strengthens this node as the preferred shopping node within Thohoyandou. We'll be spending ZAR 101 million on it for our 33%. We anticipate that completion will happen in October 2025.
At this point, the initial yield is sitting at 8.6%, really, the real reason for us to pursue this is to create the dominance and strengthen, our position in the broader Thohoyandou node. Just on our valuations, I've touched on this, majority of the valuations really comes through from organic growth. Our forward yield is sitting at 8.6%. We're really still very much comfortable with our reasonability checks such as yield, disposal versus our book, and also the correlation between our valuation growth and NOI. Our overall growth is at 3.7%, still with a conservative value density of just north of 20,000. To conclude on my side, really, as Laurence has said, the operating environment has been tough.
Notwithstanding that, this portfolio has really held up admirably. With all of these headwinds now potentially starting to become tailwinds, we're really looking forward to see how this portfolio can fly over the next couple of periods. We'll continue to focus on growing and honing our customer insights and putting our customer, our customers and shoppers at the center of everything that we do. We'll look to improve our tenant relationships and continue to drive operational excellence. With that, I would like to thank you for your attention and then hand over to Alfonso to take us through the update of Castellana.
Itu, give me.
Thank you, Itu. Congratulations once again for such great results and performance in the South African portfolio. Hola, buenos dias. Always delighted to be back in South Africa, especially when I come to give such good news. It's always a pleasure.
I might sound now like a scratched record, but I always like to stress that these consistently solid and positive results we are showing again don't come alone or by miracle. There is a tremendous work and effort behind the scenes from our extremely committed team, with a clear purpose and mission to keep Castellana as a market leader now in the Iberian region. To start with the presentation, as an economic update, I wanted to highlight some important points. The Spanish economy is to grow even higher than the USA's.
It's not me who say so, but the Financial Times in its article of October 29th that reads, "Boosted by investment, immigration, and tourism, Spain's economy is set to record better growth than even the U.S." For our readings, Spain is projected to keep this growth pace for some time. The reasons behind this belief are quite clear and logical, according to CaixaBank Research report of October. Firstly, households' finances are broadly healthy, with aggregate debt of 45% of GDP when compared to the 81% reached in 2012 or the Euro area's current 52%. Spanish debt is at low levels. The high savings rates also are shored up households' balance sheets. Standing now at 13.4% of gross disposable income, well above the historical average of 8.6%.
The second strength of Spain's economy is its diversified export base, which bolsters its economic resilience. In terms of both products and countries, our exports are more diversified now than they were in the previous cycles, and more and more companies are exporting. Thirdly, but not less important, Spain's economy is highly diversified at sector level, supported by the deployment of European NextGenerationEU funds. Tourism remains a significant driver of growth. It is estimated that tourism GDP will end 2024 11.5% above those levels of 2019. Other sectors also stand out. In the case of real estate activities, for example, it is almost 16% higher than 2019. Professional activity is 15.6%, and the manufacturing industry grew to 10.2% from pre-pandemic.
Finally, there are 2 additional factors which have unexpectedly entered the scene during the current cycle, and which are also playing a prominent role. That is population growth and the diversification of the energy mix. In the past 2 years, the population has increased by just over 1% annually, largely due to the arrival of 1 million people from abroad. This influx has increased and rejuvenated the labor force, and projections indicate that the population will continue to grow at a similar rate in the coming years. On the other hand, the diversification of the energy mix is a notable factor as renewable energies take on an increasingly prominent role to reduce country's energy dependence and become more competitive. Another useful measure of the economy as valuable as data is that we see at ground level. The mood on the streets remains positive.
We still see streets full of people, restaurants packed, roads busy every weekend, hotels fully occupied. More importantly for us, most shopping centers in Spain increasing footfall and sales, consolidating as one of the preferred options for people to spend their spare time. In conclusion, the Spanish economy, driven by consumption, will keep its growing pace for a while, and Castellana is very good position to thrive through this second growth wave we have ahead. Now moving on to the key portfolio metrics. Here, highlight net operating income growth of 2.1% versus last year's first half. This income growth remained to be the main driver to keep growth in FFO as well. The novelty here is now valuers have kept cap rates untouched from last valuation in March. We'll see that later in a specific slide on valuations.
We keep a very defensive and healthy tenant profile, a very solid WALE of 10.3 years, still low OCRs and low average base rentals. Occupancy and collection rates are at 99% levels. Both ratios way above the sector benchmarks show high demand from tenants and on our portfolio and outstanding performance on our rent collection team. As you can see, very positive growth indicators, which allow us to keep signing leases and increase reversions, confirming the strength and sustainability of our cash flows, the most important factor in a company like Castellana, I would say. Now focusing on the fundamental indicators of our business, footfall and sales, these indicators keep showing a fantastic performance.
When looking at the comparison to benchmarks, where Castellana portfolio constantly outperforms, we conclude that our managing ways of carrying for the assets and being real on customer centricity are the drivers to accomplish our mission of delighting our customers, hence bringing more people and increasing dwell time in our centers. Footfall grew in the period of 3.2%, given that we are now having closed areas under works in several of our shopping centers which are being repositioned. We expect a much larger growth once those areas are reopened and trading. Sales in the period grew by 4.8%, while at the closing of FY 2024 back in March, shopping centers were the outliers in growth, retail parks have come back to be the stars with growth of 6.8% in the period.
Focusing on sales, if we look at it by sectors, we see all categories growing substantially. All of them in a very positive territory, especially our key categories by rent weight, such as fashion, homework, and health and beauty. Culture and technology, we see a drop there, very much motivated by a base effect of game, the video game retailer, that last year hit a new record as per the release of the PlayStation 5 that boosted last year's sales.
At leasing activity level, between April 1st and September 30th, of this year, 2024, 83 rental lease transactions have been signed, 67 new contracts and 16 renewals involving an area of more than 27,000 square meters, which have led to a new and refreshed rents signed, for a value of EUR 6.9 million per year, and which results in an impressive 45.5% increase in the average rent per square meter of these transacted units. Please note, as mentioned in past occasions, that that figure does not include indexation, which we'll add in the coming months. Reversions on their own have been outstanding, very much driven by three large deals in which the tenants have increased rent significantly.
We keep our enviable portfolio occupancy of 99%, leading the market, as well as leading rent collection ratio at 99%, well above the industry average. Moving on here, we can see the gross rental income bridge in a like-for-like basis of same portfolio and same period of time. Gross rentals have grown by 2.3% in comparative terms. This gross income translates to a NOI growth of also 2.1% versus same period last year. At fully let capacity and the work in progress value-added projects completed, the portfolio should generate gross rental income of EUR 76 million annually. We expect this to come real in FY 2026.
As for the GAF bridge here, total growth for the period of 2.6% made by 1.1% growth in direct portfolio and the rest coming from the Lar España investment, which is valued at September closing on EUR 8.05 per share, which is lower than the price agreed for us to sell the stake anytime soon. As you all know, Castellana portfolio is externally valued every 6 months by Colliers, as a prestigious and renowned European valuation firm. The main change in this valuation cycle is that valuers have started considering the improvement in the investment market in Spain, and hence, cap rates and exit yields have been untouched this period, placing the same ones used in the March valuation, as opposed to rise them as they've been doing since March 2022.
As you can see in the graphs on your right. 1.1% growth at portfolio level continues to be driven by net income growth generated during the period. We do believe our portfolio has embedded value as the consolidation of income growth during these past more difficult years should be released once yields and cap rates start to come down to a more normalized market levels. As I stated before, a great deal of our differentiation and hence the great performance in footfall and consequently in sales of our customer-centric approach, by which we focus on what our communities demand and desire for people not only to come, but to repeat visit, to stay longer, spend more, and become fans of our shopping centers. On top, we insist on strengthening our shopping centers of as social engines.
We continue to focus on bringing new events and experiences to our shopping centers that make our customers visits an unforgettable moment. Proof of this is the last roadshow event we ran transversely within the portfolio. The Willy Wonka's Chocolate Factory was hosted during the period in our six shopping centers and Granaita Retail Park. The show included tailor-made exhibition featuring 4,500 kilograms of chocolate workshops for children in the community, and live shows that delighted the smalls and the grown-ups. The results that you see there are very impressive. More than 350,000 visits to the exposition, 7,100 children in the community attended the workshops. A customer satisfaction rate of nine out of 10, 4,700 new members on our royalty program.
The most important bit, because that is why we do it, visits grew more than 8.3% compared to last year. Another differentiation factor of our business is how we care for assets and what and how we invest on them to increase income and improve their quality. Our start project, the reconfiguration of the former Hipercor in El Faro, is advancing well and in time. As we speak, almost 100% of the space is already let to best-in-class retailers such as Lefties from the Inditex group, which by the way, are opening the largest store in the world here in El Faro. Others like Mango, Primor, or Álvaro Moreno are also opening. All of them to open their ultimate format by mid-December this year, ready for the Christmas campaign.
On Vallsur's first floor, reconfiguration, phase one has already been completed, and we can confirm excellent results on, of what we envisioned. Highlights, again, the extraordinary performance of La Chismería, the new food court area that opened last December. Fully let and trading, it has impacted so positively in the center that Vallsur has overpassed the 2019 footfall figures in the last months. We've also seen how Vallsur's dwell time has grown by 7% from last year as the food offer in La Chismería is making customers to stay longer in the center. All restaurants open in La Chismería are exceeding expectations in terms of sales, but the most exciting news is that even the existing restaurants at the top floor are also increasing sales. Very good performance metrics that prove our business case. Phase two is progressing in line.
Leases signed already with high-demanded fashion retailers such as Álvaro Moreno, Fifty Factory, or AW LAB as anchors of the area. We expect for this phase two to be open and trading by March next year. To end up with, as you all know by previous announcement, on the first of October, we completed our successful entry in our neighbor and sibling market, Portugal. To us, it has always been a very attractive market, not only because of its economics, that are also in very good shape with GDP growth outlook of around 2%, but also has a well-established middle class that consumes outdoors, strong tourism industry similar to Spain, and most importantly, a very strong shopping center culture. As there are no major department stores and very limited retail high street, hence most of the shopping center and Sorry.
Most of the shopping and leisure time of Portuguese are spent on shopping centers. The deal consisted in three shopping centers, two of them located in Lisbon, named Rio Sul and Loures. The other one in the Porto greater area called 8ª Avenida. Adding more than 74,000 square meters and 444 units to the portfolio, the footfall numbers are impressive and occupancy is above 98% in all of the three assets. The centers are in very good condition and are performing very well. The team have already identified some opportunities for growth via management and value-add projects that will be seeing light once the team settles on the ground. All this makes this portfolio a very safe entry point into the Portuguese market and Castellana is convinced that in our hands there is more growth to come shortly.
For a total consideration of EUR 176.5 million, our entry yield at 9.25% is very attractive and give the pace of the investment market in the Iberian Peninsula, there is still more value to be extracted out of this portfolio. With this, I end that, the Spanish part. Many thanks for your attention, now pass it over to Lizelle on treasury and financials. Thank you.
Thanks, Alfonso. Good afternoon, everyone. I'm pleased to report that over the past 6 months, Vukile's outstanding operational results translated into an interim dividend of ZAR 0.55 per share, representing a 6% increase in dividend from the prior period. Funds from operations increased by 15% compared to H1 of the previous reporting period. The significant increase in FFO is distributable to strong operational performance in South Africa and Spain, as well as additional interest income from cash balances following share issuances during the period. Although FFO per share reduced by 3%, which is purely timing related, we remain comfortably on track for our full year guidance of 2%-4% growth in FFO per share and 4%-6% growth in dividend per share.
The reason for the 3% reduction in FFO per share was as a result of the timing of new share issuances relative to the prior period. The antecedent adjustment to FFO caters for new shares issued during H1 of FY25, but it disregards the 68 million shares issued in H2 of FY24. When we calculate the FFO per share for the full year, this anomaly related to the antecedent income will no longer be applicable. Looking at the composition of FFO for the last 6 months, a substantial component of the increase in FFO is attributable to the solid operating metrics in the South African portfolio. During the period, Vukile sold its remaining interest in Fairvest in line with our strategy to dispose of non-core assets. Income from other investments reduced significantly during the period.
The sale proceeds are being redeployed in PV projects in South Africa and will generate income in H2 of FY25. The increase in corporate costs is mainly attributable to staff-related costs, as well as the rollouts of marketing and advertising campaigns. In the current period, staff-related costs include an amount of ZAR 7.4 million related to outperformance on the conditional share plan, given that Vukile substantially outperformed its peer group in respect of the relevant performance measure. In the prior period, the conditional share plan had a clawback of negative ZAR 17.4 million, since not all performance measures were met for FY23. Showing the effectiveness of our remuneration model in aligning the interests of shareholders and management. This means the variance attributable to staff-related costs amounts to ZAR 25 million of the total variance.
Excluding these variances relating to the conditional share plan and marketing and advertising campaigns, corporate costs increased by circa 7%. We saw an increase in interest income during the period, which was due to higher interest rates, coupled with short-term cash investments from proceeds of capital raises. The increase in interest income was partly offset by an increase in finance costs, mainly due to EUR base rate increases that impacted Castellana's syndicated loans, of which the fixed rate had expired in September 2023. The loans were refinanced and refixed in September 2024. The slight decrease in Castellana's FFO was due to the rand-EUR exchange rate, being ZAR 19.86 for the current reporting period, compared to ZAR 20.30 in the previous period.
Although Castellana's FFO is not hedged, the negative impacts of foreign exchange movements was partly offset by the FECs that hedge Castellana's dividend. As Laurence mentioned, the disposal of our LAR shares is a very important issue for FY 2025. Let's discuss how we'll deal with it. Firstly, from an accounting and FFO perspective. Given that LAR has a December year-end, they normally declare their annual dividend in March or April of each year. Seeing that the sale is effective in January, no dividend will be paid from LAR prior to the sale, and Castellana will forfeit the FY 2025 dividend. From an IFRS and Spanish GAAP perspective, Vukile and Castellana's FY 2025 reporting period includes LAR's FY 2023 dividend only. No dividend will be recognized for LAR's reporting period ending December 2024.
From an FFO perspective, we continue to recognize the normal dividend accrual up to the dates of the disposal. In terms of our policy, we accrue ZAR 0.058 per share per month, which is based on LAR's most recent dividend declaration of ZAR 0.70 per share. In addition, we also recognize in FFO an amount of EUR 5.3 million relating to the prior period under accrual. Historically, a prior period under accrual was brought into Vukile's FFO equally in H1 and H2 of each reporting period. For H1 of FY 2025, the full prior period under accrual has been included if in FFO due to the fact that the investment in LAR is classified as held for sale. Looking at the impact of the disposal on the Vukile dividend.
Based on the offer price of EUR 8.30 per share, Castellana will receive EUR 200 million for the sale of the shares. In terms of Spanish GAAP, it will result in a capital gain in the region of EUR 80 million. In terms of Spanish SOCIMI tax law, Castellana must distribute 50% of the capital gain. In other words, EUR 40 million must be paid as a dividend. To remain tax neutral, Vukile will on distribute 50% of the capital gain to Vukile shareholders. However, in line with South African REIT best practice, Vukile will endeavor to retain as much of the capital gain as possible, because distribution of the capital gain amounts to a permanent erosion of the company's capital base. The most beneficial outcome for shareholders would be for Vukile to redeploy the proceeds into other accretive acquisitions.
An option currently being evaluated by management is to recoup 50% of the capital gain by reducing the payout ratio from normal earnings in South Africa and Spain, so that Vukile's payout ratio based on total group FFO remains between 80% and 85%, provided that Vukile and Castellana remain tax neutral. Over the past six months, there was a slight decrease in NAV per share, primarily due to the strengthening of the rand-euro exchange rate from ZAR 20.37 at 31 March to ZAR 19.24 at 30 September. Vukile ended the period with cash in excess of ZAR 5 billion. Over the past six months, ZAR 2 billion was raised from share issuances as well as the dividend reinvestment plan, with the proceeds to be deployed into new acquisitions.
It's also important to note that cash from operating activities of ZAR 1.6 billion far exceeds the interim dividend being declared of ZAR 680 million. From a treasury perspective, the group debt maturity profile is at a healthy 3.5 years, and the group interest-bearing debt hedge ratio is at 91%. The hedge ratio has increased from 59%, primarily due to Castellana's syndicated loans of EUR 242 million being refinanced with the fixed-term interest rates. During the period, Vukile also hedged ZAR 2.6 billion of ZAR debt and EUR 24 million of SA euro debt. Benefits from hedging debt at below current base rates are only expected to be felt in the second half of the reporting period. GCR reaffirmed Vukile's credit rating of AA, with an upgraded positive outlook.
Fitch also reaffirmed Castellana's credit rating of BBB-, also with an upgraded positive outlook. The group's average cost of debt for the period was 5.7% compared to 5.5% at 31 March. Castellana's fix of EUR 256 million relating to the Aareal syndicated loan expired in September 2023. The full impact of the increased euro base rates in respect of this loan is evidenced by our euro cost of debt increasing to 4% compared to 3.7% in FY 2024. In September 2024, the syndicated loan was extended and fixed. The benefits of fixing will, however, take 12 months to be fully incorporated in the euro cost of debt, which will benefit the group cost of funding going forward.
We started to see a decrease in base rates, both in South Africa and Spain. We expect base rates to continue to reduce over the remainder of FY 2025. Off the back of a successful GCM auction, historically, high base rates have also partially been offset by the reduction in our ZAR margins. This is evidenced by our ZAR cost of funding reducing to 9% compared to 9.5% for FY 2024. The group interest cover ratio is currently at 2.5 times. Since the ICR is a 12-month backward-looking metric, improvements in base rates will take time to reflect in the overall ratio. At September, consolidated group loan-to-value net of cash was 35.4%, which is comfortably within our covenant levels of 50% in South Africa and 65% in Spain.
Vukile is well-positioned for growth through the lower LTV coupled with strong liquidity. The reduction in group LTV is primarily as a result of the issue of ZAR 1.5 billion in new shares in September, the dividend reinvestment plan that raised ZAR 536 million in July, and an increase in property valuations. In the next 6-12 months, as cash is deployed into new acquisitions, the group LTV is expected to increase to circa 40%. A detailed sensitivity of the LTV to both property valuations and foreign exchange movements can be found in the appendix on slide 107. As part of the group's funding strategy, Vukile proactively manages its debt expiry. Only 4.4% of group debt matures in FY25.
Following the refinance of the syndicated loans in Spain, Castellana's average debt maturity profile is at a healthy 4.6 years, with the next debt maturity being in FY 2029. Vukile has exceptionally strong liquidity, with cash and undrawn committed facilities of ZAR 6.5 billion, exceeding all debt expiring in the next 12 months by 2.8 times. Vukile continues to focus on liquidity by maintaining a balance between undrawn committed facilities and short-term debt expiries to reduce and effectively manage refinance risk. In August, a successful unsecured bond auction was held, raising ZAR 796 million. The bond auction was 3.4 times oversubscribed, and Vukile achieved its lowest margins since launching the DMTN program in 2012.
In conclusion, we are cognizant of the potential interest rate cutting cycle in the short to medium term and expect base rates to continue to reduce over the remainder of FY 2025. The benefits of lower base rates and hedges will take at least 12 months to be fully incorporated in the average cost of debt. Our debt funding is well diversified across several funders, in line with the group's strategy to manage concentration risk and refinance risk. Vukile and Castellana continue to benefit from the very strong relationships with our funding providers, who continue to be highly supportive of our growth strategy, both locally and abroad. We are also exploring a sustainability-linked loan framework for all bank debts to align our funding strategy with our continued commitment to ESG goals. On that note, I'd like to hand back to Laurence for a strategy and transaction update.
Thanks, Lizelle. I think let's start off with the Lar España deal. The expected capital profit there of EUR 70 million. Just remember, that's different from the figure of 82 that Lizelle spoke about. That's based on Spanish GAAP. Really to highlight, what a tremendous investment Lar España has been for us. We invested EUR 130 million. We expect to receive EUR 200 million. At the moment, current thinking is that should happen during the middle of January. We received, in addition to that, EUR 38 million of dividends, EUR 70 million capital appreciation. It's been a tremendous investment, generating an IRR of around 40%.
We have spoken about this before, but in summary, we felt it was appropriate to take the increased offer at ZAR 8.30 a share, instead of getting into what could have become a protracted bidding war, pushing pricing up, and ultimately lowering the yield on the portfolio. We felt that there were better opportunities to redeploy that cash into assets with better yields and much lower risk of execution. I suppose that's the key question: what are we doing with the money from LAR when that comes in? The plan has been to redeploy that into a shopping center called Bonaire in Valencia, which we are buying from Unibail-Rodamco-Westfield.
As luck would have it, agreements had been reached, the deal was imminent, and literally a couple of days before signing, we experienced a tragic flash flooding in Valencia, that impacted on the shopping center, creating , quite a bit of damage, to both the common areas as well as to tenants. A decision was taken with the vendors to postpone the deal, to extend the exclusivity for both parties, to better understand the situation, and to allow a thorough assessment to be done, both by the vendor and by ourselves, to decide if and how to move forward. I'm very pleased to say that significant progress has been made.
We're working exceptionally well with the vendors, very transparently in terms of what is happening. That the news flow is certainly better than expected in terms of the extent of the damage and how long it will take to reinstate the center. All tenants have got access to their stores. They are very keen and eager to get trading again. Remembering this is a very high-performing shopping center. They want to get up and trading, and I think in many cases will result in them potentially upgrading their stores to their later store formats and maybe even extending leases as they invest that money. We are cautiously optimistic that this will resolve positively and constructively. It's something that we're working on, and this is the intended home for the proceeds from LAR.
Obviously, that is contingent on finalizing agreements and working through. As I said, we are cautiously optimistic that this is going to resolve positively, and hopefully that will be in the first few months of 2025, hopefully still within this current financial year. Turning to our broader strategy, I think it is very easy to capture it on this 1 page, and really to talk through that. What you've just heard Alfonso and Itu talk through is the success of our consumer-led model in terms of driving very strong operating results, and that remains at the heart of what we do in South Africa, in Spain, and now in Portugal. In addition to that, we're always looking for opportunities to grow and expand the portfolio, and we are seeing opportunities in all three markets.
I think it's important for me to distinguish between deals that we are looking at proactively, in other words, what we are driving and actively trying to make happen, and deals that we consider reactively, deals that come to us that are maybe more opportunistic in nature, and how we work on them. Certainly at the moment, all of our effort is going on to proactive transactions in our three core markets of South Africa, Spain, and Portugal. We see very significant runway to expand the portfolio further in both Spain and Portugal, and are starting to see more deals coming into focus in South Africa as well. Just to comment on Spain, obviously, the most immediate deal there is Bonaire that we've just spoken about. In Portugal, we've already concluded the first three centers. That was on October 1.
There are a further two centers that we are in advanced negotiations on. Also hoping to close that, close those during the current financial year. Important to stress that the funding is in place for those deals as well. That is sort of really where we see most of our effort going over the next, call it year or two. There is significant growth still in those core markets. On a reactive basis, certainly, I think we're known for our deal-making. We will certainly entertain opportunities if they are presented to us. I think we'll stay very focused in Western Europe and the UK.
The key message I'd like to leave investors with is that proactively, all of our attention is going into only these 3 core markets. Reactively, if something really interesting comes along, we will evaluate it, we'll look, we'll discuss it with the investor base. I think what you can expect from us is further growth in Spain and Portugal and South Africa. In terms of our key focus areas going forward, you've seen the tremendous results coming through from our customer-focused, our consumer-focused model. The more we can embed our shopping centers in the communities in which we operate, capturing the hearts and minds of the communities, the better. You can see the results coming through. That remains really a core pillar of what we're doing. Ultimately, that's gotta drive tremendous operational excellence.
I think that's something that the two teams have done exceedingly well, not only in the past six months, but in the past number of years. I think the business really is in a very strong shape to continue delivering very strong operating results going forward. Our ESG focus is certainly bearing tremendous fruits, and we'll continue ensuring that we are a responsible corporate citizen. A question I got asked earlier in the media briefing was, "Well, what is really driving Vukile's great performance?" I think ultimately it's our people. We have a very strong and unique culture. We want to make sure that we remain an employer of choice, and making sure that our people feel very passionately committed to our business and delivering the results that they have.
Really, it's all about putting that together to make sure that we deliver sustained earnings and dividend growth for our investors. The 6% growth we've just delivered, now remember, is coming off the back of 10% growth last year, and I think it's important to see that compounding effect coming through. We remain investment ready. With a very keen focus on capital allocation and doing deals that are strategically aligned and financially accretive. Turning to prospects for the year, I think we are very upbeat in terms of where the business is positioned. We are well positioned to execute on our growth strategy, both from an operational and a financial perspective. I think the headwinds that have plagued our industry for some time are now turning into tailwinds.
I think that is sort of added impetus to helping the growth. I think our landmark entry into Portugal really is a very significant step in terms of expanding our presence in the Iberian Peninsula and giving further growth impetus and really setting us up for a transformative year overall. All of this being driven by a very strong balance sheet with over ZAR 5 billion of cash available. Therefore, the deals currently being evaluated are already funded. I think, that is a very positive position to be in. All in all, we remain very positive and optimistic about our prospects. We are well on track to deliver growth of between 2% and 4% in FFO per share for the current financial year and 4%-6% in dividends for the full year.
We will be offering investors a DRIP and details will be announced next week. I leave you with a very positive message. We are very optimistic, very positive about the prospects, not only for the remainder of this year, but into the foreseeable future. With that, I'd like to thank you and hand over to questions.
Great. Starting with questions, we have a few from Mweishö Nene at SBG Securities. He asks, "In light of looking at alternative income streams, will Vukile look at third-party asset management or is that not viable in SA currently?
Mweishö, I think third-party asset management is something that probably falls into that reactive, opportunistic, bucket I spoke about earlier. I think we have an open mind to it. It's not something that we are actively pursuing. We do get a number of approaches. In fact, probably more approaches in Spain than we do in South Africa. We would have an open mind to it, but it's certainly not a strategic pillar that we're looking to build out at this stage. We did explore it earlier. We felt that it perhaps might come with some level of distraction from our core portfolio.
Our strong preference is actually to invest our own money, or at least in partnership with somebody where you can earn fees with a partner, but at least you've got an alignment of interests in where you are. The alternative income, that Itu spoke about is more at a mall level, and that is to drive, call it better utilization, better returns from your existing GLA. That could be through cell phone towers, advertising boards, special promotions, sale of fiber, sale of data. It's really making sure that the malls are able to deliver more income in what we're doing. That's really what that slide was talking to.
Another question from Mweishö . Crime has been mentioned twice. Has it notably increased, and has it affected footfall at all?
Itu, can I ask you to please take that one?
Sure. Mweishö, no. I think we haven't seen a notable increase in crime throughout the portfolio. The example that I've made in the slide was Onitsha Mall, and there we've seen footfall increase post the redevelopment. I guess, crime is something that we constantly watch. We understand periods where crime increases, and part of our operating approach is to make sure that, we've got resources on the ground to combat that. On the whole, no specific increases in crime in the portfolio.
Thank you. Another one from Mweishö. May you please share what the pricing was for the Castellana swap that was struck in September 2024?
Lizelle?
Sure. For the new fixed rate loan, the all-in rate is now 4.6%. We're seeing about 100 basis point benefit compared to when the loan was floating for the last 12 months.
Just remember that financial 25 is the year in which that higher cost of debt comes in, for the full 12-month period. That will be in the base from next year. In a sense, that has been a little bit of a drag on this year's growth of the 2%-4%, has been that higher cost of funding.
Great. Then final one from Mweishö is: Does guidance include the additional two Portuguese assets or Reserve Bank rate cuts?
No. Mweishö, the guidance is based on the on the three assets that have been acquired already. It doesn't take into account the two that we are looking at. Does it take into account further rate cuts? I think there's a further 25 pip cut that is built into our numbers.
Final question on the webcast from Thato Kola at Matrix Fund Managers. On Castellana, can you comment if any of the properties were affected by the recent floods in Spain? Additionally, can you comment on the general physical risks of these natural disasters on your facilities and operations?
Sure. None of the existing portfolio was impacted by the floods. The only impact was the prospective asset that we're looking to buy, which was Bonaire, which I've dealt with, but none of the existing assets. I think when one looks at the risk all in all, it's very important to contextualize this. The flood studies that were done, for example, on Bonaire, indicated that this was a 1 in 500 year event. Now, if you consider that from an insurance perspective, insurers, if I understand it correctly, are required to provide capital at a 1 in 200 year event. This is a very extreme tail event that took place. I think it would be erroneous to conclude that this is now gonna become the norm overall.
That being said, we are, as part of our analysis of moving forward, they're doing a forward-looking climate study, taking into account effects of climate change to see if that changes materially. That study is still being done, we don't have the results of that. At the same time, we will be looking at the overall Castellana and South African portfolios more from a climate risk perspective. I think it's important to add that into our analysis going forward. Remember, what happened in Valencia is an entire year's rainfall happened in, I think it was eight or 12 hours. This is a very extreme event. It's a 1 in 500 year event. I don't think one should read too much into it as saying global weather patterns have changed and this is now the norm.
That being said, again, we are currently evaluating it to understand it better, and certainly, we'll feed back once we have more information on the overall portfolio.
There are no further questions on the webcast.
Great. In that case, let me thank everybody for your attendance. We really appreciate it. Let me wish you all a happy festive season. Please stay safe, and look forward to seeing you in 2025.