Great. Good afternoon, everybody, a very warm welcome to our results presentation. Thank you all for attending. For those of you that are attending online, also a very warm welcome to you. If I can please ask any questions you have to please put into the chat and we'll address them at the end of the presentation. As usual, I'd like to start off the presentation by really just contextualizing the group and where our numbers are. Let's just get this clicking through properly. There we are. Where are we sitting today as a group? We're sitting with about ZAR 40.3 billion worth of assets. We operate only in the retail sector. As you know, we know what we do, and we do it well. We don't try and do too many things.
We have got a great tenant mix, and I think that really gets to the quality of the cash flows coming through the business, which to us is always a definition of where quality lies in a property portfolio. Today, we're sitting with about 61% of our assets in Spain, the balance in South Africa. Just to look for a moment at the strategic listed investments, you'll notice that Lar España is now accounting for EUR 3.5 billion of our overall assets. We have increased our stake in the past financial year, and then we've seen some very strong growth in the share price as well, which is up about 30%. In total, we've got about a 47% total return on our investment in Lar España.
At the opposite end of the table, you've got Servest. We went into the financial year owning about 6% of the company. We sold down during the year. At year-end, that was 2.5%, and then post year-end, we've sold the balance. We are now out of that, no longer part of where we felt the strategic value. It's been a tremendous investment for us, and that money has partly been recycled into the increased stake in Lar España and will also go into the rollout of our solar PV. With that as a bit of context around the group, let's jump into the highlights for the year. As you've seen in the commentary, an exceptionally strong result for the year.
We're really happy with what we have been able to produce for the market. Outperforming the upper end of the guidance that we had, so growth in FFO per share of 6.7% and growth in dividends coming in at 10.5%. Really driven by 2 very strong operating results, both in South Africa and in Spain, where I think the fundamentals are coming together superbly. Really what you're seeing is the results of our consumer-led model, bringing increased footfall to the centers, driving sales, driving good performance for our tenants, and that is then translating into growing rentals and ultimately growing value for our shareholders. Itumeleng Mothibeli will talk you through that in a bit more detail. Our balance sheet is looking very strong.
A marginal reduction in LTV to 40.7%. Most importantly is ZAR 5.3 billion worth of liquidity. That is ZAR 2.4 billion of cash balances and ZAR 2.9 billion of undrawn facilities. That ZAR 2.4 billion of cash really is very important in the plans we'll discuss a little bit later on. Before we get into the future-looking stuff, I'm gonna ask Itumeleng to come up and go through the SA numbers in more detail.
Thank you, Lawrence. Good day, everyone. It really does give me a great pleasure to present the South African results for the period ending 31st of March, 2024. The portfolio has really delivered an exceptional set of results in a continuously tough environment. I think to me, really showcasing the defensive nature of our portfolio composition. Also alongside focused asset management initiatives that we not only deployed in the past year, but I think that we've deployed diligently over time to deliver this positive, sustained result. In terms of, you know, going into the highlights, focusing on the performance overview tab, you'll see that our net operating income has grown by 5.4%. We're really delighted with that result.
Key to the sustained growth in the portfolio has been a very strong top-line performance and continued tight cost management control within the portfolio. Perhaps let's go into, you know, some of the key highlights around the top line. Looking at the vacancies, we've seen very strong leasing activity over the past year. Our vacancies have decreased from 2% to 1.9%. These are the lowest vacancies we've ever had. And in addition to that, you know, we've got 3 malls which have retail offices on the first floor. If one were to strip out some of those retail office vacancies, the overall vacancy is decreased to 1.2%, which is an effectively fully let result for the portfolio.
About 2/3 of our malls have vacancies below 1,000 square meters, and a third of our portfolio is fully let. You know, really strong traction that we've seen in our leasing activity. We continue to see improvement in terms of our reversionary rates. You'll see that our reversions are up 2.9% with 87% either positive or flat. To me, I think if one looks at the reversion reprint as an increase from 2.3%, the key highlight is that the quality of the reversions is significantly stronger than what we've seen in the past. This is the best reversion reprint in terms of quality that we've seen since 2018. We continue to see a steady increase in base rentals.
Those are up by 6.6%, and a sustained growth in our contractual escalations up at 6.3%. Really strong top line performance. If I focus on our tenant profile, still talking to the top line, you'll see that our retention ratios improved from 93% to 94%, so really limiting downtime. We're seeing an environment where retailers, you know, are looking to hold on to spaces that they have within our portfolio. We've also seen that retailers are looking to sign longer term leases. Our weighted average lease expiry has increased from 3.2 years to 3.5 years over the year, which is an indication of positive retailer sentiment. Moving on to our net costs to income ratio.
Looking at the cost base, we've maintained our cost to income ratio at 16.8%. If one looks at our long term average, since 2011, that cost to income ratio was 18%. Our cost to income ratio is lower than our long term averages. We anticipate that as we roll out a lot more of our PV, we currently have 21.6 megawatt peak of solar PV within the portfolio. We anticipate that in the next 36 months, that will increase to 40 MW. As we roll that out, we anticipate that our cost to income ratio will decrease by a further 100 basis points. You know, which is, you know, significant achievement in an environment where our costs are generally under pressure.
We've also completed a whole lot of operational strategies to manage our costs, you know, such as we've revised our waste approach. We had a new waste management tender, which resulted in a decrease in our waste management costs. We've increased the level of smart meters that we have in the portfolio by 30%. The higher the smart meters are, the more you can measure, the more you can manage, the more you can recover. We've also installed a lot of water saving facilities within the portfolio, which I'll touch on later on in the presentation. Focusing more on valuations, in line with our net operating income growth of 5.4%, you'll see that our valuations are up at 5.8%, which is a pleasing result.
Still, at a conservative value density of ZAR 20,200 per square meter. Very pleased with where the valuations have ended up. On our trading densities, we've seen an increase of trading densities by 2.4%. If one looks, over the past 2 years, that's increased by 4.3%. I'll go into a bit of detail around the base effects that we saw last year, to explain, you know, where we think these trading densities have landed up. Maybe just to summarize the key operating metrics, you know, really pleased with both the top line performance, in the portfolio, we've seen some significant traction there.
Also, you know, continued the discipline of managing our cost base, to ensure that we not only decrease our cost base, but we manage it in a sustainable manner. The next slide, you know, speaks to the reason why we continue to perform in such, in the way that we do, which is due to, you know, well-positioned defensive, portfolio composition, which remains mostly in the township, rural and value segments. We well diversified across 8 of the 9 provinces. You know, key measures when I look at this slide is, you know, the interplay between the improvement in our tenant retention as well as our WALE, which really points to a picture of increased retailer sentiments and supports towards the portfolio, which is encouraging.
Also, when one looks at our average trading densities, our lower end to sales, as well as our base rentals, there's significant room still available, I think, in this portfolio for increased rentals. Then you'll see under the township column that our retail vacancy is at 1.4%. There's still an opportunity that remains to decrease that further. We're currently doing quite a bit of work at 3 assets, Atlantis, Renbren, KwaMashu, where we're repositioning them. Once we've completed that repositioning exercise, we anticipate that those vacancies will decrease further. When I look at the portfolio key value drivers over time, you'll see that there's been an improvement across the board. Our vacancies have over the past 5 years, decreased from 3% to the 1.9%. Steady increase in base rentals.
I've spoken a little bit to our retail reversions, which have increased from 2.3% to 2.9%. I really want to emphasize that the key story for me there is, when you look at the blue table, that shows a positive reversion, that's at 79%. In the past 5 years, we haven't seen that level of positive reversions in terms of number of leases in the portfolio. Also on the flip side, we're only seeing 13% of negative reversions, the direction is moving in a positive manner. Our contractual escalations at 6.3%. On recent transactions, we've closed escalations at 6.4%. Even there, we're still seeing positive momentum in the portfolio.
With regards to our retail performance and the trading environment, the portfolio has overall seen an increase in both footfall and sales. You know, the base of our shopper support is significant. You know, we see over, well over 175 million visitors within our malls that generate over ZAR 24 billion worth of turnover. The base is already sitting at a level which is significantly high. We've seen 4 of our 5 segments that we manage and measure within the portfolio show increases in trading densities with our township and urban portfolios showing the most consistent trade throughout the year. Assets in Gauteng, Western Cape, and the Northwest were the best performing in terms of trading stats and footfall overall.
Over the period of Jan and Feb, you know, we saw the increase in load shedding during trading hours, and that somehow, you know, impacted some of our trade, but overall, you know, still a positive print in terms of our turnovers and over the year. With regards to our retail category performance, you know, the portfolio is under 2.4%. Really wanna talk a little bit to, you know, the base effects that happened in KZN in the prior year. You'd remember that we had a few assets that were damaged in the riots in financial year 2023. Those were reinstated, last year we saw significant turnover growth in KZN.
That was due to competitors in and around our areas, you know, taking longer to reinstate, and therefore the base was artificially high. Some of those, as our competitors have opened, have now, you know, kind of moved back and rebased. If one had to exclude the KZN anomaly, at looking at our trading density, you'll see that, you know, our portfolio has grown by 4.3%. 10 of our 14 categories, which we measure within the portfolio, have shown growth both on turnover and trading densities. Health and beauty, bottle stores and our pharmacies continue to be the best performing segments within the portfolio.
A key insight, I think, is, you know, looking at our fashion and grocery categories, which are our 2 biggest categories, growing at 0.9%, respectively over the year. You know, there's a significant divergence that's starting to form amongst winners and losers within these categories. For instance, within our fashion category, you know, the overall category grew by 0.9%, but there were some winners that were up by 8% and some that were down by -11%. In the grocery space, you know, there's some grocery anchors that are up by 8%-10%, and some were down by 3%.
I think, you know, looking at how we manage our portfolio, our deep data-driven MIS, analyzing underperformers, understanding our consumer, will be a lot more discerning around, you know, the support of the winners in the categories that will show a growth trajectory. Yeah, with regards to our leasing activity, this to me has been the key highlight of the past year. Strong support from retailers. I actually think that our relationships with retailers is probably the strongest that we've ever had since I've been at Vukile. We've really worked hard at building those relationships. We've seen strong support from our national and our mid-tier retailers over the year, both from a new deal perspective as well as renewals.
The township and rural portfolio, once again, where most of our support came from, hence the negligible vacancies that you see in that space. We continue to see significant support from our top 10 retailers, and fashion contributed the most to our deals. If you focus on the graphic on the right, you'll see, you know, leases that we concluded, 609. We've increased the quantum of the deals that we've done in this year relative to last year from ZAR 1.4 billion to ZAR 1.5 billion. Our weighted average lease expiry has improved from 3.8 to 4.4. Really seeing retailers sign longer term leases within the portfolio.
When I look ahead in terms of, you know, the next 6 months, and I look at our expiries, and the retailers that are expiring in the next 6 months, you're definitely seeing an environment of, you know, those retailers showing growth in trading densities, which should all go well for continued growth in our rental reversions. Customer centricity is a primary operational desire within our portfolio to really look to delight our consumers. You know, in addition to the customer centricity scorecard that we shared with you at this point last year, we really look to explore a lot of different approaches in our customer centricity desk. Here we explore, you know, looking at consumer Google reviews to really gauge the sentiment of our consumers within the mall environment.
We compare that with, what we call shoppability, which is looking at loyalty, dwell time using the technology that we have in the malls, called access points. Once we understand, you know, the comparison between the reviews and shoppability, we then put together promotions that really speak to that. You know, the way that we look at it, to really understand the sentiment of the shopper, we listen to what consumers say, we observe how they act, and then we reward them with the call for action. You know, one of the key issues that came across in the past year is in East Rand Mall. In the Google reviews, we kept on seeing this issue of expensive parking. We really explored this. We reviewed our tariffs. We introduced, you know, a flat fee after 2 hours.
We upgraded our equipment. We ran a lot more promotions, you know, that show how efficient and easy it is to use our parking. We restructured our parking and we're now looking at our shoppability to potentially see that loyalty and dwell time increase over the next couple of months. Which again speaks to this whole element of saying, if the consumer is happy and the consumer is comfortable within the shopping environment, you should see, you know, the tenants benefit, and if the tenant benefits, the valuation of the property increases. Second. All right. On CSR. CSR is very important to how we do business. We really do believe in the adage that we're not an island of prosperity in a sea of poverty.
We really endeavor to work with our communities to combat social ills, particularly in the markets in which we operate in. To that effect, we spend 15%-20% of our marketing budget on CSR. This equates to about ZAR 2.5 million-ZAR 3 million a year. You know, we have done quite a few projects at our different malls and shopping centers, such as supporting senior citizens, women and youth, focusing on challenges around substance abuse, and really assisting with unemployment. You know, dealing issues like CSI to us is critically important because we form forums that involve, you know, the communities, that involve the counselors, that involve community leaders that help us spend, you know, the budget that we have allocated.
When things like challenges, you know, like riots come up, you've then built a rapport with the community and it works out, you know, very well in terms of the community buying into the center. We view our CSI approach and budget as part of our customer-centric approach. We also run, you know, specific promotions that speak to the markets in which we operate in. We don't have a cookie cutter where we run the same promotion across all of our malls. On the left-hand side, you'll see at Thavhani Mall, we ran in February a very big campaign during the AFCON semifinal, South Africa and Nigeria. You know, the community really loves football, where we screened the football game.
We linked that to making sure that all of our food services trade later. They service, you know, the crowd that was there, and they, you know, get the orders and they deliver. I think, you know, a symbiotic type approach that ensures that the mall trades well, but also provides a service to the community. Also ran a very successful campaign in Tzaneen. Tzaneen is known as the capital of boxing in South Africa. Have over 25 international champions. We've set up what we call a hall of fame, where we've got a list of all of the champions that come from the township.
Really, you know, as you walk inside the main entrance of the mall, you can really see everyone's, you know, that they feel that the mall is part of the community because of such such initiatives. We do that at a lot of our malls. We really try and find promotions that speak to, you know, the populace and what they hold dear. We execute and run those promotions to ensure that, you know, the mall gets support. Just delving deeper into our cost-to-income ratio. You know, we have strategies for every line item that you see in our cost base. At our last results, we had a discussion around our rates and taxes.
This time we're focusing a lot more on our cleaning and security, which we recently went out on tender for. You know, the approach that we took was really to change our scope that we went out on tender for. We learned a lot of lessons coming out of, you know, the riots in 2021 around making sure that you use a lot more technology, you lock down the mall. We've got innovative strategies around CCTV, facial recognition, biometrics, and all of that has decreased the overall cost of our soft services in a sustainable manner. Here we anticipate, you know, receiving a saving of close to 10% on our overall security and cleaning cost line item.
You know, we run these types of approaches for pretty much all of the line items. If you look at the table on the right, you'll see that in financial year 2013, our cost-to-income ratio was at 27.1%. That's now decreased to 16.8%. You know, whatever strategy we put in place, we always just make sure that it's sustainable. The leader currently in terms of managing our net expenses has been our solar PV strategy, which has worked out, you know, very well for us. Going into the solar strategy in terms of our energy and sustainability, we generate 18% of the portfolio's electricity through renewables. In March last year, we had 14.9 megs. That's now increased to 21.6.
In the next year it will increase further to 32.6, and we anticipate that by the end of financial year 2027, we would have exhausted all of the roof space that we have within our malls, and we'll have 41.4 megawatt peak of solar PV on our roofs, which will account for 33% of our portfolio capacity. Right. The next frontier, once we've exhausted our roof space, is really, you know, exploring wheeling. When one looks at PV tariffs, wheeling, Eskom and council tariffs, you'll see that this is a big opportunity for us to explore this. We're currently working on this 5 megawatt plant wheeling agreement, and once that's executed, we'll look to roll that out into the rest of the portfolio.
We're also very excited that we've launched our BESS system, 4.4 megawatt BESS, which we installed at Nonesi. It's now fully operational. The mall's got full backup. Whether there's load shedding or there's not, there's still a benefit because we have a reduction in our overall demand charge. It's been a sustainable way of us, you know, looking to intervene with some of the energy challenges, but to do it in a way that is sustainable looking forward. We continue to see around water deterioration and water across the country, so in 8 of the 9 provinces. This is a big challenge that we're starting to see. As a team, we've made a strategic call to really look to build capacity in this space.
Similar to how we did with our PV strategy 8 years ago, we've really built it up to what it is at the moment. We're spending a lot of time, effort, energy, and thinking around strategically placing our water management in a way that gears this portfolio for, you know, for sustainability into the future. The strategy currently encompasses, you know, really looking at our water use licenses so that we can not only use our water that we get from boreholes, for domestic use, but we can also use it for commercial use. We've drilled a lot more boreholes within the portfolio. We've supplemented that with filtration. And at this point in time, 91% of all of our malls have at least 3 days backup water, across the portfolio.
The one area where we've always felt is particularly vulnerable has been our rural portfolio. 100% of all of our rural assets have backup water, so that's already covered. We will continue, you know, putting a lot of effort into our water management, and we think, just as, you know, we moved our electricity from a cost center to a profit center, there lies an opportunity for us to look at water management and potentially move that into some sort of profit center as well. Just an update on Mall of Mthatha. We've renamed BT Ngebs City, which we bought and transferred in April 2024 to Mall of Mthatha.
The transfer process took 18 months, quite a bit of time, because, you know, we had quite a bit of town planning work to do to subdivide the earth of, you know, where the same earth had the casino and the hotel and the mall, and we were just looking to purchase the mall. The redevelopment is underway. We started it now in June. We will aim to have it completed by February 2025. You know, we're looking to spend circa ZAR 100 million from a Vukile perspective, the total cost of the redevelopment will be about ZAR 200 million.
What we're trying to achieve with the redevelopment is, you know, the right sizing of tenants, a lot of the asset management work that we've done across the portfolio, improving flow, you know, adding an additional anchor, setting up a lifestyle element, because in Umtata, you know, that's something that the community doesn't have. To date, we've concluded over 4,000 squares worth of deals, you know, new deals above budget. If you look at the graphic, where the Edgars is, you know, that entire box was Edgars. We've subdivided it into Dischem, Game, and Jet. The through rental on the entire box when we acquired the site was about ZAR 100. You know, the entire box through rental now is at about ZAR 160.
That's the type of value add that we will look to add to this asset, and really excited about where, you know, we'll take it into the future. As far as the valuations, you know, we've got the 32 properties valued at ZAR 15 billion. As I said initially, a 5.8% increase in our valuation and a very conservative value density. I always just highlight, you know, when we get to the valuation tab that when you look at reasonability checks such as yield, you look at disposals versus book, you look at our correlation of our valuation growth and our NOI growth, you look at our value density versus our replacement costs. You know, all of these measures consistently, you know, point to a conservatively valued portfolio. We're very comfortable with where the portfolio is valued.
Looking forward, key focus areas are really, you know, to continue our tight operational focus. You know, this is what wakes us up in the morning. This is what we do well. We'll continue looking to delight our customers, and really, you know, have them come to our malls as a primary shopping destination, which will then, you know, result in us delivering our results. Maybe just to conclude before I hand over to Alfonso. You know, the portfolio really continues to outperform. We're very pleased with the top line that the portfolio's delivered. We'll continue to look at managing our costs, more efficient, as efficiently as we've done in the past. We'll continue to drive this desire to be a partner of choice in well-managed, well-positioned malls.
All this, being mindful of our consumer as primary stakeholder. Without any further ado, thank you for your attention, and I'd like to call Alfonso to take us through Castellana.
Thank you, Vito. Congratulations again for such great performance in the South African portfolio. Hola. Spanish, good afternoon, everybody. always happy to be back in South Africa and I am always grateful with everyone's welcome and the goodbye I always see here in South Africa. I would like to highlight that I am especially proud of the group team that have made a great effort to produce this spectacular set of results for the year-end FY 2024. it looks like a habit by now, let me tell you, the consistently solid and positive Spanish results don't come along or by miracle.
There is a tremendous work and effort behind the scenes from a cohesive and extremely committed team with a clear purpose and mission to keep Castellana as a market leader. Jumping into the presentation as an economic update, I would like just to highlight some points quickly. Spanish economy since December has evolved quite positive. One of the European economies most growing. It is expected for GDP to stay positive in this 2024, closing the year on 2.1% according to consensus last review of May. The strength of the labor market, with the job occupancy figures growing and unemployment being kept at levels below 12%, is keeping disposable income of the families at high levels. Adding to all this, that tourism in Spain broke a new record in 2023, surpassing 85 million foreign visitors.
Being this the other large driver of consumption in our country, Spain is keeping very healthy consumption growth rates, which is pushing the GDP to grow above most of the other European countries. Now that ECB is to start cutting interest rates, hopefully tomorrow, we believe operations will remain very positive. Now that clouds over retail have dissipated, we are seeing a lot of opportunity coming to the market that we should be taking advantage of. Now moving to the key portfolio metrics. Here I want to highlight the astonishing recurrent or normalized net operating income growth of 11% versus last year. This income growth and value-added projects remain to be the main drivers to keep a rather small growth in GAV, as valuers have kept increasing discount rates and exit yields.
We'll see this later in a specific slide on valuations. We keep very defensive and healthy tenant profile, with 95% of our tenants base being national and international best-in-class brands, with a very solid WALE of 12.6 years, and still low OCRs and low average base rentals. Occupancy at 99% and collection rate over 99%, both ratios way above the sector benchmarks, show high demand from tenants on our portfolio and a great performance of our rent collection team. As you can see, outstandingly positive growth indicators, which allow us to keep signing leases and increase reversions, confirming the strength and solidity of our portfolio and hence the sustainability of our cash flows, which I think is the most important factor in real estate at the end.
Now focusing on fundamental indicators of our business, footfall and sales. These indicators also show a fantastic performance. As advanced in our pre-closing session, we show here the recovery index that we started back in the pandemic. What we see in the graph is the evolution of footfall and sales during the financial year in reference to the previous record year pre-pandemic, that was 2019. We said so in December when presented half-year results that we anticipated another footfall record for the year end. Indeed, footfall broke a new record during the period, within the period, with 45 million visits. That is 5.5% higher than FY 2023, which was already a record year. Sales in the period grew by 6.4%, keeping the positive tendency showed in the last 3 years.
Shopping center sales grew a little more than retail parks as they were coming from a much higher base in the last 2 years. Focusing on sales, if we look at it by sectors, we see all categories growing substantially. All of them in very positive territory, especially our key categories by rent weight, such as fashion, with 6.1% growth, healthy and beauty with almost 12% growth, or cultural and technology with an impressive 17%. Special mention also deserves 12, F&B and leisure as our bet on increasing their weight in our shopping centers is confirming our strategy right. An outstanding result that reflects the efforts of the active asset management activities across the portfolio on the completed and ongoing value-added projects that we have.
At leasing activity level, between April 1st, 2023 and March 31st of this year, 182 rental transactions have been signed. 111 new contracts and 71 renewals involving an area of almost 34,000 sq m, which have led to a new and refreshed rent signed for a value of EUR 9.1 million per year. Which results in a 9.73% increase in the average rent per square meter of these transacted units. Please note, as mentioned in past occasions, that figure does not include indexation, which we'll add in the coming months. We keep an enviable portfolio occupancy of 99%, leading the market, as well as leading rent collections rates, as I said before, above 99%, well above the industry average.
Moving on, here we can see the gross rental income bridge, in a like-for-like basis, of the same portfolio and same period of time. Gross rentals have grown by almost 9% in comparative terms with respect to FY 2023. This gross income translate to an NOI growth of also 11% versus last financial year. At fully let capacity and the work in progress value-added projects completed, the portfolio should generate gross rental income of EUR 77 million annually. We expect this to come real in FY 2026. As for the GAV bridge here, total growth for the period of 7.4% is made by 6% coming from the Lar España investment value increase and 1.4% growth in direct portfolio, despite another hike in exit yields in this valuation cycle.
Talking about valuation, as you know, Castellana is externally valued by Colliers, a prestigious and renowned European valuation firm. They conduct valuation cycles every 6 months. Despite the increase of 1.4% in the portfolio for the period, the fact is that the value that the team has been creating in terms of NOI growth along the periods, as it can be seen in the left-hand side graph, is not being reflected into the valuations as yields, which are the largest driver of value at the end, have kept expanding as for the lack of transactions in the market. Shown in the graphs on the right in this slide, one can see that the increments on cap rates and exit yields since 2019 have gone up all the time, no?
I have to say that our work in the assets, adding value and quality is already embedded in those deals that would have expanded much more in the case we left those assets unattended, with no CapEx, nor value-added repositioning projects. The current positive valuation results are a combination of increasing income and increasing quality of the assets that still translates in almost flat values that are set to increase when the market is back to normality and cap rates reduced, which should happen as soon as interest rates are cut. As stated before, a great deal of our differentiation, and hence, great performance, in footfall, and consequently in sales, is 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, stay longer, spend more, and become fans of our shopping centers. On top, we insist on strengthening our shopping center as social engines. We continue to focus on bringing new events and experiences to our shopping centers that make our customers visit unforgettable moments. Proof of this are the 2 roadshow events, you see there in the slide. The Legend of Excalibur, which toured the entire portfolio in 2023 with different shows, games, and medieval activities, achieving growth of 11.6% in attendance versus the same period of the previous year. La Fábrica de Chocolate or Willy Wonka, which is currently browsing our portfolio with impressive results.
We have already achieved more than 153,000 visits in just 3 shopping centers, and the feedback from those who visited is more than satisfactory as well. The customer journey does not only happen in the shopping center. In our continued commitment now to digitalization and innovation, Castellana Properties has launched in February 2024, a 2.0 update of its websites and apps. After this update, we can say that we have a pioneering tool in the industry in Spain. We think that we are in the right path towards digitalization and innovation. We have started our road to AI already in several aspects of our business, and I hope I can tell you more about it at the FY25 half year results presentation.
Another differentiation factor of our business is how we care for assets and how we invest on them to increase income and improve their quality. As you know, by now, we are always busy with the creative projects in the portfolio. We very much like them, we believe that the market appreciates how experienced we are on them. Our start project now is the reconfiguration of the former Hipercor in El Faro, it's advancing well and in time. With an investment of just about EUR 22 million, we create a newer space of almost 18,000 square meters and will be generating EUR 2.5 million of additional NOI at the same time by reinforcing El Faro with a more optimal tenant mix.
As we speak, almost 100% of the space is already under head of terms, negotiating the nuance terms of the contracts. Already licensed and under works, we estimate to have it completed by December this year, 2024. On Vallsur's first floor reconfiguration, this project will generate ZAR 1 million extra NOI with a much better look and retail mix on the first floor. phase I has already been completed. We are seeing the results on what we envisioned. Highlight again, the extraordinary performance of La Chismeria, the new food court area, that opened in last December. Fully led and trading, it has impacted so positively in the center that Vallsur has overpassed already the 2019 figures of footfall in the last months, thanks to it.
Not only that, now that we are able to measure it, we've seen how Vallsur's dwell time has grown by 7% from last year as the food offer in La Chismeria is making customers to stay longer in the center. Phase 2 is progressing well, with well-advanced negotiations with several demanded fashion retailers such as Álvaro Moreno or Fifty Factory as anchors of the area. We expect for this phase 2 to be open and trading by year-end. Third project, already in motion, is the second phase of Los Arcos. Once completed phase 1, the next step coming from our customer surveys is to improve the F&B and leisure offer with an improvement and modernized area.
We bought the empty office building at the front of the center back in 2021. Now we are ready for the integration of that space into the shopping center. Creating a state-of-the-art leisure area that, apart from incrementing NOI, it will be transformative for the footfall and dwell time, which should also imply more and better sales, hence, value improvement. We are investing almost EUR 24 million here, transforming the center in the reference of the city of Seville. We will be completing this project by end of next year, 2025. Now moving on to our investment in Lar España. It can't be denied that this has been a clever and very accretive investment with a dividend yield for this period of almost 15%. Lar España, in line with the industry, is publishing very solid results.
It has delivered a total dividend of EUR 66.2 million this year, from which Castellana has received already EUR 19 million for our 28.7% share on the company. With a strong balance sheet, reduced LTV, and cash on hand, Lar is very well positioned for future growth opportunities and Castellana should benefit from. We continue to be long-term investors in Lar España, expecting an attractive yield coming forward and potential for capital growth through the narrowing of the discount enough now that market looks to be improving. Moving to on ESG, I'd like to highlight the work already done in such a small period of time that has already put Castellana on the ESG leaders list.
In support of our commitment and excellency, excellence in ESG matters, we have the most notable certificates in the sector which validate our performance and consolidate our position as leaders. During FY 2024, we have designed a new strategy, ESG strategy, that will span FY 2025 to FY 2029. In the environmental field, we have achieved excellent results. Some of the most significant KPIs compared to the previous years, such as 88% less consumption of natural gas or 95% of the energy consumed comes from renewable sources. All of this, plus all the measures to be carried out going forward, will be reflected in the FY 2024 ESG report that we will publishing during this month. Our commitment is very well reflected in the social part of our plan on sustainability.
We continuously strengthen our commitment on supporting the communities around us, making social programs visible through innovative actions and initiatives to generate a positive impact in those regions in which we are present. In this FY 2024, our shopping centers have carried out a total of 165 social actions. The total amount donated by Castellana surpasses EUR 310,000 in total. Now to end up, key focus areas, well, operationally, we will continue to excel in our operations and increase in income with a strong focus on the value-added projects that we have in motion. We have a stable funding position with no refinancing needed until FY 2026.
However, we have spotted now a very good opportunity to refinance Vest portfolio, which is our next maturity, and we are working to close it by end of July, the latest. We will continue to work on the diversification on funding sources going forward. On investments, we will continue to secure deals on the direct market. There is a clear window of opportunity for Castellana to grow accretively, and we continue to unlock maximum value on Lar España as well. We continue to develop and implementing our ESG and innovation strategies. On the people side, we will keep up the marvelous climate and company culture already existing in our team. We will implement the Castellana talent program to keep evolving and improving processes and skills on the team.
With this, I end that the Spanish part. Many thanks for your attention. Now pass it over to Lisa on the treasury and financials. Thank you.
Good afternoon, everyone. I'm very excited to be here today, not only because it's the first time that I'm presenting the Vukile results, but also because our FY 2024 numbers are particularly positive. Vukile has delivered yet another set of strong financial results. We outperformed the upper end of our upgraded full year guidance, achieving a 10.5% growth in dividend per share and 6.7% growth in FFO per share. Our outperformance was underpinned by strong operational performance in South Africa and Spain, and a higher than anticipated dividend from Lar España. Our income from Spain also benefited from the weaker Rand exchange rates against the euro. Notwithstanding the impressive growth in dividend per share, our payout ratio as a percentage of total group FFO reduced slightly from 81% to 79%.
We maintain our payout ratio at a level that ensures no tax leakage in South Africa and Spain, and at a level that ensures that we retain cash for operational CapEx and ongoing reinvestment in the portfolio. As Itumeleng mentioned, the South African retail portfolio, which accounts for 97% of the portfolio by value, delivered like for like growth in net operating income of 5.4%. Excluding the impact of exchange rate movements, Castellana's normalized net operating income increased by 11%, primarily due to positive rental reversions and accretion from value-added projects. Income from Castellana was further augmented by a weakening of the exchange rates. During the year, Castellana acquired an additional 3% shareholding in Lar España for EUR 15.5 million, increasing its shareholding to 28.7%.
La España declared a dividend of EUR 0.79 per share for its financial year ending 31 December 2023. Included in the EUR 0.79 is an extraordinary dividend of EUR 0.09 per share that is attributable to 50% of the capital gains from asset sales. In FY 2025, the EUR 0.70 ordinary dividend plus the EUR 0.09 extraordinary dividend will be included in our FFO in line with the cash received. No income from La España was included in Vukile and Castellana's IFRS income for FY 2024, since La España only declared their dividend after the Vukile year-end. As such, income from La España of EUR 17 million is included in our FY 2024 results by means of an accrual through a non-IFRS adjustment. This anomaly relating to the timing of the La España dividend declaration has resulted in a reduction of our IFRS profits.
If in future years, Lar España continues to declare their dividends in April of each year, then the variance relating to the IFRS income from Lar España should normalize. During the year, Vukile also purchased Meritz remaining shares in Castellana, increasing Vukile's interest from 89.8% to 99.5%. Vukile's increased shareholding has expanded our strategic options for the Spanish business and effectively increased Vukile's indirect stake in Lar España. We also continued our asset recycling strategy, exiting non-core assets and allocating the proceeds to assets aligned with our core strategy. During the year, we reduced our Fairvest shareholding from 6% to 2.5%, and fully exited our investments in Fairvest shortly after year-end. The year-over-year increase in corporate costs in both South Africa and Spain is mainly attributable to the rollout of marketing and advertising campaigns, as well as staff-related costs.
Apart from an inflationary increase, staff-related costs increased due to additional staff to facilitate succession planning. Net asset value per share increased by 5.2% to ZAR 21.55 as a result of strong operational performance and the increase in the fair value of our investment property. The 47% increase in Lar España share price also had a positive impact on the net asset value, coupled with the impact of foreign exchange rate movements. Vukile ended the year with cash in excess of ZAR 2 billion. One can see from the graph that cash from operating activities far exceeded the total annual dividend payments.
During the year, ZAR 1.7 billion was raised from share issuances, part of which was used to exercise the call option to acquire the additional shares in Castellana from Meritz, as well as to acquire an additional 2.5 million shares in Lar España. The strong cash position further supports Vukile's balance sheet, which is very well positioned for growth. The ratio of cash and undrawn committed facilities to dates expiring in the next 12 months is 6.4 times, which demonstrates Vukile's strong liquidity position with more than sufficient cash to repay dates expiring over the next 12 months if required. Despite a challenging market with persistent high interest rates, we closed the year with a sound balance sheet, well-managed finances, and solid credit metrics.
GCR reaffirmed Vukile's long-term credit rating of AA, and Fitch reaffirmed Castellana's rating of BBB-, which is an international investment-grade rating. During the year, our interest rate hedge ratio reduced from 89% to 59%, primarily due to the expiry of the fix relating to the syndicated loan in Castellana of EUR 256 million. Terms regarding the refinancing of the loan have been finalized, with implementation expected in Q3 of this year, which would be 12 months prior to expiry of the date. The intention would be to fix the loan. As such, post the refinance, the hedging ratio will exceed 75%. We're therefore comfortable that the lower hedge ratio is temporary in nature.
For FY 2024, the group's average cost of funding increased from 5.3% to 5.5% as a result of increased base rates in both South Africa and Spain, due to Castellana's fix that expired in September. For the same reason, there was a reduction in interest cover ratio to 2.3 times. We continue to monitor interest rates closely, while they appear to be staying higher for longer, we are doing well to manage interest rate risk through the peak of the interest rate cycle. At year-end, consolidated group loan to value was 40.7%, which is comfortably within our covenant levels of 50% for South Africa and 65% in Spain.
It is important to note that Castellana's debt has no recourse to the Vukile balance sheet, and Castellana's assets would need to undergo an aggregate 40% reduction in valuation before reaching Castellana's 65% LTV covenant. The reduction in group loan to value was primarily as a result of the ZAR 1.7 billion equity insurances during the year, the increase in property valuations, and the 47% increase in share price of Lar España. A detailed sensitivity of the LTV to both property valuations and foreign exchange rate movements can be found in the appendix on slide 118. Vukile is well-positioned for growth through the lower LTV and strong liquidity. As part of the group's funding strategy, Vukile proactively manages its debt expiry profile, which is currently at 2.9 years, with only 4.4% of group debt expiring in FY25.
On this graph, the large green bar in FY 2026 relates to Castellana's syndicated loan, which is in the process of being refinanced. Post the refinance, the next Castellana debt maturity will only be in FY 2029. During the year, Vukile successfully concluded 2 oversubscribed and secured bond insurances. In August, we raised ZAR 526 million at margins better than guidance. In February, we then raised a further ZAR 1 billion through a well-supported bond insurance, achieving Vukile's lowest margins since launching the DCM program in 2012. As part of the February bond insurance, Vukile also issued a 7 year bond for the very first time. In conclusion, balance sheet and treasury risk management remains one of Vukile's key focus areas. 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 very strong relationships with our funding providers, who continue to be highly supportive of our growth strategy, both locally and abroad. Post year-end, ZAR 1.1 billion of funding was restructured through an innovative green loan and sustainability-linked loan with Absa, aligning our funding strategy with our ESG goals. On that note, I'd like to hand over to Lawrence to take us through the strategy and the transaction update.
Thanks, Lizelle, congratulations on your maiden set of results, we look forward to many more presentations and even better results. Thank you. Let's start off quickly on ESG. I'm very pleased to say that ESG has really become embedded in the operations of Vukile. We've made very good progress over the year across all 3 pillars, and that's in both markets in South Africa and Spain. Izzy has already spoken about the achievements and objectives in South Africa in terms of PV. In Castellana, we've started a joint venture called Castellana Green, that will have its first plant up and running in the second half of this year. Water, as we've mentioned, is becoming a greater concern. I think we're trying to manage that proactively and have made very good progress in that regard.
From a Spanish portfolio point of view, all the assets are being service certified. From a social perspective, I think the highlight for us is always our Vukile Academy. We're exceptionally proud of the 100% placement record of everybody who's been through our program. To continue contributing towards the growth of the industry by providing an excess of 50 scholarships per annum for people in final property year studies. Our BE level improved to Level 3 in the year. As we've spoken about, we really feel that one of our key differentiators is our culture and values in Vukile. I think testament to that is the results of the Deloitte survey, the GIBS Ethics Barometer, and the Great Place To Work certification in Castellana.
From a governance perspective, the board refresh process is well underway with the latest appointment of Neo Dongwana. Now we are able to start rolling off longer-standing directors, and that will happen over the next couple of years. Good transformation at a board level with 60% of our non-execs being Black, 50% of whom are female. Castellana, very good progress on GRESB, getting a 4 out of 5-star rating, and improvements on the SA portfolio as well. Now like to move on to strategy and the plans going forward. To do that, I'd like to take a step back and look back briefly at the last 20 years since Vukile has listed, and just run through a bit of the history as to how we've got to where we are.
I think it's very important because it highlights our strategy in action, what we have been doing and how we have now laid the foundation for what we see as the plans going forward. Vukile listed 20 years ago in June 2004 with a portfolio of ZAR 3 billion, that was spun out of Sanlam, which was really a diversified portfolio of B and C grade buildings. In 2011, we had a look at the business and said, really, we needed to take the business in a new direction. That was when we crafted what we called the Awaken the Potential Within Strategy. That had 6 components to it.
Number 1 , was to increase the scale of the business, grow the GAV to around ZAR 10 billion, which is what we felt at the time would be needed to be relevant. Go overweight the retail sector, which we've always felt has been the best performing sector in South Africa. We're also very big believers in specialization as opposed to diversified funds. Improving the quality of the portfolio. When I joined, I think we had an average asset size of ZAR 70 million. Today, it's ZAR 470 million in South Africa and EUR 1.2 billion in Spain. We needed to maintain a strong balance sheet, which we've done.
Keep growing the earnings, which we've done every year other than the COVID year, but we have paid dividends in every year in the past 20, and also grow our investor base, where we initially had an overweight weighting from Sanlam, held, I think, around 50% of the fund, and we've now got a blue-chip shareholder register. Very pleased to say that every one of these objectives has been met, and you'll see how that progresses over time. 2014, I think was sort of the first year that we got to the kind of scale that we were talking about of ZAR 10 billion. I'll say the sort of most significant things happening in that year was the acquisition of the 34% of Synergy Income Fund. That was the first time Vukile started playing in corporate activity.
I think very important, because you will recall at the time, we said, "It will take us time to unlock the value in this asset, but we have secured a great portfolio, and we will unlock the value with patience and moving forward." You will see how that has played out. The 32% stake in Fairvest, which has been a tremendous investment for us over the years. We acquired 50% of East Rand Mall and also did our BEE deal with Encha, who continue to be very committed partners of ours. Moving on to 2016. 2 important things here. Firstly, have a look on the top pie chart, how you can now see retail has gone overweight. We have now ticked the box of size of the portfolio at ZAR 16 billion. We overweight the retail sector.
That was also the time in which we started saying, "Well, how about expanding the business offshore?" We were able to acquire that stake in Atlantic Leaf, which at the time we thought was going to be the vehicle that we would use for our growth offshore. We also continued to acquire in South Africa, being Moruleng, Nenesi and Bedworth. We come on to 2017, which I think is probably the most significant year in the history of Vukile. That is because 2 major things happened in that year. Number 1, is we took the strategic decision, I think ahead of the market, to exit the office and industrial sector completely. We did that by implementing a landmark transaction, what we call the Synergy/ GemGrow asset swap deal.
What we had at the time was Synergy, which was 100% retail. We bought those assets into Vukile, and we paid for them with the office and industrial assets that we put into Gemgrow together with Arrowhead. Ultimately led to the merger of Arrowhead and Gemgrow that we were quite involved in. Ultimately then to the merger of Fairvest and Arrowhead, which we're again, very involved in behind the scenes, and now ultimately our exit. Really what you're seeing is the patience that we've taken in buying Synergy and unlocking the value. Assets such as Maluti, Guguletu, were assets that came out of the Synergy portfolio, and that was very good. That's important because really what it shows is that we are very comfortable in the deal environment, in corporate finance, and we have patience.
We don't believe in having to rush deals. It's about getting the right deals and taking time to unlock the value. The other key issue that took place at the time in 2017 was the decision to enter the Spanish market. If I were to summarize what the investment case was, it was going into an environment that had a strong macroeconomic recovery, forecast to outperform the EU in terms of GDP growth, personal consumption expenditure. Also, unemployment starting to drop from a peak of around 24%-25% and growing tourism. You also have a market that is very fragmented from an ownership perspective.
We felt that if we could enter the market and be a consolidator and buy under-managed assets and add value to them with our bottom-up property expertise that we've done in South Africa, we could create a winning strategy in Spain. We then acquired 87% of the fledgling Castellana, which at the time was an office and 2 small office assets, and the story will continue on the next slide. What you can now see in 2018 is really how we start achieving many of the goals we'd set for ourselves. The fund is now 95% retail. You can see how that's taking place. You can start seeing the growth of the offshore exposure. That was the debut acquisition of our 11 retail parks, and Spain followed up with 2 smaller assets.
At the same time, we hired Alfonso and some colleagues as the Castellana team. It's quite amazing and a source of great pride for us to sit down and say what really started in 2018, today is now the fifth-largest landlord in Spain with a phenomenal portfolio and exceptional track record leading the market in terms of performance. What's also very important to look out for here is that we've never taken our eye off the South African market. We continued with the major redevelopments of Maluti and Pinecrest and also acquired 33% of Tivani Mall. 2019, I think is when the scale starts coming into the Spanish strategy. That was the EUR 500 million acquisition of the 4 assets from Unibail.
At the time, there were questions of saying, could we be able to add value to assets being bought from such a sophisticated player in the market? I think when one looks at the assets today and you see the value that Alfonso and his team have added to them, you can see that we really have been able to add value to those assets. Again, strategically, you can now see almost 100% retail and 45% of the assets offshore. Again, continue to look to buy the right assets in South Africa, as we did with Colonnade, which has been a great investment for us. Brings us to where we are today.
ZAR 40.3 billion of assets, almost 100% retail, 61% of the assets offshore, and that includes our 28.7% stake in Castellana, which provides a lot of optionality. All in all, I think what you can see is that as a team, when we set a strategy and say what we're going to deliver on, we make sure that we deliver on that. I think this set of graphs shows that very clearly how we went from a diversified fund to pure retail, small player, to a much more substantial player with a very large component, offshore. Another platform is very well established, for us to take our retail focus, our consumer-led model, a strong operational metrics, clear strategic direction, and look to launch the next phase of that growth strategy.
What is that next phase and what does that look like? Number 1, the strategy is to be a consumer-focused retail real estate business. Our consumer-led model is what we think sets us apart to some other players in the market. Really, it's as simple as this. By focusing on the consumers and the communities that we service, we understand what those needs are. We look to meet and exceed those needs by providing great places for them to come and visit. That, in turn, provides a great place for our tenants to thrive in. As they do so, their performance improves, their profitability improves, that then creates opportunity for us to drive rental growth, which is really what you've seen in these results, that, in turn, drives value for our shareholders.
Ultimately, this is a strategy that is a scalable strategy. It can be applied in any market that we move into. We need to make sure then that we just focus on that local consumer, understand that consumer. You can see then how the strategy is scalable and can be moved into multiple markets. We've got a very, very clear and consistent strategy. What do we do? We apply that to the core portfolio in South Africa and Spain, make sure we keep delivering great results, and then we keep looking for opportunities to grow and expand the business. In South Africa, we've got Mall of Umhlanga and Bedworth currently undergoing upgrades.
We do have an appetite to grow further in South Africa, but all deals, and you've heard me say this often, need to be strategically aligned and financially accretive. At the moment, we are not finding the financial accretion in the South African market. We are finding deals that are very attractive properties, but the yields are too tight relative to our cost of capital, and we've had to walk away from them in some instances because of property fundamentals. I'd say of that ZAR 7 billion, ZAR 5 billion has been simply because the economics don't work given our cost of capital. In Spain, Alfonso has mentioned the upgrades at some of the key assets.
Lar España, we continue, excuse me, looking to drive value and opportunities there. In the meantime, we're getting a tremendous return through dividends and capital growth on that. We do have an appetite to grow further in Spain by looking for bolt-on acquisitions. I'm gonna talk a bit more about that on the next slide. We certainly are seeing very good deal flow in the market. We believe this is the ideal time in the cycle to invest. The question is: Are we going to be able to find capital to be able to take advantage of those opportunities? I think that's a challenge facing not only Vukile, but the property sector as a whole. Let's talk for a moment on expanding our landscape because that has been quite topical of late.
I think the market is aware that we had put in an offer, or proposal on taking our Capital & Regional. We've had to withdraw that because we were unable to reach terms with Growthpoint Properties being the major shareholder. We certainly are looking to expand our platform. It's not a question of growing at all costs. If we find the right opportunities, we find the right platforms, we will look to potentially enter some additional markets, mainly focused on Western Europe and the UK. I think it's important to say that it's highly unlikely that we're gonna be going into Eastern Europe. I think as the investment community, you have enough choice in that space. We're not gonna add anything to that environment, we're gonna try and focus more on Western Europe.
The idea really is to say: Can we replicate Castellana's model and success in new markets? I think off the back of what we've achieved in Castellana, I'm sure you'll agree that we've earned our rights to earn the right to look at those opportunities. What are we looking at then in a bit more detail? South Africa, as I've said, we've walked away from the majority of the assets, the yields just being too tight. In Spain, Castellana is currently evaluating some individual asset purchases, one of which is in due diligence at the moment. We're looking at a model of using around 35%-40% senior debt on a deal, and that should allow us to target cash-on-cash yields of 9%-10%.
Which if you then consider our current cost of equity and what we raised money at in February, will give us a deal that is sort of neutral to accretive in year 1. Ideally, we're looking for high quality bolt-on acquisitions that further strengthen our shopping center offering, assets with strong, predictable and stable income streams, and with the opportunity to add value in the short to medium term through active asset management. We've also started recycling some assets, so we had sold our 2 office assets previously. We've now sold the Meixueiro retail park. That's EUR 8.6 million. A small asset, but, you know, comfortably achieving fair value, and in fact, slightly above our book value on that. Net proceeds, not particularly large, but those will be recycled into the value add projects that we currently have.
Turning to offshore territories, we are currently evaluating some assets in Portugal, on which we have exclusivity. If concluded, this transaction would provide a very good strategic entry point for Castellana into its neighboring market, where there is a very strong shopping center culture. We really feel that if we're able to use these assets as a springboard, we can grow Castellana to become the leading retail player in Iberia. That's really the objective. In terms of the UK, just to sort of say that having withdrawn the offer for Capital & Regional, there currently isn't anything on the agenda in terms of the UK that we are evaluating.
Really, when you look at sort of, you know, what do we need to do in the year ahead, it's, as always, making sure we meet and exceed our customers' needs, make sure we have that laser focus on operational results, keep delivering results. Being a responsible corporate citizen, maintaining our strong and unique culture, and most importantly, delivering sustained earnings and dividend growth for investors and making sure that we are investment ready. We have a keen focus on capital allocation and doing deals that are strategically aligned and financially accretive. Before moving on to the prospects for the year, let me just pause for a moment and talk on our approach on dividends.
Number 1, as Lizelle has mentioned, our key focus is to make sure that we remain tax neutral in looking at our payout ratio in any particular year. Within that, we will retain an element of flexibility with our payout ratio generally being in the range of 80%-85%. You'll notice in the guidance that we've given for this year, of growth in dividends of 4%-6%, that we will marginally increase our payout ratio, but still staying within that range of 80%-85%. By doing that, we are still able to comfortably retain sufficient cash to meet our CapEx requirements in both South Africa and Spain. The retention ratio, important just to focus on that, is not really a driver of deal activity.
The amount of cash that one can retain doesn't actually allow you to pursue the kind of opportunities that we feel are important. Again, remembering average asset size in South Africa is ZAR 470 million. In Spain is about EUR 60 million. To that end, given the deal flow that we are seeing, we've decided that we'll offer a DRIP for the FY 2024 final dividend. We haven't done a DRIP for many, many years, but we feel just that because we have this deal opportunity, this might be a good opportunity to give shareholders the choice, and that might allow us to retain more significant amounts of cash that can then be deployed into opportunities. I do wanna make 2 caveats around that.
Number 1, it doesn't mean that we're just because we're doing a DRIP now, it's gonna be a permanent feature in our capital structure. We're going to use DRIPs tactically, and not necessarily to shore up the balance sheet, but tactically, when we think we can use it to effectively raise money for new opportunities, we will look to use a DRIP. The second thing is that we're not going to be offering DRIPs at deep discounts to prevailing spot prices. Anybody who thinks that they can sort of, you know, expect a big discount there, you will be disappointed. It's not gonna happen. Why?
Ultimately we're gonna use a DRIP as a way of raising money for an acquisition, and therefore it's imperative that we keep the cost of capital on any new shares issued under a DRIP in line with where we see the acquisition opportunities going forward. With that, let's move on to prospects. I'm really proud to say that coming off the back of a very strong set of results this year, we're able to continue the growth story, and we're getting, as we said, growth in FFO per share between 2%-4% and growth in dividend per share between 4%-6%. Just to unpack that a little bit, excuse me. I think the question is being off the back of our strong results, can we keep the growth going? The answer is a very definitive yes.
If you have a look at the growth in NOI included in our forecast is growth of between 5%-7%, which is very, very strong. You've got the, sorry, the Lar España dividend that Lizelle has spoken about. And then what pulls the numbers back slightly is something that we've spoken about before, and that is the reset of the interest rates on the EUR 256 million loan, which was in this past financial year only for 6 months and will be in the new financial year for a full 12 months. And that sort of in, you know, ends up with the numbers being at around 2%-4% for FFO and 4%-6% for dividend.
As always, with the growing importance of the offshore side of the business, our exchange rate assumption currently is 20.05 in the numbers, and that does provide an element of variability in FFO. Remember, the dividend is 100% hedged and, you know, that number shouldn't change. Overall, we should deliver FFO between ZAR 1.57 and ZAR 1.60 per share and a full-year dividend between ZAR 1.29 and ZAR 1.32 per share. Just to end off, I really believe that Vukile is in excellent shape and very pleased to again forecast further growth coming off a high base. We're standing here with a very clear and scalable strategic direction.
We have a strong pipeline of accretive acquisitions that we are evaluating against our well-known discipline of capital allocation. We have a strong balance sheet. Most importantly, we have a team of dedicated colleagues that can deliver against our objectives. Where we say we're gonna grow, as we have historically, we plan to grow going forward. I'd like to now just end off by, again, thanking all of our key stakeholders, many of whom are in the room, then open up to questions from the floor and from the online panel, as my colleagues can join me here on the stage. Any questions from the floor? Nah, we've stunned you into silence. Okay, Louise, have you got questions from the-
Thanks, Lawrence.
the podcast, videocast.
We do have a few questions. The first question is from Mweishö Nene of SBG Securities. He has asked for your thoughts on the decreasing ICRs across the sector, as well as your own portfolio. He wants to know if you feel that covenants may be adjusted downwards as a result.
Mweishö, thanks for the question. Yeah, I think, look, that's something I think that's going to be evident in property worldwide as an asset class. because as you see sort of, you know, debt being restructured and refinanced, and remember, on the global scene, 2025, 2026 has got a tremendous amount of refinance to be done. To a large degree, that's why we're doing the Aareal refinance early to get out ahead of that. What that's going to do, though, overall, is push up your cost of finance. Your income is not necessarily gonna grow at the same level, so therefore, the ICR are gonna come down.
I don't think the banks are gonna necessarily reset them, but I think the issue to look at is what we always talk about, and that is to say, what is the headroom that you've got in terms of growth of movement in that ratio towards covenant breach? That is very much of a risk management mindset as to how you look at that. In our case, there's very significant headroom on that, so I don't see that as being a problem or challenge for us. Overall, to your question, I also don't see banks lowering those covenants.
Thank you, Lawrence. The next question is from Yesh Pillay of Anchor Stockbrokers. He said, "Thanks for the presentation. Any update on your conversations with Pick n Pay regarding core corporate and franchise store performance? How do you plan to help them turn around underperforming stores, and how are Boxer stores performing?
Thanks. Itiu, would you take that, please?
Yeah. I mean, I think, you know, when it comes to Pick n Pay, the approach to discussing Pick n Pay has to be balanced and I think responsible. I think as a point of departure, firstly, Pick n Pay is currently paying all of their rentals. They're not in arrears. You know, they're delivering, you know, with regards to their obligations. We're working very hard with Pick n Pay at an operational level in terms of increasing sales, promotional activities. We've also done quite a bit of work, you know, with the Boxer teams and the Pick n Pay teams in terms of potential, you know, changes to 1 of 2 Boxers within our portfolio.
I'd answer that question to say, what's in the public domain around performance of Pick n Pay versus Boxer is perhaps what we're seeing mirrored in our portfolio. You know, to stress that we've got a very good working relationship with them. We're working closely to try and, you know, turn around their fortunes. And we're working jointly with their professional teams to design any such changes. And at this point in time, there are no big alarming bells around, you know, arrears, lack of payments. And I will continue working with them to, you know, to see how we can assist them at this point.
Thanks.
Thank you, Itiu. The next question is from Mweishö Nene of SBG Securities. He asked you to please explain what the crime percentage means on the shopability slide. Secondly, he's asked if there have been any security changes or word of mouth updates in KZN recently.
Sure. Yeah, the crime % on that slide refers to what is recorded on what they call an OB book. It's an occurrence book of any crime, you know, occurrence that happens in the mall. What we've done there, we've compared, you know, all occurrences of crime this year relative to last year, and that's where you'll see the downward trend on a % level. That's, that's the 1 question. I guess, on KZN, I'd probably look at it broader to say, you know, pre-elections, during elections, post elections, what have we seen on the ground? We've really intensified our security approach from an intel perspective, working closely with our security providers. The security environment has been calm. We haven't had significant challenges or issues in all of the provinces.
We remain on high alert, particularly in the next 2 weeks. At this point in time, you know, there's no big security threats that we're seeing in the portfolio.
Thank you. Itiu, there's a similar question from Luqman Hamid of Ninety One that's just come in. You've partially answered it. The second part of his question was around whether Sasria has enforced a minimum loss ratio on the portfolio.
Yeah, I mean, Sasria has set a limit for the portfolio, which is something that has been, you know, widely publicized. The way that we've, you know, looked to manage that limitation is more around risk management. You know, we've really worked closer 'cause if you can't pass on the risk, you know, the best thing to do is then to look to manage it. What we've done is work very closely with our security service providers to be first in line if there were to be some sort of eventuality around unrest. We've got, you know, a contractual obligation that we formed with one of the big security service providers to assist us and, you know, be on standby.
The way that we've managed it is more around the risk management side or angle. We suitably comfortable that our
You know, that our portfolio broadly, is well covered for any risks that may occur.
Alfonso, can I maybe just add 2 points on that. The cover limit is ZAR 500 million per portfolio. If you put that into context of what we experienced during June 2021, you know, that came to about ZAR 240 million-
Yeah.
In round numbers, that was with a number of malls that were impacted. It's a very difficult kind of risk to quantify because you don't know how many malls are gonna get hit, and you don't know how many malls, you know, to what extent. I think in what was a very dire situation in 2021 to have, you know, incurred the other ZAR 250 odd million damage, I think shows you that we do have sufficient cover at the ZAR 500 million. We have also explored alternatives in the Lloyd's market. We felt it was way too expensive, not effective, and we had serious concerns about whether those policies would respond. In all events, we'll do so only after Sergio kicked in.
Long story short, I think we are adequately covered, based on historical experience and the risk management plans that Alfonso and the team have put in place.
Thank you both. The next question from Mweishö Nene of SBG Securities. You mentioned notable additional staff costs for succession planning. Is it possible to expand on this?
Sure. Mweishö, we had some staff members in our finance team and our MIS team, you hear we talk about that a lot, who had been with us for in fact since pre-Vukile days, who were retiring. We brought some additional staff on board to make sure there was a good, healthy handover between them, so that when they did retire, which happened at the end of March, we'll continue seamlessly, and that has all taken place. That was really what it was about.
Thank you, Lawrence. The next question from Naeem Samsodien of Investec. He says in reference to slide 63 and challenging access to capital, he's asked if that includes the 29% stake Lar España as a source of capital.
Nazim, I don't think that that would immediately be on our list of capital. You are right in the question of saying potentially it's currency, as we've used Fairvest for currency. I think at this stage of the game, it wouldn't be a priority for us to use that. On the contrary, we'd rather trying to see how we use that 29% to take the business to another level. That sort of is not really high up on the agenda as capital. That can always change in time. Today, it's not an angle we're pursuing.
Okay. In keeping with Lara, a question from Luqman Ahmed of Ninety One. He's asked if you can confirm whether you'll be accruing ZAR 0.70 per share or ZAR 0.79 per share for the large dividend in FY 2025.
I'm gonna ask Lizelle to take that.
We're accruing the ordinary dividend at ZAR 0.70 per share, plus the ZAR 0.09 extraordinary dividend. In total, it's ZAR 0.79 for FY 2025.
Thank you, Lizelle. Next question from Luqman Ahmed as well, from Ninety One. He said, "Almost half of the SA Hedge books roll off in FY 2025. Can you advise on the average level of the expiring hedges?
Do you wanna take it?
In terms of our SA debt, 76% of SA debt is hedged, which is our Sasria debt and our SA EUR debt. We're sitting with a 2.2 year fixed rate maturity. At the moment, all our hedges are in the money.
Thank you, Lizelle. The next question is from Lwando Ngubentomibi, from Anchor Stockbrokers. He says, "On the group's pursuit into Western Europe territories, what type of assets is the group planning to add, community malls or super regional malls?
Well, I think, you know, we sort of feel more comfortable in the community convenience type malls, sort of more, you know, needs-based shopping versus wants. I think it's about sort of where you find the opportunity. I always say we try and keep a broader net in terms of looking at opportunities and then doing the filtering. Generally speaking, you know, the super regionals are going to be much larger ticket sizes and much lower yields. Therefore, I think it makes it highly unlikely that that's gonna be the route that we're going to go down. It's probably gonna be more similar types of assets to what you've seen in Castellana, what you've seen in South Africa. We do well out of those types of assets.
Thank you, Lawrence. Another similar question from Lwando. We have in the past seen other listed property companies exit Western Europe entirely for Eastern Europe territories like Romania, for example. How is management thinking about Romania, which seems to be under-penetrated for malls, in his opinion?
Lwando, I think, you know, it's what we said at the very beginning when we went into Spain. We just didn't feel that we could go and add anything to the Eastern European story. It's very well covered by great South African companies that are there. You know, we'd be sort of a new entrant coming in at a very small level. It's currently not on our agenda. It's an interesting point, you know. Yes, I think Eastern Europe may have higher growth, but I think it does come at a higher risk as well. You know, that is really just reflected in the sovereign yield spread between Western and Eastern European countries, you know, of around 300-400 basis points.
We feel that if one is able to buy in what's potentially lower risk environments at very attractive prices, that is where we should be looking at the moment.
Thank you, Lawrence. That's all from the webcast for now. Perhaps you can check if there are any more from the floor.
Any questions here? No. Great. Thank you. Let me once again thank everybody for your attendance. We really appreciate it. Please join us outside for some snacks.