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Key Points
- Vukile acquires Forum Madeira for €63.3 million($72.2 million), enhancing its Iberian presence in a booming tourism market.
- The shopping center boasting full occupancy features top retailers, attracting over 5 million visitors annually and serving a catchment of 250,000 residents.
- The deal, expected to close by Apr. 30, is projected to deliver an 11.8% cash-on-cash return, capitalizing on Madeira’s 23.4% economic growth since 2019.
Vukile Property Fund Limited, a Johannesburg-based property fund led by South African businessman Laurence Rapp, has taken a major step in growing its retail presence in Iberia. The company recently acquired the Forum Madeira Shopping Center in Funchal, Portugal, for €63.3 million ($72.2 million).
This acquisition boosts Vukile’s position in the market and sets it up to compete directly with Barry Stuhler’s Lighthouse Properties, as the company now operates across both South Africa and the Iberian Peninsula.
The deal was executed through Vukile’s 99.5-percent owned subsidiary, Castellana Properties SOCIMI, S.A., which utilized its 70-percent stake in Caminho Propício – SIC Imobiliária Fechada S.A. to acquire the full share capital of the property-owning entities from Germany’s DWS Grundbesitz GmbH.
This strategic purchase, partially funded through cash and €28 million ($31.94 million) in local debt, is expected to offer immediate value to Vukile’s growing portfolio. With a loan-to-value ratio of 38.5 percent, the property is valued at €72.8 million ($83.08 million) by X-Yields.
Vukile targets high-performing retail assets
Forum Madeira is a well-established 21,472-square-meter shopping center in the thriving tourism hub of Funchal. The mall is fully occupied, with key retailers like Inditex brands, Pingo Doce, and Cinema NOS anchoring the center. The shopping center attracts 5.4 million annual visits, generating €4,694 ($5,319) in sales per square meter.
Its catchment area includes 250,000 residents and 2.3 million tourists. With a 9.5 percent NOI yield and an expected 11.8 percent cash-on-cash yield after debt costs, Forum Madeira aligns perfectly with Vukile’s strategy of investing in high-performing retail assets in economically sound regions.
The deal also taps into the booming Madeira economy, which has grown by 23.4 percent since 2019. The island’s unemployment rate dropped to 5.9 percent in 2023, while tourism surged, with 10.9 million tourist stays, making it Portugal’s third-most visited region. The acquisition is set to close by Apr. 30, 2025.
Expansion in Europe strengthens Vukile’s assets
Under Laurence Rapp’, Vukile Property Fund, valued at over $1.1 billion, has become a top player in the retail real estate market. Competing with Barry Stuhler’s Lighthouse Properties, Vukile has built a strong portfolio of income-generating retail centers, now valued at over R50 billion ($2.5 billion). Castellana Properties, Vukile’s Madrid-listed subsidiary, now represents more than 60 percent of the group’s assets, solidifying its commitment to the Iberian market.
The acquisition of Forum Madeira further deepens Castellana’s footprint in high-growth, tourism-driven retail markets, perfectly complementing Vukile’s focus on resilient, income-generating assets in sound economic regions. The move highlights Rapp’s long-term strategy of building a robust, yield-driven European platform, positioning Vukile as a key player in Southern Europe’s real estate sector.
