By Laurence Rapp, CEO, Vukile Property Fund

Conventional wisdom pits diversified property funds against specialist ones. But, as Vukile shows, a well-crafted specialist fund can also reap the rewards of diversification for its investors.
When researching investment in real estate investment trusts (REIT), you’ve likely read that you must choose between diversified and specialist funds. But is this really an either-or proposition?
Yes, investing in a diversified REIT offers a shortcut to cross-sector diversification. However, companies excelling in their specialised areas often yield superior results, says Laurence Rapp, CEO, Vukile Property Fund.
Private investors may benefit from building their own diversified portfolios by selecting top-performing sector-specific funds. At Vukile Property Fund, we believe that with the right approach, you can get the best of both worlds in one fund. Our model combines retail real estate sub-sector specialisation with geographical diversification across South Africa and the Iberian Peninsula.
Mastering our niche
As a specialist fund focused on retail property, we’ve found that deep expertise in a specific sector can be a powerful driver of value. Concentrating efforts and resources on what we know best achieves a level of insight and understanding that more generalist funds simply can’t match. This drives the ability to identify opportunities, manage risks, and drive returns in ways that would be impossible with a more scattered approach. Take Vukile’s scalable consumer-led business model. By understanding our shoppers’ needs, we create experiences at our shopping centres that exceed expectations. This leads to increased time and spending at our centres, and builds loyalty. Our customer-centric approach drives value creation for all our stakeholders. Our model is scalable and relevant to each community and country where we invest.
Multi-layered diversification
But specialisation doesn’t have to mean putting all your eggs in one basket. At Vukile, we’ve built a diversified portfolio that spans South Africa and the Iberian Peninsula in Spain and Portugal. We diversify across regions and retail property types, encompassing large malls, smaller convenience centres, retail brands and individual shop units. A single shop closure has minimal impact on the overall portfolio. This diversification provides a robust foundation, spreading risk and increasing the potential for consistent returns over the long term.
Disciplined dealmaking
Of course, diversification is only as good as the quality of the underlying assets. That’s why we’re so selective about the properties we bring into our portfolio and our value-adding developments. Strong capital allocation lies at the heart of our strategy, and this is where our specialisation truly comes to the fore.
Every potential acquisition is subjected to rigorous scrutiny. We’re not interested in simply chasing yield and growing for scale’s sake – our goal is to build a portfolio of truly exceptional properties that are strategically aligned and financially accretive in our core markets of Spain, Portugal and South Africa.
A consistent track record
Combining a specialist’s focus with the benefits of diversification provides a strategic approach to capitalise on retail property sector opportunitie. Over the past 20 years, Vukile has delivered consistent dividend growth (bar one Covid-19-impacted year), outperforming the SAPY Index and industry peers. This is a testament to the power of a specialised yet diversified model, clear strategy, best-of-breed governance, robust financial management, and strong, skilled teams that operate on the ground, locally.
With our proven business model and performance record, our investors continue to demonstrate confidence that their capital is in good hands, allowing us to create a well-crafted specialist fund for them.
Get the best of both worlds
So why choose between specialisation and diversification when you can have both? At Vukile, we’re redefining what’s possible for REIT investors. We believe there are exciting returns and opportunities to be found in the world of retail property and across our core markets of South Africa, Spain and Portugal – and we look forward to unlocking them.