The South African Real Estate Investment Trust (REIT) sector surged 6.9% in April, outperforming equities (4.3%) and bonds (0.8%), despite fewer trading days due to public holidays.
Investor sentiment was lifted by growing expectations of accelerating distributable income and potential interest rate cuts by the South African Reserve Bank (SARB).
“This was a sweet month for the sector. The sector continues to offer value, trading at historically high discounts to net asset value which excludes the Covid-19 period,” said Ian Anderson, head of Listed Property and Portfolio Manager at Merchant West Investments, and compiler of the SA REIT Association’s monthly Chart Book.
April also saw strong trading activity, with turnover exceeding R12.2 billion — the highest monthly volume in 2025 so far — indicating renewed investor appetite amid rising share prices.
Leading the gains were SA Corporate (+15.3%), Attacq (+13.3%), Resilient (+10.9%), and Redefine Properties (+10.5%).
“There was little company-specific news to drive these moves, but a more favourable macro-economic and political backdrop certainly played a role,” added Anderson.
Inflation fell below the SARB’s lower target range in April, reinforcing expectations of a rate cut at the upcoming Monetary Policy Committee meeting in May.
The market is now anticipating at least one additional cut before year-end.
“Lower interest rates not only support property valuations through reduced discount rates but should also lift distributable income growth across the sector in 2025 and 2026, especially with average loan-to-value ratios sitting between 35% and 40%,” said Anderson.
He noted that a stronger rand and lower oil prices are likely to help keep inflation in check, providing the SARB with further room to reduce rates.
Meanwhile, the proposed 0.5% VAT hike from the National Budget has been suspended following pushback from within the government of national unity.
On the global front, easing US-China trade tensions and US President Donald Trump’s delay of new tariffs on several countries supported risk appetite, benefiting global equities and indirectly boosting sentiment toward South African REITs.
In corporate developments, Accelerate and Delta announced further asset disposals to shore up their balance sheets. Emira disclosed the departure of CEO Geoff Jennett due to strategic disagreements with the board.
Meanwhile, Vukile, through its Castellana Properties subsidiary, acquired Forum Madeira in Portugal for €63.3 million, extending its international retail footprint.
