South Africa’s REIT sector maintained its upward momentum in May 2025, delivering a 4.1% return for the month.
Once again, it outperformed both the broader equity market (3.1%) and bonds (2.7%), reinforcing its recovery trajectory.
This latest gain follows a strong 6.9% return in April, bringing the sector’s year-to-date performance to 6.7%—a notable rebound after a sluggish start in January.
Although REITs still lag behind the broader equity market’s impressive 14% year-to-date growth, they have now outpaced bonds in 2025.
This shift signals renewed investor confidence, coinciding with South Africa’s 10-year government bond yield recently dipping below 10% for the first time in over three years.
Ian Anderson, head of Listed Property and portfolio manager at Merchant West Investments – and compiler of the SA REIT Association’s monthly Chart Book – attributed the sector’s improving sentiment to several key drivers.
“The positive outlook is largely driven by expectations of lower interest rates in South Africa, a small reprieve in global tariff tensions, and growing evidence that property fundamentals are strengthening. These trends set the stage for higher distributable earnings growth across the sector in 2025 and 2026.”
Several REITs published financial results in May, providing further evidence of the sector’s ongoing recovery.
Redefine Properties, for instance, reported interim results for the period ending February 2025, with revenue rising 3.5% and distributable income per share increasing 0.7%.
The company maintained its full-year guidance, projecting distributable income per share between 50 and 53 cents – representing growth of 0% to 6%.
Equites Property Fund posted full-year results in line with expectations, increasing distributions by 2.1% to 133.92 cents per share.
More notably, the company’s guidance for 2026 exceeded consensus, with anticipated distribution growth between 5% and 7%, driven by robust rental escalations and a premium logistics portfolio shaped by two years of strategic asset recycling.
Equites was the top-performing REIT in May, with its share price advancing 10%.
Spear REIT also delivered strong results, benefiting from its focused strategy in the Western Cape. Its share price rose 9% following the release of its full-year results for the period ending February 2025.
The company also announced the acquisition of Berg River Business Park in Paarl for R182.15 million through an all-share transaction.
Other REITs reporting in May included Burstone, Delta Property Fund, Dipula Properties, Emira Property Fund, and Octodec Investments. Across the board, a consistent theme emerged: improving property fundamentals across all sub-sectors, further boosting investor sentiment.
The total market capitalisation of South Africa’s REIT sector has now exceeded R250 billion—its highest level since January 2020.
“With further interest cuts a possibility, stabilising macroeconomic conditions, and improving company guidance, investor confidence remains strong, and the momentum is likely to carry through the remainder of 2025,” said Anderson.
