South Africa’s REITs maintained their positive trajectory in August 2025, gaining 2.4% and lifting the year-to-date return to 14.2% according to the SA REIT Association’s August 2025 Chart Book.

Although this lags the broader equity market’s 23.6% return for 2025 so far, the performance remains impressive against a higher base created in 2024 when local REITs delivered an exceptional 35.8% return compared to a 13.4% return from equities.

Ian Anderson, Head of Listed Property and Portfolio Manager at Merchant West Investments and compiler of the Chart Book, says that the recovery in listed property has been broad-based and underpinned by a constructive global interest rate environment.

“Lower bond yields are reducing the cost of debt, while strong share price gains are lowering the cost of equity capital. Together, these trends are giving the sector renewed financial flexibility.”

The improved backdrop has seen several REITs pursue both acquisitions and capital raising activity. Dipula Properties announced its R478 million acquisition of Protea Gardens Mall and raised R559 million in early September 2025 through an accelerated bookbuild while Fairvest Limited also secured investor support, raising R976 million to support acquisitions in KwaZulu-Natal and the Western Cape.

“After several years in which raising equity was costly and limited, companies are once again able to raise sizeable amounts at attractive levels to fund acquisitions,” adds Anderson.

Dipula Properties, Equites, Octodec Investments, and Spear REIT all provided shareholders with trading updates during August 2025. While acknowledging muted domestic economic growth, their respective management teams expressed optimism about their businesses’ prospects.

Guidance included distributable income growth per share of 4% to 6% for Dipula Properties (FY2025), 5% to 7% for Equites (FY2026), 3% to 6% for Octodec Investments (FY2025), 3% to 5% for Redefine Properties (FY2025) and 4% to 6% for Spear REIT (FY26).

“These growth rates may appear modest by historical standards but given how scarce earnings growth has been across the sector in recent years, they are very encouraging,” says Anderson. “Investors have taken note, which explains part of the strong price gains over the past 18 months.”

Growthpoint Properties exceeded its FY2025 guidance with an early return to growth, reporting a 3.1% increase in distributable income per share, and a 6.1% dividend increase. The REIT also announced significant leadership changes, with Estienne de Klerk succeeding Norbert Sasse as Group CEO from July 2026 and José Snyders joining as Group CFO in January 2026.

Accelerate Property Fund advanced its balance sheet strategy with the sale of the Buzz Shopping Centre and Waterford Centre in Fourways for R215 million while Resilient REIT delivered a strong set of interim results for the six months ended 30 June 2025, declaring an interim dividend of 245.72 cents per share, up 12.2% on the prior year.

With valuations more conducive to raising capital and a pipeline of acquisition opportunities emerging, activity levels in the sector are expected to accelerate into late 2025 and 2026. External growth through acquisitions has historically been a strong driver of returns. This is once again on the horizon.

“The sector is now well positioned to deliver distributable income growth above inflation over the medium term,” notes Anderson. “Combined with attractive income yields, this should enable listed property to provide investors with double-digit total returns, even after the strong gains of 2024 and early 2025.”