South African REITs delivered a 38.6% total return in 2025, building on 2024’s 35.8% performance, and completing two consecutive years of gains according to the latest SA REIT Association Chart Book.

December 2025 saw the sector gain 0.5% as markets wound down for yearend, while a stronger Rand weighed on several geographically diversified REITs with substantial offshore investments.

Following a challenging Q1 in 2025 which saw the sector down 4.1%, SA REITs staged a remarkable recovery. By yearend, Q4 2025 alone delivered 21.5% as companies raised their distributable income guidance and dividend growth (at sector level) jumped to 10% year-on-year in Q3 2025 – having been zero for the better part of three years.

Delta Property Fund was the standout performer, returning gains of 105.3% for the year, followed by Fairvest Limited at 62.9%, Heriot REIT (49.9%), Vukile Property Fund (48.3%), Growthpoint Properties (47.6%), and Resilient REIT at 47.5%.

“Over the past three and five years, South African REITs have comfortably outperformed both the local equity and bond markets, cementing their position as a compelling asset class for investors seeking income and growth,” says Ian Anderson, compiler of the SA REIT Chart Book and Head of Listed Property at Merchant West Investments.

“At the start of 2025, very few analysts and market commentators could have envisioned just how successful 2025 would be for South African REIT investors. The end of load shedding and more clarity on global tariffs helped boost investor sentiment towards the sector. At the same time, company management teams were becoming increasingly optimistic about the medium-term prospects for their businesses,” he adds.

Following a strong recovery, South African REITs enter 2026 on a firmer footing, with total returns likely to be skewed towards income rather than capital gains, he notes.

“The outlook for dividend growth of between 5% and 8% per annum over the next two to three years is supportive of current valuations and likely to drive some capital appreciation in the medium-term.”

The macro backdrop for South African REITs has improved significantly, with lower interest rates, the end of load shedding, removal from the financial grey list and a sovereign credit rating upgrade all contributing to a more favourable environment. These factors should result in higher capital flows, a lower risk premium and improved access to capital markets.

“All said, this should result in total returns of between 12% and 15% per annum over the medium-term, which is likely to be in line with the South African equity market and a lot higher than South African bond and money markets. For long-term investors, SA REITs should continue to play a valuable role as an income-oriented asset class, with opportunities for selective capital appreciation,” Anderson concludes.