The South African REIT sector delivered a strong performance in April, gaining 6.9% and outperforming both equities (4.3%) and bonds (0.8%), despite a disrupted trading month due to public holidays.
Investor sentiment was buoyed by expectations of accelerating growth in distributable income and the likelihood of interest rate cuts by the South African Reserve Bank (SARB).
Ian Anderson, Head of Listed Property and Portfolio Manager at Merchant West Investments, and compiler of the SA REIT Association’s monthly Chart Book commented:
“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.”
The sector also saw robust trading activity, with over R12.2 billion in turnover - the highest monthly volume for 2025 so far indicating strong investor appetite amid rising prices.
SA Corporate led the gains with a 15.3% return, followed by 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,” said Anderson.
In April, consumer inflation fell below the SARB’s lower target range, strengthening expectations of a rate cut at the upcoming Monetary Policy Committee meeting in May, with the market now pricing in at least one more cut later this year. “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 said a stronger rand and lower oil prices are likely to keep inflation muted, giving the SARB room to ease rates further. Meanwhile, the proposed 0.5% VAT increase announced in the Budget Speech has been suspended following opposition from within the government of national unity.
Globally, easing trade tensions between the US and China, along with US President Donald Trump’s decision to delay tariffs on several countries, added to the positive sentiment, benefiting global markets and by extension, SA REITs.
On the company front, Accelerate and Delta announced further asset disposals to strengthen their balance sheets, while Emira revealed the departure of CEO Geoff Jennett due to strategic differences with the board. Vukile, through its subsidiary Castellana Properties, acquired Forum Madeira in Portugal for €63.3 million, expanding its offshore retail portfolio.
Visit https://sareit.co.za/sareit-research/ to download the SA REIT Association Chart Book for April.
