Best news for South Africa’s listed property sector in six years

South African Real Estate Investment Trusts (REITs) have had a strong year, with a rally in November propelling the sector’s market cap to over R300 billion for the first time since 2019.

This comes as South Africa’s REITs have returned an impressive 37.9% in the year to date, surpassing the equity market and bonds.

This marks a significant turnaround for the local property sector, which struggled during the Covid-19 pandemic and has been slow to rebound.

On 11 December 2025, the SA REIT Association revealed that local REITs extended their winning streak in November, delivering a 9.1% total return following October’s 10.8% gain.

The association said the listed property sector significantly outpaced both equities, which returned 1.7%, and bonds, which returned 3.4%, in November. 

Between January and November 2025, local REITs have returned 37.9%, surpassing both the broader equity market at 36.2% and bonds at 20.9%.

“The sector’s momentum remains firmly intact,” said Merchant West Investments’ portfolio manager and head of listed property, Ian Anderson.

Anderson, who also compiles the monthly SA REIT Chart Book, attributed the sector’s strong growth to a variety of factors, including lower interest rates and long bond yields.

These factors, combined with strong and accelerating dividend growth, led to a sharp narrowing of the discounts to net asset value that emerged during the Covid-19 pandemic.

He said the strong price gains, together with new equity capital raised during the year, have propelled the sector’s market capitalisation above R300 billion for the first time since November 2019. 

Since the end of May 2024, South African REITs have returned a remarkable 84.3% as headwinds such as high interest rates and load-shedding gave way to renewed optimism following the formation of the Government of National Unity (GNU).

Anderson attributed these strong returns to improving property fundamentals across South Africa over the past two years.

He explained that these fundamentals have translated into lower vacancy rates and positive market rental growth.

“This is now being reflected in most companies’ outlook statements. Medium-term distributable income growth prospects of between 6% and 8% per annum over the next three years are supportive of current valuations,” he said.

Anderson added that investors should continue to anticipate low double-digit returns from the sector over the medium term.

South Africa taking on the US and UK

South Africa’s listed property sector is not only outperforming locally, but has also outpaced global peers like the United States, the United Kingdom and Australia.

According to the latest Global Property Research (GPR) Market Update for November 2025, South African REITs are currently delivering some of the strongest total returns in the global real estate market.

Data released by GPR reveals that the South African listed property sector delivered a 9.7% total return in November 2025, pushing its year-to-date growth to 46.2%.

For context, the Global REIT Index is up 12.0% in the year to date, while the United States REIT market sits at 9.2%, the United Kingdom at 10.3% and Australia at 22.9%. 

Even Japan, a strong performer in the Asian region, trails South Africa with a 27.4% year-to-date return.

Independent property analyst Keillan Ndlovu said this represents far more than a short-term spike, rather indicating a structural shift in South Africa’s property market.

“While the short-term numbers are headline-grabbing, the underlying data suggests this is a structural re-rating of the sector rather than a momentary spike,” he said. 

“The GPR data shows South Africa delivering a 44.7% return over a one-year period, confirming a sustained upward cycle.”

He pointed out that, on a three-year and five-year annualised basis, South African REITs have returned 20.6% and 23.6%, respectively. 

In contrast, the global average over five years stands at just 7.3%, with the UK at -0.3% and Europe at 1.9%.

“With distribution growth accelerating to over 10% and property fundamentals on an improving trajectory, the sector is well positioned to deliver sustained returns for investors,” Anderson said. 

“The combination of attractive forward yields, improving operational metrics and a supportive interest rate environment underpins our constructive view.”