South Africa’s real estate investment trusts surge as liquidity returns, dividends accelerate and funding costs ease

South Africa’s real estate investment trusts (REITs) staged a decisive rally in October. The SA REIT Index returned 10.8% for the month, outpacing equities at 1.6% and bonds at 2.6%. Year to date to 31 October 2025, the sector is up 26.4% as earnings momentum, firmer sentiment and lower funding costs converge.

“October marked a turning point. Investors rotated back into REITs at scale, pricing in faster dividend growth and a healthier cost of capital,” says Ian Anderson, Head of Listed Property and Portfolio Manager at Merchant West Investments and compiler of the monthly SA REIT Chart Book.

He notes that trading activity was intense with just under R14 billion changing hands in the month, excluding Vukile’s R2.65 billion accelerated bookbuild placed at a small discount to its net asset value (NAV). “This is what renewed confidence looks like. Balance sheets are stronger, distributions are accelerating and selective external growth is back on the table.”

Published by the SA REIT Association and compiled by Anderson, the SA REIT Chart Book distils sector performance, valuation, yield and capital markets activity into clear visual intelligence along with informed commentary for investors and media. The latest October issue was released on 6 November 2025. (Benchmark and methodology: SA REIT Index total return, FTSE/JSE indices, end-October 2025.)

Market leadership was underpinned by improving operating updates, resilient occupancy and measurable relief on interest expense. Several REITs reached or approached all-time highs, while bookbuild activity at pricing close to reported NAV signals a reopening of the equity window for quality portfolios.

What drove the surge

Anderson attributes October’s strong advance to a combination of softer long bond yields, visible distributable income growth and narrowing discounts to NAV. “On a forward view we see sector dividends compounding in the high single digits, with a current forward yield near 7.5%. If bond yields remain range bound, double digit total returns over the medium term are achievable,” he says.

Context and correlation

The sector’s risk / return profile continues to differentiate against local equities and bonds, with five-year correlation metrics and rolling return components reinforcing the diversification role of REITs in South African multi-asset portfolios. The SA REIT Chart Book details this across total return indices, yield differentials and rolling distribution growth.

With investor demand returning and the cost of both debt and equity improving, selectively accretive acquisitions, redevelopments and new developments are set to feature again. “After October’s rerating, the heavy lifting shifts back to earnings and cash flows. That is a constructive handover for a sector that has rebuilt its fundamentals,” Anderson says.

Company updates

Several noteworthy company developments during October reflect renewed market activity and investor confidence across South Africa’s real estate investment trusts.

Accelerate Property Fund led the pack after shareholders voted overwhelmingly against the re-election of founder Michael Georgiou to the board, with more than 97% opposing the motion. The stock surged almost 18% following the decision, making it the top-performing REIT for the month.

Emira Property Fund expanded its strategic position in SA Corporate Real Estate, acquiring an additional 130 million shares to take its holding to 229.6 million shares, equivalent to 8.7% of the total shares in issue. Controlled by the iGroup, which owns just over 64% of Emira, the move underscores continued consolidation and capital recycling activity in the sector.

Fairvest announced two earnings-accretive acquisitions, namely Jozini Mall and Tugela Ferry Mall in KwaZulu-Natal, for a combined R674 million at an attractive initial yield of 10.17%. SA Corporate added to this momentum by acquiring the Parks Lifestyle Apartments at Riversands, a 1 960-unit residential

complex near Steyn City, for R1.67 billion, while simultaneously disposing of Bluff Towers Shopping Centre for R544.6 million.

Meanwhile, Safari Investments unveiled plans to delist following a firm intention by Heriot REIT to acquire all remaining shares at R8 per share. The proposed deal, once approved, will see Safari become a wholly owned subsidiary of Heriot REIT, enabling a shift toward a development-led growth strategy despite reduced near-term dividends.

Across the board, results from Equites Property Fund and Spear REIT were well received by investors, reflecting improving property fundamentals and the positive impact of lower borrowing costs on distributable earnings, key drivers behind October’s strong sector-wide performance. 

SA REIT Conference 2026

The SA REIT Association’s biennial conference, proudly sponsored by Nedbank Corporate and Investment Banking’s Property Finance division, takes place on 12 February 2026 at The Houghton Hotel, Johannesburg. The keynote address, “Global REIT Dynamics: Innovation, Influence and Opportunity”, will be delivered by Peter Verwer, Executive Chairman of Futurefy. The agenda will examine capital access, innovation, local government risk, policy and the renewed relevance of REITs in the real economy.