After a slow start to the year SA’s listed property sector bounced back in April, with the SA listed property sector index (Sapi) up 6.44% and the all property index rising 6.54% as inflation eased and investor confidence improved.
Despite the losses in early April due to trade war fears, the Sapi rebounded after a 90-day US tariff pause eased market tensions.
According to a recent Golden Section Capital equity research report, improved sentiment in emerging markets also helped boost local property stocks.
“While still below its 52-week high, the all property index’s April gains point to rising investor confidence, supported by easing inflation and improving property fundamentals. Inflation dropped to 2.7%, well below the SA Reserve Bank’s 3%—6% target range, despite muted GDP growth,” Golden Section Capital MD Garreth Elston said.
The tariff announcement sent the Sapi down 5.36% by April 7, but it quickly rebounded as investor sentiment recovered later in the month, the report says.
Elston pointed out that the real concern was not the tariffs, but the uncertainty they caused. With no clear direction on trade or diplomacy, investors and developers chose to wait things out.
“Real estate transactions slowed, global GDP forecasts for 2025 were downgraded and central banks faced a tough balancing act: rising inflation from costlier imports and slowing growth made it harder to adjust policy,” Elston said.
While April saw fewer earnings reports, SA Reits still delivered stronger performance, with steady rent collections, normalised pay outs and healthier balance sheets, supported by debt reduction and asset sales.
“Despite this, many Reits continue to trade at deep discounts to net asset value, which — combined with improved fundamentals — has increasingly attracted value-oriented investors. Strong governance, reduced leverage and forward-looking asset strategies position the sector to weather shocks better than in prior crises, but local property will not be immune from the impact of global shocks,” the report reads.
Last month, the SA Reit Association noted that while global sentiment shifts could affect local markets, SA Reits are expected to deliver solid income returns of 8%—9% in 2025 — offering investors dependable value in an uncertain climate.
“Investors navigating the sector must balance the appealing valuations and improving fundamentals against a backdrop of unusually high global uncertainty and specific domestic policy uncertainties,” the report said.
The rest of 2025 is likely to be influenced by a mix of SA’s strengthening local fundamentals — such as improving property metrics, stronger balance sheets and relative political stability under the government of national unity — and ongoing global trade volatility, the report noted.
“Until greater clarity emerges on the international trade front, a focus on resilient sectors and locations, and enhanced operational efficiency, will likely remain the key strategies for listed property companies and investors alike,” according to the report.
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