SA’s listed property sector is expected to deliver positive returns in the months ahead, but momentum is becoming increasingly fragmented, the August Golden Equity research review shows.
Though the JSE’s SA listed property index firmed 2% in August, buoyed by interest rate cuts, the research review cautioned that deep-rooted structural weaknesses in the local economy continued to overshadow the sector’s cautiously upbeat outlook for the rest of 2025.
“The sharp decline in public investment and pressure on the construction industry threaten property demand, while weak consumer confidence means recovery in retail will be slow and challenging,” said Golden Section Equity Research MD Garreth Elston.
Citing a recent Nedbank report on capital expenditure projects the review delivered a stark warning, revealing that the value of new capital projects stood at an annualised R316.2bn — a dramatic fall of nearly R592.2bn compared with the same period in 2024, he said.
“The collapse in new public project announcements shows that, despite lower capital costs, demand for new space is weakening. August’s market rally seems driven more by financial factors like low interest rates and existing yields than real economic growth,” Elston said.
Among the biggest developments in the sector last month was Prime Kapital’s move to boost its stake in MAS to 49.4%, after a voluntary offer of €1.40 (R28.70) per share. The deal came as MAS reported results highlighting a €173m bond maturity in May 2026 and a projected €50m liquidity shortfall by June next year — despite efforts to bolster cash reserves.
“Of concern is how Moody’s and Fitch have the company on negative watch, with Moody’s placing the rating under review for downgrade in July. The weighted average debt maturity of only 2.9 years creates refinancing risk, particularly given the credit rating pressures,” Elston said.
The deal closed the door on a rival offer from Hypro , which withdrew after MAS declined to disclose its full development joint venture (DJV) agreements with Prime Kapital.
Portfolio manager at Mazi Asset Management, Kopano Makhu, told Business Day that Prime Kapital outmanoeuvred Hyprop by putting forward multiple offers, each more favourable than the last. “Prime Kapital was far more competitive in their bid. They kept coming back with better terms for MAS shareholders.”
While some felt Hyprop could have fought harder, Makhu said management likely read the room. “If you ask a fair number of Hyprop shareholders whether they’d support a deal for MAS at an effective price above R25 per share, they’d say no — “it would’ve been too dilutive”.
Instead, Makhu said Hyprop’s focus should now shift to executing its present capex programme, particularly in solar energy and centre resilience.
Meanwhile, during the month, Growthpoint placed all of its NewRiver Reit shares (67.4-million), which it acquired as part consideration for selling its stake in Capital & Regional, at a price of 75p (R17.70) per share — raising gross sale proceeds of £50.5m.
In addition, it announced a new renewable energy initiative that will make it the first landlord to wheel renewable power directly to tenants, sourced from a 195GWh power purchase agreement with Etana Energy.
Tenants will receive renewable energy certificates in a secure digital wallet, allowing them to either use the certificates to offset their own carbon emissions for ESG reporting purposes or trade them on the open market.
“Strategically, this gives Growthpoint a competitive edge in the office market. It offers tenants access to cost-competitive, zero-carbon energy, supports their ESG compliance, and introduces a potential new income stream,” Elston said.
In its 2025 results, Accelerate announced a R90.7m impairment associated with a related-party agreement, pushing the group’s losses beyond R1.2bn.
“Accelerate remains in repair mode. While vacancies and debt have improved, recurring cash flows remain under pressure. High gearing, weak rentals and related-party impairments continue to weigh on net asset value and funds from operation. With no dividend declared, management is focused on asset disposals, deleveraging, and stabilising Fourways Mall,” the review reads.
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