South Africa’s listed property sector has staged a comeback, ending the year not only having clawed back lost ground but also resetting its long-term growth trajectory.
The revival comes as the country’s macroeconomy gains traction. Being removed from the Financial Action Task Force (FATF) greylist, receiving a credit rating upgrade from S&P, and riding the momentum of a successful G20, despite a US boycott, have created an environment ripe for increased capital flows.
The latest Global Property Research (GPR) figures show South Africa delivering a 44.7% return over the past year.
“The Global Reit index is up 12% year to date — respectable but still well behind South Africa’s performance. The US Reit market has returned 9.2%, the UK 10.3% and Australia 22.9%. Even Japan — one of Asia’s standout performers this year — trails South Africa at 27.4% year to date,” the SA Reit Association said.
For more than a decade, asset selection has been the defining driver of property performance in South Africa. It has accounted for 77% of relative portfolio returns since 2009 — well ahead of the US (65%), Europe (66%) and the UK (62%), according to the latest analysis from the SA Property Owners Association (Sapoa) based on MSCI data.
The sector’s domestic run also outpaced other major asset classes last year. The listed-property index delivered a 29% total return in 2024, placing it comfortably ahead of equities and bonds and underscoring a decisive shift in investor sentiment.
According to the association, the long-term performance paints an equally striking picture. South African Reits have delivered annualised returns of 20.6% over three years and 23.6% over five years — dwarfing the global five-year average of 7.3%, with the UK languishing at minus 0.3% and Europe at 1.9%.
“The numbers we are seeing now are the dividends of discipline,” said SA Reit Association CEO Joanne Solomon. “This performance reflects five years of rigorous execution by management teams across the sector. When faced with the headwinds of the pandemic and prolonged economic uncertainty, the industry didn’t sit back and wait for conditions to improve — management teams actively strengthened balance sheets and stabilised portfolios.”
In South Africa, volatility is 0.20, on par with France and slightly above the European composite at 0.18, providing a stable backdrop for returns. SA Reits are thus delivering a strong performance without taking on unusually high risk, the association said.
South Africa’s office recovery is also ahead of many other markets, quietly turning a corner while much of the world continues to struggle. Vacancy rates have improved since 2022, driven by controlled new supply and active portfolio management. Office property markets — particularly in the US and Europe — are facing challenges stemming from hybrid work and uneven tenant demand, the Sapoa report notes.
“As Reits and property companies begin trading closer to their net asset value (NAV) — with the current discount about 7.6% — it becomes easier to execute direct property transactions and raise additional capital. The sector has already seen just over R11bn in new equity raised year to date,” said independent property expert Keillen Ndlovu.
Ndlovu said loan-to-value ratios have fallen to about 37%, down from a pandemic peak of about 44%, driven by a combination of asset disposals to reduce debt and rising direct property values over the past two years.
“Reits and property companies are in a better shape and more comfortable space now,” he said.
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