South Africa’s listed property sector mounted a strong recovery in 2025, delivering a total return of 30.74% for the year. The performance surpassed returns from bonds and cash and was exceeded only by equities in the domestic market.
The rally was driven by improved earnings, more disciplined capital management and lower interest rates, said Golden Section Equity Research.
“The gains were broad-based across the listed property sector, with most JSE-listed counters delivering solid returns and several recording increases well above the market average. Among the standout performers, Delta Property Fund showed a strong rebound as its turnaround strategy started to gain traction. Putprop posted notable gains, while Fairvest B shares also advanced meaningfully, supported by improved operating results and higher distributions,” said Golden Section Equity Research MD Garreth Elston.
The gains were broad-based across the listed property sector, with most JSE-listed counters delivering strong double-digit returns and several posting gains of more than 50%.
— Garreth Elston, Golden Section Equity Research MD.
Large blue-chip real estate investment trusts also posted strong gains. Growthpoint’s share price rose 42% during the year while Redefine advanced 37%, with both counters contributing materially to the property index’s performance, Elston said.
The JSE’s all property index ended 2025 at 12,061 points — its strongest closing level in five years — after touching a high in December as expectations of further interest rate cuts continued to support the sector. The index was up almost 25% for the year.
Elston said macroeconomic conditions played a role in resetting investor expectations. Lower inflation, interest rate cuts and South Africa’s removal from the Financial Action Task Force greylist materially improved the earnings outlook for highly geared property companies.
“Property fundamentals improved over the year. Vacancy rates fell across most portfolios, rental reversions stabilised and some segments turned positive. Industrial and logistics led gains, retail surprised on the upside and offices remained challenged, though office specialists saw strong returns,” Elston said.
Independent property analyst Keillen Ndlovu said the listed property sector was extremely active in 2025 with significant moves in the equity and debt markets as well as in direct property through disposals and acquisitions.
“It’s probably the most active year in terms of asset recycling (both acquisitions and disposals) since the pandemic. Initially, and after the pandemic, most Reits and property companies sold assets to help reduce debt levels, improve cash flow and fix balance sheets (lower their loan-to-value ratios and increase their interest cover ratios).
According to Ndlovu lower interest rates supported activity and several equity raises were oversubscribed, helping fund acquisitions by companies such as Spear, Dipula, Lighthouse, Vukile, Fairvest and Hyprop. He said renewed investor interest, with most property stocks trading at or above net asset value after the strong rally, made it easier for companies to raise equity.
Ndlovu said banks were increasingly active in funding transactions but faced competition from the cheaper bond market.
Looking ahead to 2026, Ndlovu said: “We anticipate total returns, including income and capital growth, in the lower teens, between 12% and 14%, despite the high base set by 2024 and 2025. Returns should be supported by earnings growth, assuming no material change in ratings. Lower South African bond yields will provide additional support and the full benefit of reduced interest rates is likely to be felt in 2026.”
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