South Africa’s real estate investment trust (Reit) sector crossed the R350bn market capitalisation mark in February as capital returns to the real estate sector.
The Reit sector rallied 8.1% last month, extending a strong run.
The gains build on momentum that has gathered pace over the past year, supported by improving operating fundamentals across retail and logistics assets and expectations that the interest-rate cycle is becoming more supportive for income-focused sectors.
Portfolio manager at Merchant West Investments and compiler of the SA Reit Association Chart Book, Ian Anderson, said the milestone reflects the sector’s strengthening fundamentals.
“The total market capitalisation of publicly traded South African Reits surpassing R350bn is a significant milestone,” Anderson said, adding that it highlights the sector’s recovery and landlord pricing power in a falling interest-rate environment. Distribution growth stands at about 8.06% on a rolling 12-month basis, he said.
The Reit sector also outperformed other local asset classes in February. Listed property rose 8.1%, compared with 7% for equities and 1.7% for bonds, signalling improving investor sentiment toward the sector.
Independent property analyst Keillen Ndlovu said asset managers have shifted their positioning on listed property with more funds now moving into overweight positions.
“Two years ago, 48% of fund managers were underweight on the South African real estate investment trust sector, but today that picture has changed completely with only 12% underweight and 40% now overweight or neutral-to-overweight,” Ndlovu said.
The sector has also attracted fresh capital. According to the SA Reit Association, listed property companies raised more than R11.4bn in 2025 through heavily oversubscribed bookbuilds, while discounts to net asset value have narrowed to an average of 3%-4%.
Scott Muzzell, head of the listed property sector in real estate investment banking at Rand Merchant Bank, said the sector is gradually returning to its traditional model, where listed property groups act as large capital aggregators while private developers focus on development activity.
“For much of the last decade, the South African listed property sector has felt more like a fort under siege, with high interest rates, stretched balance sheets, and steep discounts to NAV [net asset value] stalling the usual flow of capital between private developers and public funds,” Muzzell said.
“For much of the last decade the South African listed property sector has felt more like a fort under siege, with high interest rates, stretched balance sheets and steep discounts to NAV stalling the usual flow of capital between private developers and public funds,” Muzzell said.
February also saw strong corporate activity across the sector. Top performers included Heriot Reit and Accelerate Property Fund, both gaining more than 25%, while Redefine Properties, Fairvest B and Hyprop Investments posted double-digit increases.
On the corporate front, Growthpoint Properties sold its 55% stake in Discovery phase one for R2.32bn, reducing its office exposure in Gauteng and Sandton while generating net proceeds of about R2bn after the phase two acquisition.
Meanwhile, Vukile Property Fund’s Spanish subsidiary Castellana Properties agreed to acquire the Islazul Shopping Centre in Madrid for €318m marking a further expansion into the Spanish retail property market.
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