The JSE-listed property sector took a knock in March, as a sharp pullback in major indices dragged the sector back to levels last seen in October 2025.
The all property index fell 12.16% while the South Africa listed property index declined 11.41%, wiping out the gains recorded in January and February and reversing the sector’s early momentum.
“The critical question for March is not whether the recovery has been damaged — it clearly has, at least at the margin — but whether it has been fundamentally derailed. On balance, the answer is no. The underlying operational improvements that drove the recovery remain intact,” according to the Golden Section Capital equity research March review.
The setback comes as the sector had been staging a steady recovery after years of balance sheet strain, distribution cuts and deep net asset value write-downs.
Listed property delivered a return of 28.8% in 2024 and followed it with a further 30.7% into early 2025, translating into a cumulative gain of 68.5% across 2024 and 2025.
By the end of February this year, total market capitalisation had crossed R754.5bn, with distributions recovering to double-digit levels ― reinforcing signs that, despite the March pullback, the sector’s underlying recovery trajectory remains intact.
However, the South African Reserve Bank’s decision to hold interest rates at 6.75% in March, while widely expected, introduces a degree of discomfort for the sector.
Golden Section equity research noted that much of the recent rerating in listed property had been predicated on a declining interest rate cycle, leaving the sector exposed to any delay in monetary easing.
Recovery on hold
“The recovery thesis has been interrupted. The rate tailwind that powered an 88% cumulative gain over two years has, at minimum, paused. For individual listed property companies, the risk profile is uneven. Those with predominantly domestic income, long weighted average lease expiries, fixed-rate debt and low near-term refinancing requirements are best insulated from the current headwinds,” the review says.
The recovery hinges on broader stability, the review notes. Unless the Iran conflict is contained, rising oil prices could trigger a self-reinforcing inflation shock, making it harder for the Bank to resume easing.
Heriot recently reported record distributable earnings growth of 16.3% and upgraded full-year distribution per share (DPS) guidance to 14%-17%. Resilient delivered 11.4% annual dividend growth and Hyprop reported a 12.9% increase in distributable income for its half year and remains on track to deliver on the upper end of its guidance of 10%-12%.
“For investors, the appropriate approach is caution. This does not mean exiting the sector, but being deliberate — focusing on balance sheet strength, debt profiles and companies that benefited most from the recovery rerating. Those with thin interest coverage, sizeable near-term refinancing needs, or significant offshore exposure in conflict-adjacent countries warrant close scrutiny," the review says.
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