South African real estate investment trusts (Reits) rebounded strongly in April as renewed investor demand helped the sector return to positive territory after a volatile first quarter.
The sector delivered a total return of 5.9% in April, outperforming equities and bonds, and lifting year-to-date returns to 1.2%, according to the latest SA Reit Association Chart Book, compiled by Ian Anderson, head of listed property and portfolio manager at Merchant West Investments.
The rebound reflected a broader recovery across the property sector, with major indices regaining ground after a weak first quarter characterised by global market volatility and concerns about the interest rate outlook.
Though April’s gains did not fully reverse March’s losses, the performance boosted momentum and strengthened the investment case for Reits as improving operating fundamentals and renewed capital market activity continued to support sentiment.
The listed property sector took a big knock in March, as a broad-based pullback in major indices — driven by higher oil prices linked to the Iran war, a weaker rand, and rising inflation concerns — weighed on sentiment and dragged the sector back to levels last seen in October 2025.
“April’s rebound looked like a partial recovery from the previous month’s market derisking rather than the start of a new speculative rally. The underlying income and distribution recovery remains intact, even though share prices are likely to remain sensitive to bond yields, sentiment and company-specific execution,” Anderson said.
Monthly highlights
Among the highlights in April was Spear raising R1bn through an accelerated bookbuild that was oversubscribed multiple times. The shares offered were placed at R12.70 — slightly above the group’s 30-day volume-weighted average price (VWAP). The group said proceeds would partly fund the R442m acquisition of Watergate Centre, Mitchells Plain, and support further opportunities in the Western Cape.
In addition, Fairvest undertook a capital raise that secured R900m, well above its initial target of R500m. Its B-share offer was priced at a 5.5% premium to the 30-day VWAP, with proceeds earmarked for the Muller Group acquisition, investment into Onepath and debt reduction.
Specialist self-storage operator Stor-Age continued its expansion strategy with the R59m acquisition of Execustore in Ballito, adding 5,700m² of gross lettable area and additional land for development.
Oasis Crescent Property Fund reported a modest increase in annual distributions to 122.7c a unit for the year ended March, supported by rental growth in its industrial, retail and coastal portfolios.
Constructive phase
SA Reit Association CEO Joanne Solomon said recent activity suggests the sector is entering a more constructive phase after several years of balance-sheet repair and subdued growth.
“Stronger platforms are raising equity at premiums and deploying capital into accretive acquisitions, while specialist operators continue to grow through targeted, bolt-on transactions,” she said.
Improved sentiment towards the sector also coincided with a more stable global backdrop after geopolitical tensions and energy supply concerns unsettled markets in March. Oil prices eased during April, reducing some pressure on inflation expectations and global bond yields.
Locally, however, the outlook for interest rates remains uncertain after the Reserve Bank kept the repo rate unchanged at 6.75% in March, citing upside risks to inflation.
Still, Solomon noted that the sector’s longer-term investment case remains intact, underpinned by stronger balance sheets, improving distribution growth and renewed access to capital markets.
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