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Listed property is the real economy’s barometer

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SAPOA Convention 2025 panel recap and what it means for South Africa’s REITs

South Africa’s listed property story is one of powerful cycles, resilience and renewal. From a market capitalisation of R3.8 billion in 1998 to more than R400 billion by 2017, the sector outperformed equities and bonds for long stretches before the 2020 correction erased as much as 70% of prices. The SAPOA Convention 2025 listed property panel unpacked this journey and drew a clear conclusion. While listed property is not a perfect proxy for the economy, it remains a credible barometer of real activity when dividend income, operating metrics and capital flows are properly accounted for.

SAPOA Convention 2025 listed property panel moderator Peter Clark (Founder, REdimension Capital) guided a frank conversation with Ian Anderson (Head of Listed Property and Portfolio Manager, Merchant West Investments and compiler of the informative SA REIT Chart Book), Kundayi Munzara (Executive Director & Portfolio Manager, Sesfikile Capital), Pranita Daya (Equity Analyst & Assistant Portfolio Manager, Truffle Asset Management) and Andrew Wooler (Chief Executive Officer, Burstone).

Their core message was measured but optimistic. Dividend growth is returning, balance sheets are better aligned to today’s rate environment and operating fundamentals are improving across many segments. Importantly, when dividends and reinvested income are included over time, no investor who stayed invested “lost money” in the sector. This is a powerful reminder that REITs are designed to channel recurring cash flows to investors, not to offer speculative punts on buildings.

What the cycle taught us

Anderson set the stage with a brief history of the capital super cycle that lifted the asset class for nearly two decades. The sector’s explosive growth was fuelled by income focused products that attracted household investors and by an era of abundant equity that culminated in 2015 to 2017. The correction that followed was severe, yet the recovery since late 2020 has been equally instructive. Listed property has regained leadership on a long horizon because income compounded through the downturn. The lesson is simple. Cash flow discipline beats price chasing.

A second lesson is that capital cycles differ by subsector. Convenience and township retail and logistics have proven more resilient. Office remains the laggard, yet the panel noted falling vacancies in select nodes such as Rosebank and Cape Town, early demand from business process outsourcing and a declining stock base. Patient capital that understands the clock may find value as conditions normalise.

Fundamentals first

Daya argued that on a dividend yield plus growth basis listed property screens well on a three-to-five-year view. Positive rental reversions are reappearing at quality assets, escalations are holding up where demand and supply are balanced and self-generated initiatives such as embedded solar have added durable revenue. Munzara expects low double digit total returns from direct property in South Africa over the cycle and believes listed vehicles can deliver slightly more because of professional asset management and governance.

Valuations remain a key talking point. On average the sector trades at a notable discount to reported net asset value, with wide dispersion across counters. The panel’s take was pragmatic. Private market evidence suggests book values are broadly sound, with an estimated R30 billion of assets sold at a slight premium to NAV in recent years by willing buyers and sellers. Where discounts persist, they often reflect leverage, asset mix, liquidity or a market view on management’s capital allocation record. Better disclosure and consistent definitions for metrics such as like-for-like growth and vacancies would help investors compare companies more cleanly.

Governance, alignment and data

There was strong agreement that governance has improved meaningfully. Crossholdings and related party complexities have reduced and reporting has matured. That said, panellists called for tighter alignment in remuneration and for simpler, standardised KPI definitions across REITs. Investors want transparent links between management rewards and long-term shareholder outcomes. They also want property level data that is comparable across portfolios. The industry has made progress, yet there is more to do.

Capital flows and the cost of money

Wooler noted that the cost of capital has reset globally. Easy equity has given way to a world where discipline in recycling capital, timing disposals and focusing on highest and best use is rewarded. Local banks remain willing lenders at competitive margins which supports private market transactions, yet disposal pipelines from REITs are likely to moderate after several busy years. The broader allocation question remains live. Property still accounts for a low single digit share of the JSE and of balanced portfolios. As policy risk recedes and the rate cycle turns, the panel is seeing growing investor engagement, but property must compete with attractive bond markets that also delivered double digit returns. That puts the onus on REITs to deliver credible, compounding earnings growth.

Why listed property still reads the real economy

Munzara made an important point about the economy that data often undercounts. A large informal sector feeds directly into retail and distribution performance, both of which are strongly represented in listed property cash flows. Industrial is increasingly geared to logistics rather than manufacturing which links it to consumption. Office reflects services sector health. Taken together, these channels make listed property a useful barometer of real activity provided investors look beyond share prices to the underlying cash generation.

Anderson summed up the outlook succinctly. Real dividend growth is returning for the first time in years as fundamentals improve, payout ratios normalise and interest rates ease. Add starting yields that remain elevated and double-digit total returns in the mid-teens are achievable on a three-to-five-year horizon.

The road ahead

The panel closed on a constructive note. Liquidity will always be lower than in banks or large caps and the sector will remain sensitive to capital cycles. Yet REITs have shown an ability to adapt. They have recycled assets, invested in operational efficiency, embraced renewable energy solutions and focused on tenant demand rather than speculative development. The result is a sector that is leaner, better governed and more attuned to investor needs.

For policymakers and city managers the message is equally clear. Credible local government, efficient basic services and predictable regulation are powerful enablers of REIT performance. For investors the takeaway is to focus on quality of cash flows, alignment of incentives and the discipline of capital allocation. For REIT executives it is to keep simplifying, keep standardising and keep telling the income compounding story that underpins the asset class.

Listed property is not the whole economy yet it remains a reliable barometer because it translates on-the-ground activity into cash that can be measured, distributed and reinvested. That is why a sector once written off in 2020 is again drawing interest. The signal from SAPOA 2025 is that the cycle has turned from repair to renewal. The work now is to turn renewed confidence into sustained, real returns.

Download Anderson’s presentation here.

SA REIT Conference 2026

The SA REIT Association’s biennial conference, proudly sponsored by Nedbank Corporate and Investment Banking’s Property Finance division, will take place on 12 February 2026 at The Houghton Hotel, Johannesburg.

This flagship event will convene REIT executives, investors, asset managers, policymakers and market experts to engage on the most pressing forces shaping the future of listed real estate. Topics will include global market volatility, access to capital, innovation, local government risks and the policy environment. With a focus on sector credibility and long-term investor relevance, the agenda promises strategic insight and practical direction.

A highlight will be the keynote address by Peter Verwer, Executive Chairman of Futurefy, titled Global REIT Dynamics: Innovation, Influence and Opportunity. He will explore how REITs worldwide are adapting to investor demands, digital transformation, sustainability imperatives and links to infrastructure and nation building. His perspective comes at a pivotal moment, following the relaunch of the Global REIT Alliance in Stockholm in September 2025.

Originally established in 2006 under the banner of the Real Estate Equity Securitization Alliance (REESA), the alliance has been revitalised under its new name to strengthen international collaboration, knowledge-sharing and industry advocacy. The SA REIT Association is a member of the Alliance.

Verwer’s address will provide valuable context for South Africa’s REIT sector within the global investment landscape.

Register here.

Spear REIT posts inflation-beating HY2026 growth

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Regional focus pays off as Spear REIT posts inflation-beating HY2026 growth

Spear REIT delivered a strong set of interim results for the six months ended 31 August 2025, supported by stable operational and financial performance, disciplined capital allocation, and continued portfolio growth. The results reflect a period of measured expansion and strategic investment, with Spear remaining the only regionally focused REIT on the JSE, operating exclusively within the Western Cape.

 Key Highlights – HY2026

  • HY26 DIPS growth vs prior period: 5.21%
  • HY26 DPS growth vs prior period: 5.21% (based on 95% payout ratio)
  • Interim distributable income per share: 43.78 cents
  • Interim distribution per share: 41.59 cents (95% payout)
  • Portfolio value: R5.7 billion
  • Portfolio GLA: 487 317 m²
  • YTD collection: 98.96%
  • Occupancy: 95.03%
  • LTV: 13.85%
  • TNAV: R12.10 per share

CEO Quintin Rossi said the first half of the 2026 financial year demonstrated Spear’s ability to balance growth and stability while delivering strategy-aligned outcome from the core portfolio.

“Our exclusive Western Cape focus is a deliberate strategy – it gives us deep local market insight, agility in execution, and the ability to be in close proximity to our assets and tenants,” Rossi said. “The region’s economic resilience, governance quality, and sustained demand for real estate solutions from drivers of economic activity across the board continue to underpin the performance of the core portfolio.”

During the period, Spear concluded R1.074 billion in strategic acquisitions — namely Berg River Business Park (Paarl), Consani Industrial Park (Elsies River), and Maynard Mall (Wynberg). The transactions add over 137 000 m² of additional GLA and will take Spear’s total portfolio to around 624 000 m² once transfers are finalised between October 2025 and January 2026. Acquired at an average yield of 9.54%, all three assets are accretive, meet Spear’s strict investment criteria, and will contribute immediately to distributable income once transferred.

Rossi added: “These acquisitions further strengthen our industrial and retail exposure – sectors where we continue to see consistent tenant demand and strong rental growth potential. Our focus remains on high-quality, cash-generative assets that align with Spear’s long-term distribution and value growth objectives which may also include further portfolio acquisition opportunities within the region.”

Spear’s occupancy rate remained firm at 95.03%, supported by collection rates of 98.96%. Portfolio valuations increased by R107 million, reflecting a 2% uplift over the period. Rental reversions were positive at 1.31%, signalling sustained tenant confidence across the portfolio.

By February 2026, 67% of Spear’s portfolio will be equipped with embedded PV solar infrastructure in line with Spear’s sustainability strategy as the business seeks to place less reliance on fossil-fuel-generated electricity supply whilst harnessing the attractive rate of returns its PV solar portfolio generates.

The company’s loan-to-value ratio of 13.85% and R749 million equity raise in June 2025 provides Spear with dealmaking capacity while maintaining a conservative balance sheet profile.

“Our prudent capital structure gives us flexibility to pursue growth opportunities while maintaining distribution sustainability,” Rossi said. “Liquidity and investor confidence have improved meaningfully, with Spear now trading at one of the narrowest discounts to Net Asset Value in the South African REIT sector.”

In the broader context, the South African REIT market has remained resilient through 2025, with the sector delivering a 14% total return year-to-date, supported by moderating inflation and stable interest rates.

Within this landscape, Spear’s focused Western Cape strategy and consistent DIPS growth position it ahead of sector averages, and it is well-placed to capture ongoing regional upside.

Spear’s long-term strategy remains secured in its Western Cape-only focus, with the REIT aiming to scale to R15 billion in assets under ownership and a market capitalisation of R9 billion over the next decade. Its potential inclusion in the FTSE/JSE All Property Index in March 2026 is expected to further enhance liquidity and institutional participation.

 Outlook

Looking ahead, Spear reaffirmed its FY2026 full-year DIPS growth guidance of 4% to 6%, with a payout ratio maintained at 95%.

“We will continue to prioritise high occupancy, disciplined cost management, and accretive capital deployment,” Rossi concluded. “Our focus is on consistent, predictable growth and delivering long-term value for shareholders through a well-managed, regionally focused portfolio.”

 

SA REITs extend 2025 rally with solid August performance

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Sector posts 2.4% monthly gain, year-to-date return climbs to 14.2% as investor confidence and capital flows return to listed property

South African Real Estate Investment Trusts (REITs) maintained their positive trajectory in August, gaining 2.4% and lifting the year-to-date return to 14.2%, according to the SA REIT Association’s August 2025 Chart Book. Although this lags the broader equity market’s 23.6% return so far this year, the performance remains impressive against a higher base created in 2024, when SA REITs delivered an exceptional 35.8% return compared with 13.4% from equities.

“The recovery in listed property has been broad-based and underpinned by a constructive global interest rate environment,” said Ian Anderson, Head of Listed Property and Portfolio Manager at Merchant West Investments and compiler of the Chart Book. “Lower bond yields are reducing the cost of debt, while strong share price gains are lowering the cost of equity capital. Together, these trends are giving the sector renewed financial flexibility.”

Capital raises signal renewed growth appetite

The improved backdrop has seen several REITs pursue both acquisitions and capital raising activity. Dipula announced the R478.1 million acquisition of Protea Gardens Mall and raised R559 million in early September through an accelerated bookbuild. Fairvest also secured investor support, raising R976 million to support acquisitions in KwaZulu-Natal and the Western Cape.

According to Anderson, these moves mark a turning point. “After several years in which raising equity was costly and limited, companies are once again able to raise sizeable amounts at attractive levels to fund acquisitions.” he said.

Trading updates show encouraging growth guidance

Dipula, Equites, Octodec, Redefine and Spear all provided trading updates to the market in August. While acknowledging muted domestic economic growth, management teams expressed optimism about their businesses’ prospects. Guidance included distributable income growth per share of 4% to 6% for Dipula (FY25), 5% to 7% for Equites (FY26), 3% to 6% for Octodec (FY25), 3% to 5% for Redefine (FY25) and 4% to 6% for Spear (FY26).

“These growth rates may appear modest by historical standards but given how scarce earnings growth has been across the sector in recent years, they are very encouraging,” said Anderson. “Investors have taken note, which explains part of the strong price gains over the past 18 months.”

Portfolio reshaping and results highlights

Growthpoint announced significant leadership changes, with Estienne de Klerk succeeding Norbert Sasse as Group CEO from July 2026 and José Snyders joining as Group CFO in January 2026. The company also disposed of its Capital & Regional stake, realising £50.5 million to strengthen its balance sheet and pursue select opportunities.

Accelerate Property Fund advanced its balance sheet strategy with the sale of the Buzz Shopping Centre and Waterford Centre in Fourways for R215 million, aligning with its broader portfolio repositioning objectives.

Resilient delivered a strong set of interim results for the six months ended 30 June 2025, declaring an interim dividend of 245.72 cents per share, up 12.2% on the prior year. The group reported like-for-like net property income growth of 8.6% across its South African portfolio, as well as double-digit income growth from both Lighthouse Properties and its French shopping centres. Management had guided expectations well, with the 2.3% share price gain in August broadly in line with the sector.

Outlook: Sustained double-digit returns within reach

With valuations more conducive to raising capital and a pipeline of acquisition opportunities emerging, activity levels in the sector are expected to accelerate into late 2025 and 2026. External growth through acquisitions has historically been a strong driver of returns. This is once again on the horizon.

“The sector is now well positioned to deliver distributable income growth above inflation over the medium term,” said Anderson. “Combined with attractive income yields, this should enable listed property to provide investors with double-digit total returns, even after the strong gains of 2024 and early 2025.”

Spear REIT Provides HY2026 Pre-Close Update

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Spear REIT Provides HY2026 Pre-Close Update: Strong Operational Delivery, Portfolio Growth and Balance Sheet Resilience

 Spear REIT has issued its pre-close update for the half year ending 31 August 2025 (“HY2026”), highlighting steady performance across its portfolio, continued growth through acquisitions and further investment into sustainability initiatives. The company stated that despite a challenging operating environment, results remain firmly on track with guidance currently tracking slightly higher than the midpoint of its market guidance for FY2026, supported by consistent operational execution and disciplined financial management.

Highlights

  • Distributable Income Per Share (DIPS) Tracker: DIPS tracking at 36.77 cents year to July, with distribution per share (DPS) to shareholders at 34.93 cents per share (95% payout ratio).
  • Operations: rent reversions across the combined portfolio were just under flat as tenant retention and rental preservation are prioritised; escalation rates nudged higher to 7.31% (from 7.27%); portfolio occupancy stable at 95% and expected to improve to 96–97% by period-end; cash collections remain strong at 98.45%.
  • Acquisitions: R1.08 billion invested into prime Western Cape properties (137,090m²) at an initial yield of 9.54%, adding quality scale to the portfolio.
  • Balance sheet: loan-to-value ratio at 14.26% pre-acquisition; interest cover ratio at 3.84x; liquidity of R400 million after commitments, maintaining ample flexibility.
  • Sustainability: solar coverage to grow to 67% of the portfolio, with 11 more systems under construction and recent acquisitions expected to lift this to around 70%.
  • Current portfolio profile: asset base of R5.58 billion, 487,317m² of gross lettable area, and 39 high-quality Western Cape assets.

Sector performance for the year to July 2025 underlines the portfolio’s resilience. Retail centres delivered 91.7% occupancy and like-for-like income growth of 12.2%, with strong rental uplifts of 13.7% driven by demand in convenience and destination formats, while larger apparel retailers increased their presence. The Commercial portfolio recorded 92.2% occupancy, with solid income growth of 7.0% despite negative rental reversions, cushioned by over 16,000m² of space successfully renewed and re-let.

 Industrial assets continued to show strength with 96.6% occupancy and positive rental reversions, even as income was temporarily impacted by a sustainability-linked vacancy at Mega Park. Expansion plans in Blackheath and George are progressing toward final approvals.

Key milestones during the period included a R749 million equity raise in June 2025 to support Spear’s asset growth plans and PV solar rollout strategy. During the period, management has successfully reduced borrowing costs and driven strong leasing momentum, which has improved the weighted average lease expiry and escalation metrics of the core portfolio. The pending integration of three new acquisitions — Berg River Business Park in Paarl, Consani Industrial Park in Elsies River, and Maynard Mall in Wynberg — is set to add 137,000m² to the portfolio and lift asset valuations to approximately R6.65 billion.

During the pre-close presentation, CEO Quintin Rossi commented:
“The first half of FY2026 reflects our team’s consistent execution in driving rental cashflows, managing risk, and growing our Western Cape-focused portfolio. While trading conditions remain tough, our strong balance sheet, recent acquisitions, and ongoing solar rollout position us to capture further growth and deliver sustainable returns to our shareholders.”

Spear also anticipates its inclusion in the JSE All-Property Index in March 2026, subject to confirmation, which would broaden its investor universe within the listed property sector and result in improved liquidity and greater market visibility.

Looking ahead, Spear reaffirmed its guidance for the full year, with distributable income per share expected to grow between 4% and 6% compared to FY2025, underpinned by disciplined asset management, selective acquisitions and a resilient Western Cape-focused portfolio.

 

Spear REIT’s Acquisition of Maynard Mall

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Spear REIT Expands Western Cape Retail Footprint with Acquisition of Maynard Mall

Spear REIT Limited (JSE: SEA), South Africa’s only regionally focused REIT, has announced the acquisition of Maynard Mall, a 25,969m² convenience shopping centre located in Wynberg, Cape Town. The R455 million transaction further reinforces Spear’s hyper-local investment strategy, targeting high-growth nodes across the Western Cape.

The acquisition aligns with Spear’s objective to grow its portfolio of well-located, high-quality convenience retail assets within the Western Cape. Maynard Mall, centrally located in Wynberg, Cape Town, is a convenience-orientated community shopping centre anchored by Shoprite, with a strong tenant mix comprising 70% national retailers — including Ackermans, Absa Bank, Clicks, Capitec Bank, KFC, Hungry Lion, Nedbank, Pep, Sportscene, and Zone Fitness — as well as essential services such as the Department of Home Affairs and local traders. The centre caters to both daily and weekly shopping needs, drawing from a broad residential catchment area and the commuter market, with an annualised footfall of 6 million shoppers.

“This acquisition is a pivotal extension of our retail footprint in Cape Town’s established Wynberg node,” said Quintin Rossi, CEO of Spear REIT. “It deepens our exposure to resilient consumer retail trade and enhances our income stability profile, supported by a weighted average lease expiry of 57 months.”

The anticipated transfer date is 1 January 2026, with the acquisition being funded through a combination of cash from Spear’s recent R 749 million capital raise and secured debt facilities. The transaction is set to deliver an initial yield of 9.55%, with an additional R20 million earmarked for medium-term capital expenditure. Spear has identified asset enhancement capital expenditure measures of up to R 20 million to be carried out over a three to five-year period to enhance the value proposition of Maynard Mall. These items include the potential increase in the self-storage offering, future expansion of the PV solar installation, modernisation of selected lifts, escalators, HVAC equipment and mechanical installations. Assuming the full asset enhancement capital expenditure is accounted for on the transfer date, the post capex, stabilised yield would be 9.15% – 9.3%.

“Spear has actively pursued growth opportunities in Cape Town’s convenience retail sector — on terms that aligned with its strategic and financial criteria; requiring management to remain patient, selective, and firmly committed to its investment strategy,” Rossi continued. “Today’s announcement gives credence to our approach.”

The transaction is subject to the approval by the Competition Commission. Once implemented, Spear’s retail portfolio will increase to approximately R1.4 billion in value, comprising 81,205m² in gross lettable area.

In addition to Maynard Mall, Spear recently announced the acquisition of Consani Industrial Park for R437 million. Following the implementation of both transactions, Spear’s loan-to-value (LTV) ratio is projected to be 28%, well below the company’s target range of 38%–43%, providing sufficient capacity for future growth opportunities.

These recent transactions follow the successful integration of Spear’s R1.15 billion Western Cape portfolio acquisition in October 2024, which expanded the group’s asset base to R5.5 billion and delivered 97% occupancy at FY2025 year-end. Following the implementation of the Maynard Mall and Consani Industrial Park acquisitions, Spear’s total asset base is expected to increase to R6.6 billion. Notably, Maynard Mall also includes a 924 kWp solar plant, supporting Spear’s sustainability strategy by contributing to energy efficiency and reducing environmental impact.

“Building on our strong FY2025 performance and positive momentum into FY2026, we remain focused on executing our Western Cape strategy — targeting high quality assets in established nodes underpinned by robust leasing and real estate fundamentals,” concluded Rossi.

Spear will continue to focus on measured growth across the Western Cape, with a focus on retail, commercial, and industrial assets that align with its long-term investment strategy.

Meet Emira’s New CEO: James Day

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Following the announcement of his appointment in May, James Day has formally assumed the role of Chief Executive Officer at Emira Property Fund (JSE: EMI), one of South Africa’s most established diversified real estate investment trusts (REITs). Day has served as a non-executive director of Emira since October 2023 and now moves into executive leadership with first-hand knowledge of the business’s strengths, priorities and market position.

“Emira is a business with strong fundamentals, a clear strategy and a highly capable incumbent executive team. It is positioned for continued, sustainable value creation,” says Day.

Day joins Emira’s leadership team alongside long-serving executives Ulana van Biljon, Chief Operating Officer, and Greg Booyens, Chief Financial Officer.

A Chartered Accountant with a strong foundation in finance and real assets, Day brings extensive local and international experience to the role. As a CA(SA), his career began in audit and finance with BDO/Grant Thornton in South Africa and the United States, and went on to include roles at Brookfield Asset Management and Elanor Investors Group in Australia.

Cape Town-born and bred, he returned to South Africa to work in the property sector, including as CFO of Botswanan-listed RDC Properties, which secured the successful takeover of Tower Property Fund during his tenure. Most recently, he served as Financial Director at Castleview Property Fund.

Outside the boardroom, Day enjoys the outdoors, travelling and long-distance running.

With an agile mindset and a focus on outcomes, Day brings a practical, adaptable and long-term approach to his new role. A systems thinker, he values foresight and risk mitigation, and works to cut through complexity and unlock performance efficiently and enduringly.

“What excites me about Emira is the strength of the team, the quality of the platform and the opportunity to keep delivering value by doing the foundational things right and sharpening our strategic edge where it matters most,” says Day. “Emira’s strategy remains consistent: keeping our capital productive through diligent asset management, disciplined capital recycling and continued value-accretive investment with the goal of meaningful stakeholder value creation.”