SA REITs hold dividend momentum despite June dip

Key Takeaways

• SA REITs dipped 1.0% in June, trailing equities and bonds, driven largely by technical profit-taking.
• Dividend growth outlook remains strong, with several counters projecting mid-to-high single-digit income growth through FY2026.
• Sector fundamentals are solid, with signs of renewed capital access and optimism around lower interest rates.

Market Highlights - June 2025

After a strong rally in April, the South African REIT sector experienced a modest 1.0% pullback in June, underperforming equities (+2.4%) and bonds (+2.3%). Analysts point to profit-taking in liquid counters rather than any deterioration in fundamentals.

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“The June dip appears more technical than structural,” says Ian Anderson, Head of Listed Property and Portfolio Manager at Merchant West Investments.

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“Many of the more liquid stocks have performed exceptionally well over the last 18 months. Some rotation was inevitable, especially in a month with global risk-on sentiment.”

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Top Performers & Key Data

• Accelerate surged 17.8% in June, following the announcement of a R100 million rights offer to enhance Fourways Mall and strengthen working capital.
• Hyprop, Resilient, Redefine saw slight pullbacks of 2%, while Growthpoint and Vukile edged marginally lower.
• Fairvest, Stor-Age, and Vukile posted solid June results, forecasting mid-to-high single-digit distributable income growth into FY2025 and FY2026.

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“These are healthy forecasts,” Anderson adds. “We’re also seeing renewed access to equity capital, such as Spear’s successful R749 million raise, a sign of growing confidence.”

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Forward-Looking Outlook

• Dividend recovery continues, buoyed by stronger fundamentals and resumed payouts from counters like Fortress.
• Expectations of a South African Reserve Bank rate cut are gaining traction, aided by a stronger rand and lower oil prices.
• Lower funding costs and improved access to capital are expected to support valuations and income growth into 2026 and beyond.

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“Improving property fundamentals, lower interest rates, and cheaper capital access all point to stronger income growth,” concludes Anderson. “If current growth trajectories are maintained into 2026 and 2027, investors could see significant capital upside.”

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Free Download: June 2025 SA REIT Chart Book

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Brought to you by the SA REIT Association the official voice of South Africa’s real estate investment trust sector.

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