SA REITs start 2026 strong as sector momentum builds

• SA REITs delivered positive returns in January, extending strong recovery momentum from 2025 as investor sentiment improves.
• Distribution growth turns positive while balance sheets strengthen across major listed property funds.
• Attractive yields and improving operating conditions position REITs well for 2026 despite expected market volatility.

Positive start to 2026 for listed Property Sector

South African Real Estate Investment Trusts (SA REITs) have begun 2026 on a constructive footing, continuing the recovery momentum seen through 2025 as investor appetite for yield assets returns.

According to the SA REIT Association Chart Book for January 2026, the sector delivered a total return of 0.9% for the month. While this trailed the broader equity market, with the JSE All Share Index rising 3.7%, the performance confirms ongoing sector stabilisation after several challenging years.

Ian Anderson, Head of Listed Property at Merchant West Investments and compiler of the Chart Book, says investor sentiment towards the sector is clearly improving.

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“The positive start to 2026 follows an exceptionally strong 2025 for the sector, supported by stronger balance sheets, stabilising distributions and gradually improving funding conditions,” says Anderson.

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SA REIT Chart Book - Key Highlights

‍The latest data highlights continued recovery trends across the sector:

• SA REIT Total Return (January 2026): 0.9%
• All Share Index Return: 3.7%
• Top Monthly Performers: Attacq (+6.7%), Oasis Crescent (+4.5%), Redefine (+4.0%), Heriot (+3.4%), Growthpoint (+3.1%)
• 12-Month Leaders: Delta Property Fund (+129.4%), Growthpoint (+60.5%), Fairvest B (+59.2%)
• Yield Environment: Long bond yields remain stable, keeping REIT income yields attractive relative to bonds and equities.

Crucially, distribution growth has now turned positive on a rolling basis, suggesting sector recovery is increasingly supported by operational cash flows rather than only valuation recovery.

What Is driving performance?

January’s gains were mainly driven by share price appreciation as investor sentiment improved amid easing inflation expectations and hopes for further interest rate cuts in 2026.

A stronger rand and moderating inflation have also improved investor confidence in rate-sensitive sectors such as listed property.

REITs continue to function as hybrid assets, offering income stability while retaining equity-like upside, making them attractive in a low-growth but stabilising economic environment.

Operational improvements are also playing a role, with better cost management, improved tenant activity and stabilising retail footfall supporting earnings.

Importantly, sector conversations are shifting away from survival and restructuring towards growth opportunities.

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As Anderson notes: “This is now the space where the industry challenges assumptions and focuses on growth, data monetisation and the future of South African property. The fact that the upcoming sector conference sold out early shows sentiment has clearly shifted.”

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Looking ahead to 2026

Despite expected market volatility, the sector enters 2026 from a position of strength compared with recent years.

Balance sheets have improved, asset quality has strengthened through active portfolio management, and valuations remain attractive relative to other asset classes.

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Anderson concludes: “The January data confirms SA REITs are once again positioned to play a meaningful role in diversified portfolios as both income generation and capital growth prospects continue to normalise.”

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With income growth returning and funding pressures easing, listed property is steadily regaining investor confidence.

DOWNLOAD the SA REIT Chart Book
Investors can download the full SA REIT Association Chart Book for  January 2026 for detailed sector insights and performance data via the SA REIT Association website.

For investors seeking income and recovery upside, SA REITs are firmly back in focus as 2026 unfolds.

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