SA REITs surge in April as ‘Rate Cut’ hopes ignite Investor Optimism

Top 3 Bullet Points

• South African REITs rallied 6.9% in April, outperforming equities (4.3%) and bonds (0.8%).
• Investor sentiment lifted by expectations of interest rate cuts and accelerating distributable income growth.
• Over R12.2 billion in turnover showed strong demand, with SA Corporate leading gains at 15.3%.

The South African Real Estate Investment Trust (REIT) sector saw impressive growth in April, posting a 6.9% increase. This performance outpaced both equities (4.3%) and bonds (0.8%) despite disruptions due to public holidays.

Investor sentiment was fuelled by expectations of strong growth in distributable income and the anticipated interest rate cuts from the South African Reserve Bank (SARB).

Ian Anderson, Head of Listed Property and Portfolio Manager at Merchant West Investments, and compiler of the SA REIT Association’s monthly Chart Book, noted:

‍

“This was a standout month for the sector. It continues to offer value, trading at historically high discounts to net asset value (excluding the COVID-19 period).”

‍

Trading activity in the sector remained robust, with over R12.2 billion in turnover marking the highest monthly volume for 2025 so far. This signals strong investor interest despite a challenging macro environment.

Leading the pack, SA Corporate delivered the highest return at 15.3%, followed by Attacq (+13.3%), Resilient (+10.9%), and Redefine Properties (+10.5%).

According to Anderson, while company-specific news was sparse, the favorable macroeconomic and political conditions played a significant role in driving performance.

In April, consumer inflation fell below the SARB’s lower target range, strengthening the expectation of an interest rate cut at the upcoming Monetary Policy Committee meeting in May. The market is now anticipating at least one more cut later this year. Anderson remarked.

‍

“Lower interest rates support property valuations by reducing discount rates and should also foster distributable income growth across the sector in 2025 and 2026, especially with loan-to-value ratios ranging from 35% to 40%.”

‍

A stronger rand, coupled with lower oil prices, is likely to keep inflation subdued, giving SARB more room for rate cuts. Additionally, the proposed 0.5% VAT increase, introduced in the Budget Speech, has been suspended following opposition within the government.

On the international front, easing trade tensions between the US and China, alongside the US decision to delay tariffs on several countries, boosted global market sentiment, positively impacting SA REITs.

On the corporate side, Accelerate and Delta revealed further asset disposals to bolster their balance sheets, while Emira announced the departure of CEO Geoff Jennett due to strategic differences with the board.

Meanwhile, Vukile, through its subsidiary Castellana Properties, expanded its offshore retail portfolio with the acquisition of Forum Madeira in Portugal for €63.3 million.

For detailed analysis
DOWNLOAD SA REIT Association Chart Book for April 2025

‍