Sector moves back into positive territory year to date, supported by improving fundamentals, growing corporate activity and an easier global risk backdrop
South African real estate investment trusts (REITs) recovered ground in April 2026, delivering a total return of 5.9% for the month after the previous month’s correction. The performance comfortably outpaced equities, with the All-Share Index returning 1.6% and bonds, with the All-Bond Index returning 3.3%, lifting SA REITs back into positive territory at 1.2% year to date.
According to the latest SA REIT Association Chart Book April 2026, compiled by Ian Anderson, Head of Listed Property and Portfolio Manager at Merchant West Investments, the recovery was broad-based, with most counters ending the month higher and rolling 12-month distribution growth holding firm at 9.40%.
“April’s rebound looked like a partial recovery from the previous month’s market de-risking rather than the start of a new speculative rally,” says Anderson. “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.”
Capital markets reopen for the sector
April’s most important theme was the reopening of the equity capital market for selected SA REITs, with two of the largest accelerated bookbuilds in recent months meeting strong institutional demand.
Spear raised R1 billion through an accelerated bookbuild that was multiple times oversubscribed, with shares placed at R12.70, a slight premium to the 30-day volume-weighted average price (VWAP). The proceeds will be used to fund the R442 million acquisition of Watergate Centre in Mitchells Plain, alongside further Western Cape acquisition, development and asset-management opportunities.
Fairvest followed with its own accelerated bookbuild, initially targeting R500 million but ultimately raising R900 million on the back of strong demand, with the new B shares placed at a 5.5% premium to the 30-day VWAP. Proceeds will be applied to the Muller Group acquisition, further investment in Onepath and debt reduction.
“Spear and Fairvest were able to raise a combined R1.9 billion in oversubscribed offerings, at premiums or minimal discounts to market pricing,” Anderson notes. “That was an important signal that institutional appetite for the sector had improved materially after the volatility of the first quarter.”
Strategic stake-building and bolt-on growth
Corporate activity was the other defining feature of April. The most notable development was the Emira-Octodec transaction, in which Emira, through Freestone Property Investments, acquired a 20.17% stake in Octodec for approximately R891.8 million and launched a voluntary cash offer for up to a further 14.73% at R16.75 per share. If fully accepted, Emira’s holding would rise to 34.9%, just below the threshold that would trigger a mandatory offer. Octodec’s board responded that the offer undervalues the company relative to its reported net asset value of R24.55 per share and indicated that directors who hold shares do not intend to tender. Emira subsequently acquired a further 2.89 million Octodec shares on market while preserving the same 34.9% cap.
Stor-Age continued to execute on its specialist growth strategy, announcing the acquisition of Execustore in Ballito for R59 million, adding 5,700 m² of gross lettable area in a high-growth KwaZulu-Natal node, with a further 6,600 m² of adjoining land available for future expansion.
Oasis Crescent reported audited results for the year ended March 2026, with its full-year distribution increasing modestly to 122.7 cents per unit. The fund’s ungeared, Shari’ah-compliant structure remains differentiated within the sector and management highlighted rental growth across its industrial, retail and coastal portfolios, alongside progress on the Sacks Circle logistics redevelopment, which is expected to be completed by December 2026.
Joanne Solomon, Chief Executive Officer of the SA REIT Association, says the breadth of activity through April reflects renewed confidence in the sector’s growth trajectory. “April demonstrates the sector is moving back into a phase of active 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. The fact that recent capital raises were heavily oversubscribed, at premiums to market pricing, points to the depth of institutional confidence that has built up around real estate investment trusts over the past 18 months. That is a meaningful change from where the sector stood two years ago.”
A more constructive global backdrop
The improvement in sentiment was supported by an easing of the geopolitical tensions that had unsettled markets in March. Energy-supply concerns receded as oil prices pulled back from their March highs, removing some of the upward pressure on inflation expectations. Internationally, listed property markets followed a similar pattern, with global REIT data continuing to point to resilient operating fundamentals across data centres, self-storage, retail and industrial real estate even through the earlier volatility.
Domestically, the South African Reserve Bank held the repo rate at 6.75% on 26 March, citing upside risks to the inflation outlook. While the SARB’s quarterly projection model continues to point to a gradually lower rate path, near-term cuts have become less certain. Real estate investment trusts remain sensitive to this rate path, given the importance of bond yields and funding costs to the sector’s relative valuation.
Solomon adds: “The macro picture is more nuanced than it was a few months ago, however, the structural case for SA REITs remains intact. Distribution growth approaching double digits, healthier balance sheets, a broadening investable universe and the ability to raise capital positively are all features of a sector in a far stronger position than it was two years ago. That is why investors continue to engage with the sector through periods of volatility, rather than retreating from it.”
Outlook
Looking ahead to the remainder of 2026 and into 2027 Anderson expects the next phase of returns to be more selective.
“Distribution growth has recovered, operational metrics across much of the sector continue to improve and lower funding costs should provide support if the interest-rate cycle remains favourable,” he says. “At the same time, the easy part of the re-rating may now be behind the sector. The next phase of returns is therefore likely to be driven less by broad multiple expansion and more by execution. Funds with resilient retail, logistics and self-storage exposure, disciplined leverage, low vacancies and the ability to raise and deploy capital judiciously should remain best placed to deliver sustainable real distribution growth into 2027.”
Highlights from the SA REIT Chart Book April 2026
• SA REITs’ total return (April): 5.9%
• All Share Index (April): 1.6%
• All Bond Index (April): 3.3%
• Year-to-date return: 1.2%
• Distribution growth (rolling 12 months): 9.40%
• Top monthly performers: Fortress B (+10.0%), Oasis Crescent (+9.7%), Dipula B (+8.3%), Vukile (+8.0%) and Octodec (+7.9%)
• Capital raising: Spear (R1 billion) and Fairvest (R900 million) accelerated bookbuilds completed at premiums or minimal discounts to market pricing
• Strategic activity: Emira acquired a 20.17% stake in Octodec and launched a voluntary cash offer that could lift its holding to 34.9%
The SA REIT Association Chart Books are available for download here.
SUPPLIED.
