August 6 2025 16:45
The SA listed property sector returned a total 4.38% including share price appreciation and dividends in July. This was driven by specific corporate updates and events and not a broad market updraft. This is according to Garreth Elston of Golden Section Capital.
The month’s headline economic news came right at the end of the month, with a 25 basis point repo rate cut by the Reserve Bank, which came too late to have any real effect on the period’s performance. The cut to 7.00% will give a psychological boost and a modest tailwind for future debt costs.
“The real story of July was a widening gulf between companies engaged in value-destructive governance battles and those executing disciplined, value-accretive strategies,” Elston said.
The month was dominated by the battle for MAS plc, the east European mall owner. A bloc of institutional investors, holding over 17% of the company, requisitioned a second extraordinary general meeting to overhaul a board they see as beholden to development partner, Prime Kapital (PKI), Elston said.
“The board’s subsequent refusal to provide the full, unredacted Development Joint Venture (DJV) agreement to a bond fide bidder was a fatal obstacle to Hyprop’s offer”, Elston said was his opinion.
Hyprop withdrew, citing it would be a dereliction of its fiduciary duties to proceed without seeing the key documents governing nearly half of MAS’s assets. “The situation is now a straightforward battle for control, with the second extraordinary general meeting scheduled for August 27 2025 as the decisive event, barring another offer,” Elston said.
July underscored the property market’s tow-tier nature, with Growthpoint, Resilient and Vukile seeing solid rises post their financial updates at the end of June. Smaller and thinly traded stocks like Visual, Castleview, Delta and Putprop saw moves on thin trade and little hard news. Castleview traded its first on market shares since October last year, and Visual went from 1c to 2c a share.
Elston said Spear Reit announced two major Western Cape acquisitions in the industrial and retail sectors for nearly R900m combined. Hammerson upgraded its full-year earnings guidance and acquiring full control of the Bull Ring estate. Shaftesbury Capital’s interim results, confirmed the dramatic balance sheet repair following its partnership with Norges Bank which was completed back in April.
“These actions reflect clear, focused strategies,” Elston said.
“July’s performance was not about a rising tide. It was a story of individual companies either getting their houses in order or seeing them fall into further disarray. The forward outlook may be slightly brighter thanks to the Reserve Bank, but company specific execution and governance remain the definitive factors for investment returns,” he said.
247@propertyflash.co.za
