April 16 2026 11:00
DURBAN, SOUTH AFRICA
South African real estate investment trusts (REITs) gave back their early- year gains in March, declining 12.3% as the geopolitical conflict drove oil prices higher, weakened the rand and reignited inflation concerns across emerging markets. The pullback left SA REITs down 4.3% for the first quarter of 2026.
According to the latest SA REIT Association Chart Book for March 2026, compiled by Ian Anderson,
Head of Listed Property and Portfolio Manager at Merchant West Investments, the decline was broad-
based. Only Octodec (+4.4%), Oasis Crescent (+3.8%) and Fairvest A (+2.2%) ended the month in
positive territory. Equities and bonds also came under pressure, with the All Share Index down 10.5% and
the All Bond Index down 6.8%.
“The pullback in March was a valuation reset driven by geopolitical risk, not a deterioration in underlying
fundamentals,” said Anderson.
“Rolling 12-month distribution growth improved to 9.43% and 12-month total returns remain strong across much of the sector. This looks more like a period of market de-risking than a reflection of weakening company performance,” he said.
The geopolitical conflict that started on 28 February 2026, weighed heavily on global markets throughout March. The primary transmission mechanism to real estate is through oil prices and their effect on
inflation and interest rates. Brent crude rose above $100 a barrel for the first time since 2022, peaking at
around $119.50 a barrel on 9 March.
Joanne Solomon, Chief Executive Officer of the SA REIT Association, said the sector’s resilience should
not be underestimated despite the turbulence.
“The geopolitical conflict has introduced significant short- term uncertainty for all asset classes, not just real estate investment trusts. However, our sector enters this period of volatility from a position of strength, with improving distribution growth, healthier balance,” she said.
Globally, real estate investment trust prices declined an average of 12.5% in March, according to data
from Quoted Data. However, historical analysis suggests that geopolitical events tend to produce short-
term volatility rather than lasting damage. Across 40 major geopolitical events spanning 85 years, equity
markets lost an average of 0.9% in the first month but recovered to gain 3.4% over the following six
months. LaSalle Investment Management noted that real estate should remain relatively resilient given the ability of the asset class to pass through inflation into cash flows.
For South Africa, the conflict has complicated the macroeconomic outlook. The rand weakened more than
5% over the month, while economists anticipate inflation will accelerate as higher oil prices filter through
to fuel costs. The South African Reserve Bank’s rate-cutting cycle has been paused, though the duration
of the conflict will ultimately determine the extent of the fallout.
Solomon said: “South Africa is a net energy importer and rising oil prices feed directly into our inflation
basket. However, what differentiates real estate investment trusts is their ability to deliver income that
grows over time. With distribution growth approaching 10%, the sector offers a meaningful hedge against
the very inflation pressures that are causing concern.”
Despite the correction in share prices, March’s company announcements painted a constructive picture of
the sector’s operating performance. Growthpoint reported half-year distributable income per share growth of 2.3% and dividend per share growth of 8.5%, with South African vacancies improving to 7.2%.
Hyprop delivered distributable income growth of 12.9% and reiterated guidance for the upper end of its
full-year forecast.
Vukile announced that its subsidiary Castellana would acquire a 50% stake in Barcelona’s Splau Shopping
Centre for EUR175m, while its pre-close update showed South African net operating income up
10%, vacancies at just 1.7% and positive rental reversions of 3.5%. Burstone launched a pan-European
light industrial joint venture with Hines, seeded with six assets acquired for more than R760m.
Among the mid-cap counters, Fairvest indicated it is tracking toward the upper end of its 9% to 11%
distributable earnings guidance, while Spear reported occupancy of approximately 97%, cash collections
above 99% and R1.08bn of acquisitions completed during the period. Texton’s interim results pointed
to a cleaner, more focused platform, with South African net operating income up 4% and continued
expansion in self-storage.
“The results season has been broadly constructive,” Anderson said. “Improving vacancies, better income
growth, active capital recycling and a widening opportunity set across both larger and smaller counters
confirm that the weakness in March was market-driven rather than fundamental,” he said.
One of the most significant structural developments in March was the inclusion of Dipula, Octodec and
Spear in the FTSE/JSE All Property Index and the SA REIT Index, effective 23 March 2026.
Solomon said the inclusion is a meaningful milestone for all three association members.
“It reflects the growing depth of South Africa’s real estate investment trust universe. In addition, it creates a more representative benchmark for investors across strategies, including index-tracking and specialist REIT funds,” she said.
Anderson said: “Index inclusion generally improves visibility, strengthens institutional relevance and can
support additional demand from benchmark-aware investors. It is a meaningful sign that the SA REIT
market is deepening beyond its traditional large-cap core.”
Looking ahead, the trajectory of the geopolitical conflict remains the key variable for near-term market
sentiment, said Anderson.
“The duration of hostilities and whether the energy price increase passes through into core
inflation will largely determine the pace of recovery. Should the geopolitical conflict move toward a real
resolution, normalising oil prices and renewed confidence in the interest rate outlook could provide
meaningful upside for real estate investment trust valuations across both local and global markets. The next phase of returns is likely to be driven more by execution than by multiple expansion,” he said.
Funds with resilient retail and logistics exposure, disciplined leverage and credible capital allocation are well positioned.
“Distribution growth is improving, operating metrics are trending in the right direction and lower finance costs should continue to support earnings. March was a reminder that sentiment can shift quickly, but the investment case for SA REITs over the medium term remains compelling,” said Anderson.
Highlights from the SA REIT Chart Book March 2026
- SA REITs’ total return (March): -12.3%
- All Share Index (March): -10.5%
- All Bond Index (March): -6.8%
- Year-to-date return: -4.3%
- Distribution growth (rolling 12 months): 9.43%
- Top monthly performers: Octodec (+4.4%), Oasis Crescent (+3.8%), Fairvest A (+2.2%)
- 12-month performance leaders: Octodec (+67.7%), Redefine (+55.4%), Heriot (+54.9%)
- Index inclusion: Dipula, Octodec and Spear joined the FTSE/JSE All Property Index and SA REIT
Index
247@propertyflash.co.za
