SA REITs Post 1.6% Gain in September as Distribution Growth Hits 11.09%

South African real estate investment trusts delivered a 1.6% return in September, outpacing the broader equity market during a month when the All-Share Index dropped 5.8% and the All-Bond Index remained flat. The sector climbed back into positive territory for the year to date with a 4.0% return, supported by heavy trading volumes reaching R16.2 billion. According to data compiled by Ian Anderson of Merchant West Investments for the SA REIT Association Chart Book, the month's performance highlighted defensive appeal as investors faced rising interest rates locally and internationally.

Income Growth and Results Season Highlights

Rolling 12-month distribution growth increased to 11.09%, up from 10.58% in the previous quarter. This marks the sixth consecutive quarter where growth exceeded inflation, achieving the highest reading since 2017 when excluding pandemic-era distortions. Major sector participants released full-year financial updates during the month. Fortress reported a 10.1% increase in its dividend alongside a loan-to-value ratio drop to 34.0%, while Hyprop lifted its dividend by 14.4% and improved its loan-to-value ratio to 28.5% following retail asset disposals. Attacq grew normalised distributable income per share by 15.5% and raised its occupancy rate to 94.9%. Vukile's pre-close update indicated expected South African like-for-like net operating income growth of 8.5%, alongside positive leasing conditions in Iberia.

Capital Recycling and Leasing Trends

Property owners actively adjusted portfolios through strategic disposals and capital management during September. Growthpoint lowered its South African loan-to-value ratio to 30.2% following R4.9 billion in asset sales, while Burstone transacted R5.4 billion of retail and industrial assets into a new platform with Nedbank Property Partners. Fairvest expanded its holdings by acquiring two Shoprite-anchored KwaZulu-Natal malls for R702 million. Meanwhile, the office sector continued to lag, prompting Accelerate to sell Cedar Square and KPMG Crescent to reduce debt. Mid-cap counters also saw continued cross-holdings development, including Emira holding stakes in Octodec and SA Corporate, and Fairvest holding shares in Dipula.

Source: SA REIT, 1 October 2026.

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