What the fall of Rebosis still teaches property investors about gearing

SA REITs returned more than 30% in 2025 and the sector is in the middle of a strong results season, which makes this a good moment to remember how badly listed property can go wrong. This week Property Flash editor Alistair Anderson published a look back at Rebosis Property Fund, which he describes as the JSE's most disappointing REIT since 2016. Rebosis listed in 2011 with seven properties worth R3.3 billion and at its peak marketed a R23 billion portfolio of South African and English malls. A share price assumed at about R11.50 in a 2016 deal circular had fallen to 16 cents by August 2022, when the company entered business rescue. It was delisted in July 2025.

Gearing left no margin for error

The clearest lesson is about debt. According to Property Flash, loan-to-value rose from 51.6% in August 2018 to about 72% by 2022, the highest among listed property funds. A R4.9 billion acquisition in 2016 was funded with R3.7 billion of new debt and a R1.2 billion equity raise. When valuations then fell, there was no cushion. Compare that with today's sector: Fortress is at 34%, Growthpoint's South African book at about 30% and Fairvest at under 27%. Anderson's view is that a loan-to-value above 50% leaves no room for a valuation shock.

Tenant and geographic concentration

The other pressures were about where the income came from. UK shopping centres were written down by about 30%, which the Financial Mail put at roughly R2 billion, so offshore assets did not provide the safety investors may have expected. In South Africa the portfolio held many single-tenant offices leased to government, and slow renewals and late payments from the Department of Public Works hurt cash flow. High yields on government leases can look attractive on paper, but they depend entirely on one tenant's behaviour.

Lessons for private owners too

These points apply well beyond the JSE. A private investor buying an office block or a small industrial park faces the same arithmetic. Conservative gearing gives you time to ride out a vacancy or a weak valuation. A wider spread of tenants means one late payer cannot sink the building. A high initial yield deserves more questions, not fewer, particularly where a building has a single occupier. And a cheap price is not protection in itself, because a weak asset can keep getting cheaper.

Rebosis was not the only casualty of that era. Anderson also points to Delta Property Fund, which had heavy exposure to government tenants and remains about 95% below its August 2016 value. The sector has rebuilt itself since, but the lessons from that period remain relevant for anyone buying or letting offices or weighing up industrial property today.

Source: Property Flash (opinion), 29 October 2026.

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