Why South African Real Estate Investment Trusts are leading the global market

South African Real Estate Investment Trusts (REITs) outperform global peers with a 46.2% year-to-date surge. The local listed property is significantly outpacing the US, UK and Australia in a global landscape marked by economic shifts and varying recovery speeds. 

The sector has not just recovered, it has surged to the front of the pack. 

A REIT is a company that owns, operates, or finances income-producing real estate. It allows everyday investors to buy shares and earn a portion of the property income (like rent) without directly buying or managing properties themselves.

Strongest total returns in global real estate

According to the latest Global Property Research (GPR) Market Update for November 2025, South African REITs are currently delivering some of the strongest total returns in the global real estate universe, significantly outpacing major developed markets including the United States, the United Kingdom and Australia.

Data released by GPR reveals that the South African listed property sector delivered a remarkable 9.7% total return in November 2025 alone, pushing its year-to-date (YTD) growth to an imposing 46.2%.

Placing this in a global context, the Global REIT Index is said to be up 12.0% YTD. While respectable, it trails the South African performance by a wide margin.

The United States REIT market sits at 9.2% YTD, the United Kingdom at 10.3% and Australia at 22.9%. Even Japan, a strong performer in the Asian region, trails South Africa with a 27.4% YTD return.

“The numbers we are seeing now are the dividends of discipline,” remarks Joanne Solomon, CEO of the SA REIT Association.

“This performance reflects five years of rigorous execution by management teams across the sector. When faced with the headwinds of the pandemic and economic uncertainty, our sector didn’t just wait for the tide to turn.

"Management teams actively strengthened balance sheets, stabilised earnings and ruthlessly simplified portfolios to focus on core assets. What we are seeing now is the market pricing in that operational excellence.”

The sector’s exceptional performance reflects well-earned operational gains, such as deleveraged balance sheets, streamlined portfolios, and a focus on core assets, says Justin Davidson, portfolio manager at Anchor.

He says after several years of consolidation, the market is now rewarding fundamentals. “South African REITs are offering global investors high yields with lower volatility than many global peers.”

Implications for the broader economy

This rally is buoyed by the same tailwinds that have elevated the broader South African investment case, including the FATF greylist removal and an enhanced credit outlook, says the investment company.

“REITs are serving as a bellwether for renewed capital flows and investor confidence, a trend reinforced by successful capital raises from Equites, Hyprop and Stor-age last week.” 

Not a short-term spike

While the short-term numbers are headline-grabbing, the underlying data is said to suggest this is a structural re-rating of the sector rather than a momentary spike. The GPR data shows South Africa delivering a 44.7% return over one year, confirming a sustained upward cycle.

Most telling, however, are the long-term horizons. On a three-year and five-year annualised basis, South African REITs have returned 20.6% and 23.6% respectively. In contrast, the global average over five years stands at just 7.3%, with the UK at -0.3% and Europe at 1.9%.

No excess risk, but returns are high

The association says a critical insight from the GPR report is the relationship between return and volatility. In investment terms, high returns are often accompanied by high volatility (risk). However, South Africa’s volatility rating over the last 36 months stands at 0.20, a figure entirely consistent with global norms.

For comparison, the volatility for the European composite is 0.18, and France specifically is 0.20.

“Investors are currently getting alpha returns with beta volatility, which means excellent growth coupled with average risk,” Solomon explains.

“We are producing some of the highest returns in the global REIT universe, yet our risk metrics are in line with developed markets such as France and Belgium. It signals a mature, resilient market that is being driven by fundamentals rather than speculation.”

Macro tailwind

The sector’s resurgence is said to be coinciding with a rapidly improving macroeconomic narrative for South Africa. The country was recently removed from the FATF grey list, a credit outlook upgrade from S&P and the momentum of a successful G20 despite a United States boycott, the conditions are aligning for increased capital flows.

South Africa’s property sector performance reflects two main fundamentals, says Dr Farai Nyika, an Academic Programme Leader at the Management College of Southern Africa's (MANCOSA) School of Public Administration.  

He says that as an emerging market, South Africa offers an attractive alternative investment destination for diversified risk strategies. UK interest rates are roughly half of those in South Africa, yet the African country has recorded stronger growth in property returns.

“South Africa also offers a unique lifestyle advantage that the UK and the US struggle to match, particularly in coastal regions, where very expensive prime properties are purchased by foreign buyers. The rand’s weakness enables these buyers to invest far more cheaply in South Africa than in the UK or the US.” 

The academic says South Africa’s property growth trends should also be considered alongside overall sentiment about the country’s future prospects. He says while the country faced negative publicity earlier in the year, it is evident that some structural reforms-especially regarding electricity stability-are beginning to show results.

“In addition, the property market remains underdeveloped, as many middle-class households are still renters awaiting the opportunity to buy their first homes.”

On the other hand,  Nyika says the UK has very limited urban land available for new property development to meet its growing population’s needs, an issue South Africa does not face. “Investors are aware of these trends, and we argue that South Africa’s property sector has the potential for further expansion.” 

It is important to caution, however, that strong property growth does not necessarily correlate with overall economic growth, cautions Nyika. “The country faces significant structural challenges that cannot be resolved through a thriving property market alone.” 

The SA REIT Association says South Africa’s invitation to join the Global Real Estate Alliance this year, a body representing 28 countries, has further cemented the sector’s relevance on the international stage.

Going forward.

As the sector pivots from a narrative of recovery to one of growth, the industry’s focus turns to the future.

The SA REIT Association will be unpacking these global trends and the future trajectory of the sector at its highly anticipated biannual conference on 12 February 2026 in Johannesburg.

Registration for the SA REIT Conference, sponsored by Nedbank Corporate and Investment Banking’s Property Finance division, closes strictly on December 12, 2025. 

Independent Media Property