South Africa’s largest real estate investment trusts (REITs) have experienced a significant decline in value, with the big five collectively losing over R100 billion since September 2018.
- The S&P SA Composite Property Capped Index, which serves as a benchmark for funds and ETFs in the sector, has dropped by more than a third between August 2018 and August 2023.
- Excluding dual-listed counters, the five largest locally-domiciled REITs, namely Growthpoint, Redefine, Resilient, Vukile, and Hyprop, have seen an average loss of 51% in their market capitalization, equivalent to over R100 billion.
- Fortress, a converted REIT, lost its REIT status in February 2023 and is excluded from the analysis.
- Hammerson plc and Shaftesbury Capital, which merged with Capital & Counties, as well as other companies like Delta Property Fund Ltd., are also excluded from the analysis.
- Among the included REITs, Hammerson has experienced the most significant decline, with its shares plummeting by over 85%.
- The listed property sector in South Africa has struggled to recover from the shock of the COVID-19 pandemic. Many property fund managers, including REITs, have provided cautious or negative earnings guidance, and distributions have remained below historical levels.