Local REITs achieve 8.1% surge in February, breaking R350bn market capitalisation barrier

The real estate investment trust sector has seen substantial capital inflows, successfully raising over R11.4 billion in fresh capital in 2025. South African Real Estate Investment Trusts (REITs) delivered another standout month in February 2026, surging by 8.1%, breaking the sector’s total market capitalisation past the R350 billion mark. The impressive performance decisively outpaced local equities (7.0%) and bonds (1.7%), underscoring a structural re-rating driven by improving fundamentals, accelerating distribution growth and a massive shift in institutional investor sentiment.

According to the latest SA REIT Association Chart Book for February 2026, compiled by Ian Anderson, portfolio manager at Merchant West Investments, the sector has now returned 9.1% year-to-date. This builds on the exceptional momentum of the past two years, with top performers delivering total returns of approximately 50% over the trailing 12 months. “The total market capitalisation of publicly traded SA REITs surpassing R350 billion is a significant milestone,” notes Anderson.

“It reflects the sector’s sustained recovery and landlord pricing power in a falling interest rate environment, supported by distribution growth for the sector standing at 8.06% on a rolling 12-month basis”. This market recovery is matched by a dramatic pivot in institutional capital allocation. Speaking at the recent sold-out SA REIT Conference, independent property analyst Keillen Ndlovu highlighted a massive shift in asset manager sentiment, quantifying the return of real money to the sector.

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“Two years ago, 48% of fund managers were underweight on the SA real estate investment trust sector,” Ndlovu noted during his presentation. “Today, that picture has changed completely, with only 12% underweight and 40% now overweight or neutral-to-overweight.” This renewed confidence is said to be visible in the physical economy. “If you drive around Sandton and Rosebank today, the cranes are back.

I counted 12 cranes over the weekend,” Ndlovu added during the conference held on 12 February 2026. “The physical economy is matching the real estate investment trust sector’s recovery.”

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