JSE investors can follow the same consumer story via landlords (Reits) or retailers. Updates from Spear and Dipula show sharply different property strategies delivering similar returns. Woolworths’ local resilience is overshadowed by Australia, while Mr Price leans on standout acquisitions to justify NKD.
The retail and property sectors on the JSE are jam-packed with companies competing for the attention (and capital) of the investment community. This represents an interesting value chain, as the retailers are the customers of the landlords. The other way to vertically integrate is based on products rather than space, which means seeking out the FMCG names (such as Tiger Brands, Premier or Libstar) instead of the real estate investment trusts (Reits).
The ultimate exposure is the same: the South African consumer. But the routes to access that economic profit pool vary considerably, with different risk-reward dynamics and moats. In the past week, we saw updates from two local property funds that have completely different strategies: Spear Reit and Dipula Properties.
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We also had numbers come in from Woolworths and Mr Price. This gives us a great way to see these strategies playing out. There are many property funds on the JSE that are primarily or exclusively exposed to South African properties.
Although retail properties tend to feature prominently here (remember when it felt like shopping centres were springing up everywhere?), you’ll also find funds that focus on other sectors, or on regions rather than types of properties. Spear Reit is the best example of a regional focus. The fund has always positioned itself as a Western Cape specialist.
It obviously doesn’t hurt to be focused on the investment gem of South Africa, with plenty of capital continuing to pour into the province. Instead of fighting over Sea Point apartments, Spear Reit invests mainly in industrial assets. It will selectively acquire retail assets as well.
This is important capital discipline, as it means that the Reit is enjoying the overall upswing in the province, but without getting involved in the types of properties that have bidding wars that inspire TikTok videos complaining about digital nomads. For example, Spear’s recent retail acquisition is Maynard Mall, which isn’t on anyone’s list of top retail destinations in Cape Town. Therein lies the opportunity for some active property management expertise to create value.
With distributable income per share growth of between 5% and 6% for the year ended December 2025, Spear has generated above-inflation earnings growth. Combined with the capital gains in the region over time, that ticks the box for investors. Another example of a local property fund that has tried to carve out a niche is Dipula Properties.
It isn’t as razor-focused as Spear, but 70% of its portfolio is attributed to retail properties near townships, on busy commuter routes or in rural areas. This means that Dipula is participating in one of the more interesting trends in South African retail: the adoption of formal retail by consumers who are moving up the LSM curve. In simple terms, this means shopping at a Boxer or Shoprite instead of the local spaza store.
Transport is a huge cost for low-income South Africans, so proximity to these shoppers is key. If you know anything about the success of those grocery names, then you’ll know that this is a lucrative shopper category that shouldn’t be ignored.
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