Did you know? Real Estate Investment Trusts (REITs)

Real Estate Investment Trusts (REITs) allow investors to gain exposure to income-generating property without having to buy physical buildings. In South Africa, REITs own and manage a wide range of assets — from shopping centres and offices to industrial parks, logistics warehouses and specialist properties such as healthcare facilities.

The South African REIT structure was formally introduced in 2013, bringing greater clarity and consistency to the listed property sector. To qualify as a REIT, companies must meet specific regulatory requirements, including distributing most of their taxable earnings to investors. This is why listed property is often associated with income, largely derived from rental streams.

Like all investments, prices of REITs are influenced by economic conditions and stock-specific factors. Interest rates, tenant demand and broader property fundamentals all affect performance. Periods of rising rates can place pressure on valuations, while improving economic growth can support both income and capital values over time.

For investors, REITs can play a useful role in portfolio construction. They provide exposure to real assets, diversification beyond traditional equities and bonds, and access to a sector closely linked to economic activity.