South Africa is the 8th largest REIT market in the world and, while REITs may be a relatively new arrival in South Africa, our listed property asset class has a rich and respected history dating back to 1969.
As a significant sector in South Africa's economy, listed property has been the leading asset class in South Africa over the past 15 years. It has outperformed bonds by 13.3% per annum and equities by 6.4% per annum.
Thanks to its positive performance, this sector on the JSE has grown tremendously in recent years. And, with the introduction the South African REIT tax dispensation in May 2013, it has gained greater attention from investors both locally and abroad.
With this excellent foundation in place, the challenge now for the listed property class in South Africa is set to grow. The SA REIT Association is positioned to support the sector in achieving this growth.
The SA REIT Association represents the South Africa's listed REIT sector. SA REIT members comprise all listed SA REITs and represent around R230 billion worth of real estate assets. The quality of these SA REITs influence our economy and the quality of people's lives.
As the unified voice of SA REITs, the SA REIT Association plays an important role in communicating about our sector. We also aim to drive an increase flow of funds to the sector. We engage with shareholders, and potential investors, from the retail investor to large pension fund managers, to show the true nature of listed property as an investment, not only the regular income pay-outs, but also the long-term benefits of capital appreciation.
Behind each REIT is its physical property investments and so much more. REITs are quality companies with clearly defined investment strategies, excellent governance, entrepreneurial flair and knowledgeable, experienced and innovative management.
All this makes REITs a unique part of a balanced investment portfolio.
While REITs may be similar to bonds in terms of stability, they are a genuine equity play with income and capital growth. This means, that while REITs have qualities of both, they can't be substituted with either. Over the long run, REITs have a low correlation with bonds and equities.
Listed property is suitable for just about anyone's investment strategy. It provides a highly tax-efficient structure to access to property investment. REITs and property play an important role in a retirement plan and in the savings and investment cycle.
We will continue to lobby regulatory bodies on matters of common interest or concern, and raise awareness of SA REITs with media and investors – local and international, existing and potential.
We'll also continue to strive to stay at the forefront of global best practice. For members, SA REIT Association will continue to offer knowledge-driven opinion and policy, as well as representation on various commercial property working groups.
On this website you will find a growing collection of information and resources about SA REITS. But, should you have any questions, I invite you to contact us using the details provided on the website.
SA REIT Association Chairman
(CEO of Vukile Properties)