Welcome to the SA REIT website, the official online resource of the SA REIT Association, which represents the South African listed REIT (real estate investment trust) sector, one of the most active and innovative sectors on the JSE.
SA REIT members comprise all listed SA REITs which represent a market capitalisation of around ZAR400bn. The quality of these REITs influence our economy and the quality of people's lives.
Inflation-beating returns over the long term with quality income streams and lower risk are hallmarks of SA REIT performance. Over time, they have outperformed physical property by a long shot. They have outclassed other sectors on the JSE in the last 20 years. Compared to the 16% average return generated by equities over that time, listed property has achieved a 19% average return.
SA REITs are forecast to post total returns in the range of 8% to 10% for 2017.
This demonstrates that REITs are relatively well-placed to weather market instability, making them an excellent hold during periods of volatility.
They invest in expertly assembled property portfolios to match clearly defined investment strategies looked after by skilled and entrepreneurial management teams from quality companies committed to good governance.
Most SA REITs' portfolios are geographically diverse, and a growing number are internationally diversified. SA REITs currently have offshore exposure of about 30% to 40% of their earnings. This provides a buffer against local market uncertainty and serves as a Rand hedge.
With a dominance of hedged debt and low gearing, in addition to increasing levels of offshore exposure, REITs are well-placed to weather SA's current economic and political volatility.
SA REITs have an important role to play in property ownership in South Africa. Owning Sandton City or the V&A Waterfront may be out of reach, but you can own a piece of the pie by investing in REITs. It is a very accessible investment underpinned by physical property assets. Also, REITs are a liquid investment, which you can buy and sell far more quickly than physical properties, and they offer a tax-efficient structure. They also give investors regular income distributions as well as long-term capital appreciation.
Besides these benefits, innovation in the sector has seen its investors multiplying money much faster. The gearing prospects created by the dual share structures that some REITs offer as being one example of this.
The SA REIT Association has done great work so far and will continue to build on this good foundation. As the unified voice of SA REITs, the SA REIT Association plays an important role for the sector. It provides advocacy in areas of common concern, preparing opinion and policy for interacting with stakeholders, representing the industry in meeting challenges within the sector and boosting awareness of REITs as a unique asset class that creates and preserves wealth.
The sector continues to play a key role as a leader in transforming the South Africa economy, which speaks to its sustainability. Also, the association will continue to build positive partnerships to ensure it remains at the forefront of good governance, innovation and international best practice. The SA REIT sector is also recognised as a leader in climate change mitigation through its adoption and support of green building certification.
Another important area of impact for the association is the continuing education of the retail investment market about the benefits of REITs and how they work. We are open to linking with broker bodies, asset managers and institutions to penetrate even deeper into the investment community and get more people to understand why an investment in REITs is a good investment. You are welcome to contact us to learn more on our website www.sareit.com or call 011 783 2201.
We also invite you to connect with us by subscribing to our regular news updates and follow our popular Twitter account @SA_REIT. You can also read our informative biannual SA REIT Journal and attend our biennial conferences with the next one scheduled for 15 March 2018.
SA REIT Association chairman and CEO of Dipula Income Fund