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REITs in South Africa – Should You Invest?

We all dream of investing in real estate, becoming a property investor. Unfortunately, for majority of us buying an investment property is out of reach. We, therefore, need to look for other ways of investing in property. While Easy Properties may be an option, another great option is REITs.

What is a REIT?

Real Estate Investment Trusts, also known as REITs, offer investors access to real estate properties via a JSE-listed instrument. These funds offer easy access and diversification in the property market through REITs managed by property experts.

Features

  • The REIT company must pay out 75% of their available distributions to investors. This keeps constant dividends when the company is making profits.
  • REITs South Africa usually earn their income through property leases which means they have a stable income stream that is adjusted upwards each year to keep up with inflation.
  • They can earn their income by leasing long-term commercial properties, which usually means they have a stable income stream that is adjusted upwards each year to keep up with inflation.
  • A committee is required to monitor risks and decisions of the company, helping to keep investors informed.
  • Investors could be exposed to some risk due to the unpredictable economic and social conditions that can negatively or positively impact rental income as well as the price of REITs.
  • The property company will be more efficient in tax planning because the tax is paid in your brokerage account and not by the investor.

Top Performing REITs in South Africa

The SA REIT Association is the representative of SA’s listed REIT industry. Its members include all 30 listed SA REITs, with a combined market capitalization of around R300bn. These active businesses have a positive impact on the economy and quality of life by investing in SA’s built environment and their property assets.

Equites Property Fund was the top-performing listed property fund and fourth overall in Top 100 Companies. It achieved a CAGR 22.6%. Fortress A (13.5%) & B (2.6%), Investec Property Fund (7.3%), Emira Property Fund (6.2%), Growthpoint Properties (6.0%), Redefine Properties (4.4%), Resilient REIT (4.4%), Hyprop Investments (0.6%) and Hospitality Property Fund (1.5%).

How to Invest in REITs in South Africa?

There are a number of ways to invest in Reals Estate Investment Trusts in 2021. From specific REITs funds to Listed REITs. One of the easiest and cheapest ways to invest in REITs is through Easy Equities. Easy Equities offers approximately 34 different REITs for you to choose from and invest in. This allows you as an investor to explore and diversify adequately depending on your needs.

Furthermore, Easy Equities has a low-cost profile with a cost of 64c per R100 invested! This means investing no longer has to be expensive.

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REITs in South Africa - Should You Invest?
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REITs in South Africa - Should You Invest?
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Real Estate Investment Trusts in South Africa can seem confusing. So lets break it down and understand them better.
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Once A Week Blog
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