Listed property plays a useful role in portfolio construction. It is a hybrid of bonds and equity, providing predictable yields but also the opportunity, at some risk, of capital gains.Historic dividends are certainly more spread out than in the bond market. Some real estate investment trusts (Reits) are not expected to pay dividends, but investors might make good money if they are repriced. These include Accelerate, Delta and MAS.But of the Reits that have paid dividends yields vary from 5.6% for Attacq right up to 9.9% for Burstone, the former Investec Property Fund.I used to cover the sector closely. It went through a bubble in the early 2000s in which it was common for Reits to trade at a premium to their net asset value. UK Reits such as Hammerson, owner of the iconic Bull Ring in Birmingham, listed on the JSE even though the management company had no historic links with South Africa.I caught up with Keillen Ndlovu to get an update this week. He used to run the Stanlib Property Income Fund with the late Mariette Warner and Evan Jankelowitz, one of the founders of the specialist listed property asset manager Sesfikile. Sadly, Stanlib no longer runs this fund on a fundamental research basis. To save money it now does so on the same black box process as its domestic equities. Not quite an index fund, but inevitably not much more than an enhanced index fund.Property has had a good bounce back from Covid, with total returns of 10.7% in 2023, 29.8% in 2024 and 30.6% in 2025. In all three years it has been ahead of bonds and equities — with the exception of last year, when local equity had a stellar 42.4% total return.Over five years local property has proved to be a far better investment than global property, according to Ndlovu’s data, with a 16.2% annualised return, compared with 6.2% for global property in rands. Over 10 years, which includes the Covid years, listed property has been a dismal investment anywhere, with an annualised 2.9% locally and 6.5% internationally.There is now demand to invest in the sector. This to some extent reflects the limited opportunities in the corporate bond market and other fixed income sectors outside the vanilla government bond sector.Even in the uncertainty of 2026, with the Iran war and a spike in global inflation, Spear and Fairvest have each been raising about R1bn of new equity capital.Last year R11.4bn was raised — Vukile stood out, raising a substantial R2.65bn. In 2024 R13bn was raised, a 10th of this from Nepi Rockcastle, which is listed on the JSE but which has all its property portfolio in central and eastern Europe.There is also demand from fixed income managers looking for something a bit different from government bonds. Ndlovu said bond issuances at auction by the Reits have been oversubscribed, sometimes by a factor of four.In 2026 so far, Vukile, Redefine, Fortress, Attacq and Resilient have taken part in the auctions. The three year bonds give a 90-98 basis points premium over three month cash rates (Jibar), the five year 107-118 bps premium, and the seven year bonds 145-165 bps, very welcome to income sensitive clients. They seem to have a lot more confidence in the property sector than they did three years ago.Much of the flow into listed property comes through the real estate unit trusts. Financial advisers are the main gatekeepers into these funds. There was a huge R9.3bn net flow into the sector in 2017 which has not been repeated.From 2019 flows had been negative or flat. It’s not difficult to see why. The office sector was shrinking as companies reduced the size of office space, making many of their staff work from home, and when in the office they often no longer have fixed desks and are obliged to hot desk.In retail there is less footfall. Grocery delivery used to be highly elitist, dominated by family grocers such as Thrupps in Johannesburg’s northern suburbs. However, increasingly deliveries provide a substantial portion of sales of the national chains, notably through the phenomenal growth of Checkers Sixty60.Flows turned in 2025 though, and with R2.3bn net sales of real estate unit trusts, equilibrium has come back into the market. However, the number of stocks in the sector continues to decline, from 52 in 2020 to 38 in March this year.The new listings have been specialised UK shares, attracted by the South African investor’s appetite for Reits. They have included specialist health Reits Assura plc and Primary Health Properties (which have since merged), and Supermarket Reit. Ndlovu said these shares have limited liquidity, so their impact has not been as significant as some had hoped.Many names have disappeared because of consolidation or changes in corporate strategy. Investec Australia was delisted as the bank closed its operations in Sydney.Liberty 2 Degrees has also been taken off the market. Its assets, such as Sandton City and Eastgate, now belong to Liberty Policyholders and Liberty (in effect Standard Bank Group) shareholders.Ndlovu is optimistic that some specialist property shares will join the boards over the next few years. He expects the first through the gates to be multifamily residential (blocks of flats) over the next 18 months to two years. Next will be healthcare funds before end-2028.Student accommodation has been the province of unlisted impact funds, run by specialists such as Futuregrowth. Ndlovu expects some will arrive in about 2029-32.The bad news is that South Africa will miss out on the hottest property sector as he doesn’t see any data centre funds coming onto the JSE. Global data centre funds have provided a 38% return year to date.• Cranston, a financial journalist, is author of ‘The Mavericks’, a new book about South African fund management.