What does a 0.7% total return mean for SA REITs?

The rate backdrop is clearly less supportive than it was a few months ago, but the structural case for SA REITs remains intact.

Last month, South African real estate investment trusts (REITs) consolidated, delivering a total return of 0.7% for the month after April’s strong rebound.

The sector edged ahead of equities, with the All-Share Index returning -0.3%, while trailing bonds, with the All-Bond Index up 2.9%.

SA REITs are now positive by 2.0% year to date, ahead of the All-Share Index at 0.8% but behind the All-Bond Index at 2.7%.

This positions the sector broadly in line with the wider market for the year so far.