Global real estate investment trusts (REITs) have been quietly regaining momentum throughout 2025. After three years of widespread underperformance and economic pressure, this sector is beginning to stabilise—and even outperform broader equity markets. The recovery, which took root in the third quarter of 2024, is building despite continued global volatility. From tariff scares to uneven inflation data, listed property is showing resilience where many expected further weaknesses.
Yet, curiously, many South African investors aren’t seeing the gains.
It’s not that the gains aren’t happening—they are. But the recent strength of the rand against the US dollar has effectively cloaked this rebound in the eyes of local investors. This creates a false perception: that global REITs are still lagging or stagnant, when in fact, they’ve been quietly recovering.
This phenomenon—where currency moves distort performance perceptions—is especially pronounced in diversified portfolios with international exposure. When investors assess offshore returns in their local currency (ZAR), they’re seeing the combined result of two factors: the asset’s true return in its base currency, and the currency effect from converting those returns back into rands.
And right now, the ZAR is stronger. That means any gains made in USD have been partially or fully offset in rand terms. This doesn’t mean offshore assets aren’t performing; it means their performance is being hidden by the currency filter. This scenario is particularly relevant for investors who hold global REITs via ETFs or offshore platforms. While their USD-denominated holdings may be rising in value, their ZAR statements may suggest minimal growth—or even small losses. This creates a dangerous misalignment between actual performance and perceived performance and can easily lead to flawed investment decisions.
For this reason, it’s essential that South African investors develop the discipline of separating currency noise from real asset movement. Without that distinction, one risks reacting to misleading signals—shifting allocations, selling at the wrong time, or losing confidence in an asset class that is quietly regaining strength.
Numbers don’t lie—but they can mislead if taken out of context. This is especially true in cross-border investing, where local currency performance can tell a very different story from the underlying asset reality. Let’s take a closer look at how global REITs have actually performed.
From 1 January to 31 May 2025, the GPR 250 REIT Index—a widely tracked global benchmark for listed property—outperformed S&P 500 by +5.67% in USD terms*. While these numbers may not seem earth-shattering at first glance, they represent a meaningful shift given the context: the preceding three years were marked by declines and volatility driven by inflation and rising interest rates.
To appreciate the strength of this rebound, it’s worth noting that over the same periods, the S&P 500, often used as a benchmark for broader equity performance, delivered slightly lower returns. This is significant. It suggests that the listed property sector—often viewed as a laggard in rising rate environments—is now holding its own, and in some cases, outperforming.
But now let’s bring the ZAR into the picture.
During the same period, the ZAR appreciated by 4.63%** to 31 May 25. For South African investors, this currency movement effectively cancels out the USD gains delivered by global REITs. What looks like growth in a New York-based index fund may look flat—or even negative—once the ZAR conversion is applied.
A Simple Illustration:
This kind of mathematical sleight of hand can skew perceptions, especially for investors who primarily evaluate their portfolios based on rand-denominated account statements. It’s entirely possible for your offshore holdings to be growing—and for you not to realise it.
This disconnect becomes more apparent when comparing two types of investors:
The result? Investor B might feel tempted to rebalance away from REITs—just as the asset class is beginning to regain favour globally.
This is why currency context is crucial. When you evaluate offshore holdings, you need to know both how the asset is performing in its own right and how exchange rates are affecting your local view. If you focus solely on one, you risk drawing the wrong conclusion—and missing early-cycle gains.
It’s perfectly natural for South African investors to judge their investment outcomes in rands. After all, it’s the currency you use to pay school fees, buy groceries, and plan for retirement. But this instinct, while understandable, can be misleading—particularly when it comes to offshore assets.
The issue arises when investors assume that a flat or negative return in ZAR equates to inferior performance in the underlying asset. In reality, this perception is often driven more by short-term exchange rate fluctuations than by the asset’s actual behaviour.
Here’s how it plays out:
Let’s say you hold a REIT ETF listed on a global exchange. It gains 5% in USD over a few months. At the same time, the rand strengthens by 5% against the dollar. When you check your investment in ZAR, it appears to have made no progress. On paper, it looks like your offshore holding has gone nowhere.
This can create frustration. You’ve made the right call—investing in a sector with solid fundamentals and early signs of recovery—but the gains don’t show up in your local portfolio valuation. Worse, you may begin to question the investment itself, when in fact, the performance has been positive.
Now consider the reverse: the asset loses 2% in USD, but the rand weakens by 5%. Suddenly, your portfolio shows a gain in ZAR. The asset is underperforming, but you’re misled by a currency tailwind. This divergence highlights an essential principle of global investing: currency movements can distort your perception of asset performance—but they don’t change the reality of what the asset is doing.
Why this matters:
In the current context, REITs are not simply treading water—they’re recovering, gradually and meaningfully, in USD terms. The recent rand strength is a temporary lens filter. It doesn't invalidate the sector’s improving fundamentals or its positive trajectory. For long-term investors, this distinction is crucial. Offshore assets are not short-term trades—they are components of a diversified global portfolio designed to preserve and grow wealth across cycles and across geographies. Making decisions based solely on short-term ZAR views risks undermining the very benefits of going offshore in the first place.
To fully appreciate the significance of the current recovery in global REITs, we need to understand what the sector has endured—and why this moment matters. From 2022 through to the end of 2024, global listed property experienced a marked downturn. Rising inflation, aggressive monetary tightening, and recession fears all converged to put pressure on real estate valuations. In particular, the rapid increase in interest rates across developed economies struck at the heart of REIT pricing models.
REITs are, by design, sensitive to interest rates. Their value is heavily influenced by the yield they generate and the cost of financing the properties they hold. When interest rates rise, bond yields become more competitive, debt costs go up, and the present value of future rental income declines.
Between 2022 and 2023, central banks such as the US Federal Reserve and the European Central Bank hiked rates at their fastest pace in decades. The move was necessary to combat inflation, but it came at a steep cost for sectors like real estate. The result was three consecutive years of muted—or negative—returns in global REITs.
During this period, investor sentiment shifted dramatically. Once viewed as a stable, income-generating anchor in diversified portfolios, listed property was now seen as vulnerable and expensive. Fund flows slowed. Allocations were trimmed. Even high-quality REITs with strong balance sheets and prime assets saw their prices fall.
But these conditions, while difficult, also laid the groundwork for opportunity.
Despite the decline in prices, many REITs continued to report healthy fundamentals. Occupancy rates remained stable in key sectors such as logistics, data centres, and residential housing. Rental income held up better than expected in many geographies, particularly where long-term leases or inflation-linked escalations were in place.
Moreover, the capital structures of most large REITs had evolved significantly since the 2008 financial crisis. With better governance, lower leverage, and longer debt maturities locked in at historically low interest rates, these companies were more resilient than their market pricing implied.
In essence, the market had overshot on the downside—pricing in risk without fully accounting for underlying strength.
That’s what makes the 2024–2025 period so important. Inflation has begun to moderate. Rate hikes have paused or slowed in many jurisdictions. And investors are once again looking at yield-bearing assets—like REITs—not with fear, but with curiosity.
The modest yet meaningful gains in the GPR 250 REIT Index during this time aren’t just technical bounces. They represent a re-rating of an undervalued sector. They suggest that investors are beginning to reprice risk, re-examine yield opportunities, and reconsider listed property as a long-term strategic allocation.
For those with experience in cyclical asset classes, this is a familiar pattern:
This is precisely the phase we may be entering now in the global REIT market. But spotting it requires looking beyond the headlines—and beyond the currency filter.
If you’re a South African investor, this is the moment to take a second look at your offshore exposure—especially in listed property.
Too often, portfolio decisions are made by glancing at a local statement, skimming over returns in rand terms, and assuming that if the number hasn’t moved, neither has the asset. But in the case of global REITs, that’s a dangerous assumption. It risks ignoring a sector that is shifting beneath the surface—one that could be poised for a multi-year recovery.
We’ve already discussed how a strengthening rand can mask real gains in global investments. But what’s more dangerous than the distortion itself is what it leads to: missed timing, emotional exits, and poor asset rotation.
Many investors instinctively pull away from underperforming sectors just as they begin to turn. In global listed property, that could mean reducing exposure at the very time seasoned institutional investors are quietly increasing theirs.
What’s more, for South Africans already under-allocated to offshore assets—a common problem due to Regulation 28 limitations and home bias—missing the early innings of a REIT recovery could leave a gap in long-term diversification.
REITs are not just a short-term tactical play. They serve as a structural allocation for those seeking:
In fact, many global REITs own the types of properties that align with the future economy: data centres, logistics hubs, last-mile fulfilment warehouses, residential build-to-rent projects, and medical office buildings. These aren’t speculative plays—they’re essential infrastructure in a digital-first, urbanising world.
For South African investors, this means access to:
And now, with valuations still relatively compressed and sentiment only just beginning to turn, the case becomes even stronger.
Timing the market is rarely successful—but recognising where you are in the cycle is a skill worth developing.
Investors who wait until the recovery is obvious, the headlines are positive, and the ZAR has weakened again may find that the best window has already passed. They may end up re-entering the market only after it has already re-rated—buying back in at higher prices, with lower yield and greater crowding.
This isn’t about taking blind risk. It’s about acknowledging that dislocation creates opportunity. And right now, global REITs represent one of the most dislocated—and potentially rewarding—asset classes available to South African investors who are willing to look past the surface.
In any investment climate—but especially in times of transition—clarity is everything. And clarity begins with understanding not just what you hold in your portfolio, but how it's behaving in context.
If your portfolio includes offshore listed property, now is the time to dig deeper. Strip out the distractions. Remove the distortions. Ask the right questions.
Understanding the answers to these questions isn’t just about being informed. It’s about being strategic.
Investing internationally isn’t about chasing quarterly returns. It’s about protecting and growing your wealth in a world where economic leadership, currency stability, and asset innovation no longer reside in one region. Global REITs offer exposure to tangible, yield-generating assets—properties that serve real people, businesses, and infrastructure needs in thriving cities and sectors. They provide both income and growth potential, often with natural hedges against inflation through rent escalations and scarcity of supply.
For South African investors navigating uncertain local conditions—from constrained GDP growth to political risk and currency volatility—these benefits are not abstract. They’re essential.
But to access them, you need to look through the right lens. Not the ZAR lens. The investment lens. The cycle lens. The long-term lens.
It’s easy to glance at a flat portfolio report and feel discouraged. But that snapshot is not the full story. If you zoom out—beyond currency, beyond short-term volatility—you’ll see a sector that has endured a shakeout, recalibrated its pricing, and begun to turn the corner.
The early signs are there. The gains are happening. The rerating is underway. The only question is: will you be positioned for it, or will you wait for the rand to tell you what’s already happened?
If you're unsure how to interpret the performance of your offshore listed property exposure—or whether your portfolio is optimally aligned for the next phase of the market—speak to someone who specialises in global REITs.
At Reitway Global, we’ve spent decades helping South African investors navigate the unique opportunities and challenges of investing beyond borders. We understand the nuance of currency. The rhythm of the REIT cycle. And the discipline required to turn long-term trends into lasting value.
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Book a conversation with our team to review your offshore allocation.
* Global Property Research & Refinitiv **XE.Com
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