Private equity real estate firm set for JSE All-Property Index inclusion, expanding investor base

Spear's inclusion in the JSE All-Property Index would broaden its investor universe within the listed property sector and result in improved liquidity and greater market visibility.

The private equity real estate investment business, focusing on owning Western Cape assets with a preference for Cape Town, anticipates its inclusion in the JSE All-Property Index in March next year, subject to confirmation.

“The first half of FY2026 reflects our team’s consistent execution in driving rental cashflows, managing risk, and growing our Western Cape-focused portfolio, says Spear REIT CEO, Quintin Rossi. 

“While trading conditions remain tough, our strong balance sheet, recent acquisitions, and ongoing solar rollout position us to capture further growth and deliver sustainable returns to our shareholders.” 

Spear REIT has issued its pre-close update for the half year ending 31 August 2025 (“HY2026”), highlighting steady performance across its portfolio, continued growth through acquisitions and further investment into sustainability initiatives. 

The company stated that despite a challenging operating environment, results remain firmly on track with guidance currently tracking slightly higher than the midpoint of its market guidance for FY2026, supported by consistent operational execution and disciplined financial management.

It said its highlights were that its distributable Income Per Share (DIPS) Tracker was tracking at 36.77 cents year to July, with distribution per share (DPS) to shareholders at 34.93 cents per share (a 95% payout ratio). 

For operations, it said rent reversions across the combined portfolio were just under flat as tenant retention and rental preservation are prioritised; escalation rates nudged higher to 7.31% (from 7.27%); portfolio occupancy is stable at 95% and expected to improve to 96–97% by period-end; cash collections remain strong at 98.45%.

It said R1.08 billion invested into prime Western Cape properties (137,090m²) at an initial yield of 9.54%, adding quality scale to the portfolio.

With regards to sustainability, it said solar coverage was to grow to 67% of the portfolio, with 11 more systems under construction and recent acquisitions expected to lift this to around 70%.

The company's current portfolio profile was an asset base of R5.58 billion, 487,317m² of gross lettable area, and 39 high-quality Western Cape assets.

Spear said the sector performance for the year to July 2025 underlines the portfolio’s resilience. Retail centres delivered 91.7% occupancy and like-for-like income growth of 12.2%, with strong rental uplifts of 13.7% driven by demand in convenience and destination formats, while larger apparel retailers increased their presence. 

The Commercial portfolio recorded 92.2% occupancy, with solid income growth of 7.0% despite negative rental reversions, cushioned by over 16,000m² of space successfully renewed and re-let. 

Industrial assets continued to show strength with 96.6% occupancy and positive rental reversions, even as income was temporarily impacted by a sustainability-linked vacancy at Mega Park. 

Expansion plans in Blackheath and George are progressing toward final approvals.

It said its key milestones during the period included a R749 million equity raise in June 2025 to support Spear’s asset growth plans and PV solar rollout strategy. During the period, the company said management has successfully reduced borrowing costs and driven strong leasing momentum, which has improved the weighted average lease expiry and escalation metrics of the core portfolio. 

The pending integration of three new acquisitions-Berg River Business Park in Paarl, Consani Industrial Park in Elsies River, and Maynard Mall in Wynberg-is set to add 137,000m² to the portfolio and lift asset valuations to approximately R6.65 billion, the company said. 

Looking ahead, Spear reaffirmed its guidance for the full year, with distributable income per share expected to grow between 4% and 6% compared to FY2025, underpinned by disciplined asset management, selective acquisitions and a resilient Western Cape-focused portfolio.

Spear is a fully internally managed REIT conducting all asset, property, financial and development management in-house.

In the Old Mutual SA Listed Property Index Fund Quarterly Commentary (June 30, 2025), South African assets were said to have performed well over the past three months, finding support from a more constructive global environment.

“The FTSE/JSE All-Share Index rose 10.2% over the quarter, bringing the index’s year-to-date return to 16.7%. The FTSE/JSE SA Listed Property Index rose 9.1%, while the FTSE/JSE All-Bond Index gained 5.9%.” 

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