Different strategies, similar yield

Spear Reit and Dipula Properties show how contrasting local property tactics can still deliver above-inflation returns, whereas Woolworths and Mr Price face tougher trading conditions and online shopping pressures

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Last week, we saw updates from two local property funds that have completely different strategies: Spear Reit and Dipula Properties. We also had numbers come in from Woolworths and Mr Price.

From tourists to taxi routes

There are many property funds on the JSE that are primarily or exclusively exposed to South African properties. Although retail properties tend to feature prominently here, you'll also find funds that focus on other sectors, or on regions rather than types of properties.

Spear Reit is the best example of a regional focus. The fund has always positioned itself as a Western Cape specialist.

Instead of fighting over Sea Point apartments, Spear Reit invests mainly in industrial assets. It will selectively acquire retail assets as well. This is important capital discipline, as it means that it is enjoying the overall upswing in the province, but without getting involved in the types of properties that have bidding wars that inspire TikTok videos complaining about digital nomads.

With distributable income per share growth of between 5% and 6% for the year ended December 2025, Spear has generated above-inflation earnings growth. Combined with the capital gains in the region over time, that ticks the box for investors.

Another example of a local property fund that has tried to carve out a niche is Dipula Properties. It isn't as razor-focused as Spear, but 70% of its portfolio is attributed to retail properties near townships, on busy commuter routes or in rural areas.