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Abstract
The South Africa real estate market is an important African real estate market, having attracted considerable investor interest in recent years; particularly from domestic real estate investors. This paper highlights the risk-adjusted performance and portfolio diversification benefits of commercial real estate in South Africa in a mixed-asset portfolio over the 1996–2016 period, as well as in a post-GFC context. The risk- adjusted returns analysis demonstrates a clear distinction of the performance of commercial real estate in South Africa, with both direct and listed real estate providing competitive risk-adjusted performance compared to stocks and bonds. Importantly, both direct and listed real estate contributed significantly in mixed-asset portfolios due to improved portfolio diversification benefits since the GFC. The strategic real estate investment implications are also highlighted.