CEO UPDATE

The green shoots of optimism break through

As we approach the close of another tough year for commercial real estate, it finally feels like the cycle is turning. After a prolonged downturn, the indicators are, at last, pointing in the right direction.

Interest rates in the U.S. dropped again yesterday, and we anticipate further easing as the new administration “puts its hand on the scale” in the new year. Because interest rates and property values move together, this shift has already opened the door for us to sell three buildings to buyers eager to get ahead of the curve.

We also wrapped up 2025 with the launch of our Accretiv Hybrid Fund 2 (Accretiv Hybrid Portfolio Limited internationally) and the acquisition of our first small-bay industrial building. Although we narrowly missed closing on our second building for the fund before year-end, this marks our first set of acquisitions since January 2024, when we added 4700 West Palm Beach, and we are excited about the opportunities emerging in the industrial sector.

On the medical side, after closing the Accretiv Medical Portfolio to new investments, we repurchased more than 2 million shares, reducing the total issued share capital. The sale of three of our oldest buildings also enabled us to return just over $2.1 million to members outside the portfolio. Taking dividends and other distributions into account, we have returned more than $8.1 million or R137.7 million to investors during 2025.

Our strategy to be more hands-on has paid off. The creation of our Property Management division has exceeded expectations, strengthening tenant relationships, reducing arrears, and stabilising rent rolls across the board.

Of course, challenges remain. Debt maturities are a universal issue across the real estate sector, and we are not immune, but with borrowing costs declining, the risks associated with refinancing are easing. As cap rates recalibrate, new acquisition opportunities will emerge, and exit opportunities will become increasingly achievable.

To all of you around the world who form part of our ecosystem and continue to trust and support us: thank you. You remain the foundation of everything we do.

On behalf of the entire team, I wish you and your loved ones a joyful holiday season and a well-deserved year-end break. Here’s to a bright, exciting, and successful 2026 ahead.

Warm regards,
Martin Freeman