These plans could signal the dawn of a new era for property funds, which have been close to disappearing for some time. Its sister company, Cenprop, has taken the voluntary liquidation route.

Capital fund manager Charles Ryan said at the weekend the group was putting in place a loan facility to grow its property portfolio through acquisitions. Property unit trusts have been barred from gearing their portfolios, but the Collective Investment Schemes Bill, which comes into effect this year, will give them a right to gear up to 30%.

The lack of the right to gear has minimised the growth potential of many property unit trusts and explained why the property unit trust sector of the JSE Securities Exchange SA has been overtaken by the property loan stock sector in net asset value in the past few years.

Capital maintains a property portfolio valued at about R300m. The portfolio has dwindled as the group disposed of what it called nonstrategic properties during the course of last year. Ryan said that the group had taken a strategic decision to dispose of certain properties with an eye to lessening its industrial exposure.

The group was also working on some acquisitions.

These include the proposed acquisition of two properties, 2 Long Street and SouthwayMall from sister company Cenprop for R59m and R9m respectively.

Cenprop put all its assets on sale after it decided to wind up its operations.

Subject to shareholders' approval of the deal, the acquisition is to be settled through the issue of 37,7-million Capital units at 180c a unit.

He said the past few months had been difficult for the group because of high vacancies.

The group's vacancies had been reduced from about 14,5% in December last year to about 9,5%. Vacancies were reflected in the group's earnings for the six months ended June.

In this period, the group reported a decline in earnings a share to 14c from 16,3c.

Capital's unit price closed at 185c on Friday.