The second-largest property group in SA, Growthpoint Properties, led the pack in producing solid results and returns to investors in the latest reporting season in October and November.

Premium Properties was the second-best performer.

The eight property counters which announced results last month and the beginning of this month, Growthpoint, Sycom, Fountainhead, Acucap, Premium, Vukile, Octodec and Redefine, reported a 10,4% weighted average growth in distributions.

The counters make up about 37% of the listed property sector by market capitalisation.

The market capitalisation of the listed property sector is R129bn.

Stanlib’s head of property funds, Keillen Ndlovu, said on Friday when one stripped out Redefine’s 17,6% distribution growth,“an anomaly due to the merger”, the distribution growth comes down to 4,5%.

“The distribution of 4.5% from Redefine might not sound exciting but it beats inflation of 3.2%.

"It is also decent given that these companies are coming out of a recession,” Mr Ndlovu said.

The worst performer was Sycom, which recorded no growth in distributions, followed by Octodec with 1.4% growth.

The second-best performer was Premium Properties with 13.1% growth reported.

“The distribution growth differential clearly reflects that listed property is not a homogeneous sector,” Mr Ndlovu said.

Sycom’s zero growth was largely due to the weak demand for office space that resulted in an increase in vacancies and negative rental reversions on lease renewals.

Mr Ndlovu said overall, the companies’ results were generally in line with market expectations, barring disappointments from Redefine failing to meet the guidance and from Sycom recording no growth in distributions.

All the companies reported an increase in vacancies apart from Octodec.

The increase in vacancies was largely due to relatively weaker fundamentals, especially in the office space sector.

Net asset values increased across the board, apart from Fountainhead’s, which was flat year on year. Mr Ndlovu said the retail sector remained his preferred sector.

“We have a neutral view on the industrial sector and are negative on the office market. We are, however, starting to believe that the office sector has approached the bottom.

“We are looking at income to grow by about 6% over the next 12 months, resulting in a forward yield of 8%.

"This is at a premium to the 10-year bond at 8,2%, but it beats cash at 5,8%,” he said.