This was a dream born when institutional investors decided to reduce fixed-property exposure in pursuit of more liquid instruments.

The trend was understood to be opening a gap for private investors and entrepreneurs to come in as property owners, property managers, property asset managers and facilities managers. However, the gap left by institutions is being filled largely by banks and less by small and private investors.

"It is a case of financial institutions replacing insurance groups," says JHI Real Estate corporate services director Jay Junkoon. He says the private entrepreneur will find it more difficult to enter and compete in the property services market because of the interest taken by banks backed by financial muscle.

Evidence is in the listed property sector of the JSE Securities Exchange SA where a large chunk of property portfolios released by institutions has landed.

Property services divisions within certain banks have taken remarkable interest in the activities of the listed property sector and claim a significant chunk of, the value created through this sector. As well as financing the property listing, banks are becoming fund promoters, property managers and asset managers.

Investec Property Group has produced two listed property funds called Growthpoint Properties and Metboard Properties. Combined, the two funds have property assets worth about R3-billion. Growthpoint is in takeover talks with Primegro Properties which, if successful, will boost Growthpoint's assets by R2,4-billionn.

Investec Property Group provides property and asset management to its funds.

RMB Properties is planning to reverse list a portfolio of properties from insurance group Momentum into Bonatla Properties.

RMB Properties has aggressively moved into the property services sector.

Nedcor Investment Bank (NIB) brought to the market a R636-million fund called Resilient Property Income Fund. However, NIB is outsourcing its property services roles.

CorpCapital Bank has established close ties with Redefine Income Fund, ApexHi Properties and Hyprop.

Observers say that this extraordinary interest taken by banks in property services business is stifling the emergence of private entrepreneurs in the commercial property field.

One property asset manager however, says the involvement of financial institutions in the listing of property is making it easy for the private investor and ordinary person to own property.

Angelique de Rauville, the head asset management in listed property equity specialist Provest, concurs. Provest has recently become an Investec Property Group's subsidiary.

De Rauville says listed property has come to simplify commercial property ownership and made it accessible to all.

An investor seeking exposure in commercial property no longer needs large amounts of money to realise his goal, says De Rauville. Listed property allows the investor to acquire units in listed property funds thereby gaining access to income stream from premium commercial properties carried in a listed portfolio.

She says liquidity of the funds have improved in past few years. The increase of pension and provident funds taxation from 17% to 25% in the past few years drove these institutions away from listed property.

Business Day