Although a number of the smaller listed property companies continued to register price gains, industry heavyweights like Growthpoint (-0.9%), Fountainhead (-1.1%), Sycom (-1.8%) and Resilient (-2.1%) all recorded price declines. The Moody's downgrade of South Africa's government debt and an escalation in labour unrest sent bond yields higher, placing pressure on the listed property sector.

The terms of Redefine's offer for Fountainhead were disclosed last week. Investors are set to receive 62.5 Redefine units and 3 Hyprop units for every 100 Fountainhead units they own. The offer is in line with the current Fountainhead unit price and the offer is likely to succeed on the basis that both Redefine and Fountainhead have similar share registers.

Late on 5 October 2012, New Europe Property Investments announced the company was looking to raise a further €50 million by way of a rights issue on all three of its share registers (SA, UK and Romania). The proceeds will be used to fund potential acquisitions or pay down debt if those acquisitions don't materialise.

Looking ahead, the listed property sector will no doubt take its lead from the bond market, which is expected to come under further pressure as the Rand continues to lose significant ground and investor sentiment towards South Africa deteriorates further. The substantially weaker Rand may also negate any chances of further interest rate cuts this year or next.

Despite these short-term headwinds, the listed property sector remains poised to deliver inflation-beating returns over the next three to five years, on the back of a high initial income yield and above-inflation distribution growth.