The sector gained 3.3% between Monday and Thursday, but a number of the larger market capitalisation companies were sold off aggressively on Friday. Capital Property Fund (+4.3%), Growthpoint Properties (+3.5%) and Hyprop Investments (+2.1%) led the market higher, while Investec Property Fund (-6.5%) and Premium Properties (-4.7%) declined substantially over the week.

Investec Property Fund's rights offer opened on 15 October 2012 and closes on 2 November this year. The company is looking to raise R1.56 billion before expenses and the proceeds will be used to partially fund acquisitions of approximately R1.9 billion, including three properties from Investec Limited valued at R839 million.

Annuity Properties announced the financial effects of its latest acquisitions and also announced a specific issue of units for cash as part of the funding of the property acquisitions.

Vividend Income Fund reported distributions of 50.5c per unit for the year ended 31 August 2012 and reiterated management's guidance for 2013 of 52.38c, placing the company on a clean forward yield of 9.7%. This is significantly higher than the current sector average of around 7.1%, suggesting that Vividend is attractively priced on a relative basis at the current price of 565c (which includes a 26c distribution).

Vunani Property Fund announced that Vunani Limited had sold a total of 9.1 million Vunani Property Fund units by way of a private placement conducted by Investec Bank. Vunani Limited is expected to dispose of its remaining units in due course to settle debt obligations.

With little sector-specific news expected until Fountainhead Property Trust reports final results at the end of October, South Africa's listed property sector will in all likelihood take its cue from the bond market and the Rand.

In the longer term, the outlook for the sector remains positive given an expected acceleration in distribution growth rates on the back of lower borrowing costs, declining vacancy rates and income-enhancing acquisitions and redevelopment opportunities.

Source: Grindrod Asset Management