THE excellent returns seen in the listed sector of late, combined with the opportunity to invest in property without the hassle factor of direct building ownership, have boosted investor interest in property unit trusts and loan stocks.

 Brian Azizollahoff, CE of Redefine Income Fund, says the bottom line is to acquire good properties with good tenants in good locations. This means that the fund is able to seize market opportunities across sectors within its existing investment framework.

 The first step is for investors to see the appeal of listed property, he says.

 "It offers the investor greater liquidity and tradability than direct property and the opportunity to be exposed to a range of property sectors and nodes.

 "At the same time, investors are not burdened with property management, which has traditionally been one of the major disadvantages of property investments."

 Azizollahoff says many large and private property owners are looking to swap direct property for the listed sector. He cites the example of large institutional property holders who have disposed of properties for units, with two key advantages.

 "Firstly, the listed units are more tradable and are easily converted into cash. Secondly, the asset-management divisions of certain of these companies will buy the units from their property division, generally at a discount, which facilitates the sale."

 The second step is to identify a fund with a clear investment strategy and one that can respond to shifts in the market, says Azizollahoff.

 He says that the industrial sector is looking interesting at the moment, thanks to a competitive rand exchange rate during 2002.

 There is usually a lag between the start of a revival and the demand for new premises, and this has driven the take-up of industrial premises in recent months, he says.

 Jeffrey Sher, fund manager of Metboard, says: "Since the middle of last year we've seen a great take-up in the demand for industrial space and we have reduced our vacancies by about 67000m² of space."

 Metboard is a focused industrial fund with 160 properties countrywide, the bulk in the greater Gauteng area, with the predominant focus on the warehousing or factory markets.

 Through an aggressive letting strategy undertaken in conjunction with various strategic industrial brokers, Sher says the company has not only offered good incentives by way of rental, but also through allowances to tenants to enable them to install themselves in their premises.

 "The industrial market is active. There is good demand countrywide, not only in Gauteng."

 He says the company has low vacancies in Durban and Cape Town, with total vacancies running at only 5%.

 "We don't see any significant change for the rest of 2003. Demand is set to continue. And hopefully, a 1% or 2% cut in the interest rate will be beneficial to the industrial market."