Distributable earnings per combined linked unit grew 14.5% to 174.8c. The A-linked unit distribution of 141.35c rose 5%, in line with the forecast, and the distribution of the B-linked unit grew 85% to 33.45c, 2.6% ahead of the forecast.

"We are pleased with the results, especially the trading levels that we achieved up to the end of March 2014. "Subsequently, the effects of the public holidays and national elections were felt across the country, and while business travel is slowly picking up in the major centres, public-sector travel continues to lag," CEO Andrew Rogers said.

Net asset value per linked unit of R11.40 was achieved, up 4.1% from last year. The overall occupancy rate was 61.4%, up 2.2%, against a 14% rise in average room rates to R1,162 and revenue per available room growth of 16.5%. Hospitality said the industry's average year-on-year rise in occupancy was 1.4% to 62.3% and average room rates rose 9.6% to R1,001, with revenue per available room up 11%.

Properties in Cape Town and Sandton were the top performers. In particular, The West in Cape Town, the Radisson Blu Waterfront and the Radisson Blu Gautrain Hotel were strongly profitable, said Mr Rogers. "Our well-located properties in Sandton and Cape Town underpinned the fund's rental income growth of 19.6% to R426.2m," he said. Meago Asset Managers director Thabo Ramushu said: "The results were marginally ahead of guidance, but it must be noted that the performance was coming off a low base.

"The fund's occupancy and average room rates were ahead of the industry even though the hospitality industry as a whole has recovered since 2011." He was concerned about near-term headwinds "like the loss of income from conversion of fixed-income lease to variable lease for the Birchwood hotel and the renegotiation of the Champagne Sport Resorts lease in 2016, which will result in further significant negative rental reversions".