Capital Property Fund managed to reduce its vacancies significantly to 10% for the six months to June 30 compared with 14% for the corresponding period last year.

Fund manager Charles Ryan said at the beginning of last year the vacancies were about 15% to 16%.

Capital's property portfolio is a rough split between office and industrial properties.

In view of the oversupply of offices nationally the vacancy reduction is good news for the fund.

Also included in the 10% figure are "created vacancies" because of the redevelopment of Capital's Southway Mall in Durban at a cost of R14m. The redevelopment is due for completion by the end of the year.

On Friday Capital reported a net property income of R33,6m against R26,03m in the same period last year.

Although this was a substantial increase, Ryan said that the fund had also issued more units to purchase properties.

The fund also reported headline earnings of 14,78c, an increase on the 13,90c for the corresponding period last year.

The net income available for distribution amounted to R27,2m or 14,75c for each unit.

The net income available for the corresponding period last year was R20,5m or 14,01c for each unit.

The fund reported that sale agreements were being negotiated on another nine properties, with the transfer of eight expected this year.

Ryan said they also wanted a balanced fund with more of a retail exposure.

The fund, which has a market capitalisation of about R380m, reported that various options to grow the portfolio significantly were being considered.

The fund is in a good position to do this because it has no borrowings.

Ryan said that the fund's ultimate intention was to increase its market capitalisation to more than a billion rand.

He said the bigger the fund, the more liquidity it offered and the better rated it was by the market.