If successful, the proposed transaction would see Momentum Property Investments taking new units in A-Prop in exchange for the properties. The size of the fund's property portfolio would also be boosted by more than R1bn.

Momentum Property Investments is the vehicle which owns the bulk of insurance group Momentum's properties.

Corovest, which was appointed as AProp's fund managers from June 1 last year, also announced that it would be joined by RMB Properties which is responsible for managing the property assets of Momentum in a joint venture to co-manage the enlarged fund.

"On completion of the transaction the new-look A-Prop, which will bear little resemblance to the original fund, will be positioned to expand both its asset base and investor spread," said Michael Aitken, a director of Corovest.

Aitken said there was an anticipated improvement in the portfolio's value .

He said the Momentum transaction would reduce A-Prop's loan to value of assets to just less than 60%. Aitken said, however, that the medium-term target was to reduce borrowings to 50%.

"We also believe there are opportunities to improve the existing properties in the fund and some of the Momentum properties that are going in, which will allow ourselves and Corovest to grow the income of the fund overtime,"
said RMB Properties CEO Warren Schultze .

Andisa Securities property analyst Len van Niekerk said that Corovest had taken A-Prop by the "scruff of the neck" and was "managing it properly".

He said it would "definitely boost the confidence" of investors in the fund and "shows the fund is moving forward".