But major players all warn that debt securitisation initiatives are expensive and that only the big listed property companies will be able to consider them.

The market may well also see other cheaper alternative forms of funding coming to the fore, such as corporate bonds.

Absa and listed property loan stock heavyweights iFour and Pangbourne announced last week that the programme vehicle they had listed was called Prime Realty Obligors Packaged Securities (Props). The programme will enable iFour to benefit from direct access to the cheaper debt available in the capital markets.

Jointly sponsored by iFour and Pangbourne, Props is a R2-billion securitisation programme. The first series of bonds launched involved a securitisation of R800-million of loans advanced to iFour. The Props loans replace R800-million of bank debt.

Securitisation allows companies to pool similar loans (such as mortgages) into bonds. The bonds then use interest paid on the underlying loans to pay interest to bondholders.

Colin Young, fund manager of Old Mutual's South African-listed property funds, says the South African-listed property market will see a lot of this type of product coming to the market.

However, Young says that debt securitisation is expensive to set up and a property company would have to have a core property portfolio of at least R1-billion to even consider one.

Moreover, one is not likely to see the benefits of a debt securitisation in the first year of its existence because of set-up costs, Young says. But benefits will flow through in a few years.

Property loan stock company Redefine Income, a large player in the listed property sector, is looking at various funding options.

Redefine CEO Brian Azizollahoff says Redefine is considering alternatives to securitisation where it can obtain substantial benefits in terms of rates without the high securitisation costs.

An alternative to securitisation is the issue of a corporate bond, which is not as advanced as a full securitisation but certainly cheaper.

Young says a corporate bond involves a company issuing a bond based on its rating and quality of track record.

Although it is cheaper to register, a corporate bond is usually riskier than a mortgaged bond because with a mortgaged bond one has fixed assets one can sell to get one's money back. With a corporate bond, the buyer assesses the risk of the company.

In July this year, Growthpoint Properties, the biggest property fund in the listed property sector with assets of nearly R7-billion, said it was planning a commercial mortgage-backed securitisation initiative which could lead to Growthpoint bonds being listed on the bond exchange in the next six to 18 months.

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