Listed property loan stock company Arnold Property Fund (AProp) has turned the corner and certainly has better prospects now than it did 18 months ago before it was taken over by fund manager Corovest.

The property company's difficulties have been eased by Corovest, appointed last year at the behest of major unitholders after a substantial loss in the value of its linked units and a decline in net asset value.

Following an almost R300m boost to its property portfolio, Arnold Property Fund was officially renamed Freestone Property Holdings last week.

Unitholders approved the acquisition from Momentum of a property portfolio worth R278m and the name change, putting the finishing touches to Corovest's restructuring of A-Prop.

The acquisition brings with it a partnership between Corovest and RMB Properties to jointly manage Freestone. It reduces the company's ratio of loan to value of assets to slightly less than 60%. At one stage this ratio stood at more than 80%.

Unitholders also approved a consolidation of every five linked units into one linked unit in the new Freestone. Corovest MD Michael Aitken said last month that the unit consolidation strategy was aimed at reducing volatility in the stock's unit price.

A-Prop is trading in the 89c90c band while the price of the consolidated unit should be R4,50.

There are changes to Freestone's board of directors. Colin Brayshaw, a former managing partner and chairman of Deloitte SA, and Paul Kotze have been appointed independent nonexecutive directors with Brayshaw to chair the board.

Former chairman Paddy Cunningham has retired and Gerald Nelson has resigned.

The market has welcomed the restructuring of Freestone, which will begin trading under its new name from Monday.

Mariette Warner, fund manager of Stanlib Property Income Fund, says investors generally tend to wait for the first set of results after a restructuring before there is any significant rerating of the stock.

Prospects for the fund are good because of the positive property market, she says, and the properties purchased from Momentum will improve the portfolio.

But Warner says the value of the restructure is likely to materialise over time. The name change will have a psychological benefit, because the "negative connotations around the name Arnold will disappear".

Warner says the restructured board is experienced in managing listed property and the company's borrowings are a lot lower. This is because the purchase price of the Momentum portfolio was settled by the issue of a significant number of A-Prop units.

Mike Flax, CEO of Spearhead, the third-largest unitholder in AProp, with about 40-million linked units, says the company is very positive about the future of Freestone.