Johannesburg - Stanlib, the country's largest unit trust company, is forecasting 15 percent growth in the listed property market over the next year.

Mariette Warner, manager of the Stanlib property income fund, said at a presentation yesterday that this was a conservative estimate and that property returns in the past two years had overshot predictions.

But she warned that there would be an inherent capital risk with property investments if there was an interest rate shock.

Looking at listed property stocks, Warner noted that Hyprop had been a consistently strong performer. With two of the country's best retail properties on its books, its biggest asset was Canal Walk in Cape Town.

Hyprop bought 80 percent of the property in 2003 and its value at the end of last year was recorded at R932 million. Warner was excited about Canal Walk's prospects because a residential boom in the area would continue to create real demand for the mall.

Another of Hyprop's best assets was Rosebank Mall in Johannesburg, which last year realised returns of 13 percent rather than the forecast 11 percent.

Warner pointed out that last year the property loan stock index had a higher yield than bonds or cash. She added that Premium, Octodec and Spearhead had all shown "phenomenal" earnings growth.

Overall, listed property had a 1.3 percent higher yield than bonds.

And retail properties were not the only stars. After having a bad time of it three to four years ago, Warner showed that Sandton was picking up again and vacancies were very low.

Rentals in the central business district of Cape Town were storming ahead.

The second best performer in this market was Durban, although Warner was at a loss to explain Durban's surge.

Proximity to central in Johannesburg had become a positive sign again, with Parktown rentals staging a comeback.