Martprop, which has a strong industrial property focus, said on Friday that the low growth was due to lower rentals on certain leases when they come up for renewal.

The rest of the listed property sector is delivering average distribution growth of between 8% and 12%.

"The fact that the distribution is below the market average is directly attributable to lease reversions. When long industrial leases, which have been escalating 11%-12%, each year expire, we’re finding closing rentals are significantly higher than market renewals. On renewal you negotiate back to market," said MD Roger Perkin.

Perkin said next year Martprop also had two big property leases coming up for review and that these would "also have a negative impact".

"They will take 4% out of our growth. We are expecting similar growth of 3% next year," he said. Although the industrial property was recovering, it had not caught up yet to the levels the leases had.

"It’s really a question of those leases working their way out of the system, and after next year we won’t have any further exposure to over-let leases," he said.

In post-balance sheet events, the fund concluded agreements for the acquisition of three industrial properties in Gauteng for a total of R104,5m at an average yield of 10,25%.