The higher US interest rates had caused lower tolerance for emerging market risk.

The property funds with large market capitalisations suffered the biggest dips in unit prices.

A rights issue by listed property loan stock company Redefine Income Fund also suffered because of the plunge in listed property prices.

Redefine said on Monday it had raised R175,1m, instead of the R330m it had expected.

It needed the capital for various activities, including acquisitions and developments.

CEO Brian Azizollahoff has said Redefine offered 53,5-million new units to existing unitholders at R6,20 after the company's unit price touched the R6,90 mark in the weeks prior to the rights issue.

Although the unit price had settled near R6,50 in the past few weeks, it plunged to R6,10, below the rights issue price, on Friday.

Redefine's rights issue offer closed on the same day.

Consequently only 52,52% of the rights were taken up.

Azizollahoff says the "whole listed property market has come off at least 10% in the past week".

"We dropped along with the rest of the listed property sector."

He says the rand weakened as interest rates in the US were increased, causing the dollar to strengthen.

"We are an emerging market and they (emerging markets) generally feel the brunt of a strengthening dollar.

"The listed property sector has also dropped in line with the rest of the (South African) stock exchange," he says.

However, Azizollahoff says Redefine is not under pressure to have another rights issue to raise a total of R330m.

"One only has a rights issue if your share price is such that it makes economic sense to issue more units for cash.

"We have the option of using borrowings because the cost of borrowings is relatively cheaper," he says.

Mariette Warner, head of property funds at Stanlib Asset Management, says the interest rate hike in the US caused the dollar to strengthen, which in turn caused "negative sentiment towards emerging markets, which are more risky".

This has affected asset classes across the board in SA.

The SA Listed Property Index has fallen 8% since May 12 and this would have affected Redefine's rights issue.

Warner says other large property companies, such as Growthpoint and , have also experienced a drop in prices.

Growthpoint's unit price has come down 13% since May and closed at R11,65 on Monday.

Grayprop's price has dropped almost 11% from May 12.

Warner says Grayprop's unit price also dropped because it recently paid out distributions.

ApexHi Properties' A units were down almost 11% from May 12. Part of the drop can be attributed to the fact that ApexHi also recently paid out distributions.

"The more liquid property funds were the most affected," says Warner.

First South Securities property analyst Leon Allison says most stocks declined on the JSE in the past week.

"You can't expect global equities to come under significant pressure and have the listed property shares escape it," Allison says.

He does not believe the listed property unit prices will remain weak for too long.

"The bottom line is that property fundamentals are strong and improving.

"The earnings growth (from the listed property sector) surprises more on the upside than downside.

"I can't see any reason why there should be continuing weakness in property share prices," he says.