The unit price of Madison Property Fund Managers, the first property asset management firm to list on the JSE's real estate index, in June, has dropped about 20% since listing, in line with the rest of the listed property sector.

But unlike other listed property companies, Madison's loss of value, as well as the loss of value of the listed property stocks it manages, could place its maiden distributions under pressure.

Madison listed at a turbulent time, in June, as fears of interest rate hikes in SA rocked the listed property sector. The sector has had a torrid time since early May when the sector, along with other asset classes, weakened following higher interest rates in the US.

Although the sector then recovered, it experienced another dip because of the 50-basis-point hike in SA's repo rate. Since then, Reserve Bank governor Tito Mboweni's warnings of possible further interest rate hikes have caused jitters in the market.

But Marc Wainer, an executive director of Madison, said on Monday the company was not too concerned at this stage. He said Madison still offered good value, notwithstanding the fact that the company's enterprise value had come down. Madison manages listed property funds ApexHi Properties, Hyprop Investments and Redefine Income Fund, which have suffered price knocks along with the rest of the sector.

Wainer said the acquisitions being made by the companies it managed and the fees generated from them should assist Madison in meeting its distribution forecasts, provided there were no further falls in listed property sector unit prices.

"At around these levels, we can still make our forecast of 50c a linked unit for the year to March 2007," he said

Angelique de Rauville, MD of Investec Listed Property Investments, said: "Madison's distributable earnings, unlike other listed property companies and funds, is likely to show a decrease given share price weaknesses."

She said other listed property companies and funds had generally benefited from a decrease in recent unit prices when it came to earnings, given that external management company fees were payable on market capitalisations.

"Therefore, reduced share prices means lower external management company fees."

She said Madison was the only management company listed on the JSE's real estate index and that its earnings were directly linked to unit price performance.

"On this basis, it is the only share whose distributable earnings are likely to come under pressure given the share price weakness in the market in the last two months," she said.