Investment management company Allan Gray owns a 76% interest in Grayprop's management company.

Grayprop has remained tight-lipped about the approach, saying only that "discussions are proceeding".

If Madison, which asset- manages listed property companies Redefine Income Fund, ApexHi Properties and Hyprop Investments, is indeed interested in acquiring the management company of Grayprop, it would likely want to merge Grayprop with Hyprop.

Or it would likely strip Grayprop's retail assets out and place them in Hyprop.

Hyprop and Grayprop both have blue-chip retail property portfolios so the bulk of Grayprop's retail properties fit Hyprop's profile.

Macquarie First South property analyst Leon Allison said on Thursday he believed the most likely local prospective buyers of the Grayprop's management company would include Madison, Parkdev and "possibly the likes of Growthpoint".

Parkdev is the manager of listed property unit trust Sycom and unlisted property fund Attfund.

Growthpoint Properties is the largest listed property company on the JSE, with assets worth more than R15 billion.

There is also a possibility of a price war developing between various bidders for Grayprop's management company.

Allison said Grayprop's cautionary notice on Wednesday that it had been approached by a party "effectively opened up the race to acquire Grayprop's manco (management company)".

Standard Bank's property division owns 24% of Grayprop's management company and could therefore also be a possible bidder.