Vunani sees buying opportunities returning

Vunani‚ which recently reported strong distribution growth of 19.7% for the year to June‚ said its "very modest" acquisition activity as its one disappointment for the financial year.

But Kane said on Monday (26 August) that the fund had been unable "to see value" in the market‚ given inflated property prices. He said some funds had been buying properties at yields below 8% for what he called "not particularly attractive assets".

"We have a perception of value and we are unwilling to pay more than that‚" Kane said.

He said it was likely to take a few months for prices to be reasonable‚ but the price corrections of May and June have bought a bit of sanity into the market.

"Much of the sector is likely to continue turning down deals that they had been targeting‚ until sellers adjusted their expectations‚" Kane said.

He said that the fund was very pleased with the results of its rights offer‚ which closed last week and raised R455m. About 3.6% of the rights units were allotted to the underwriter with the remainder being subscribed by unit-holders.

"Our target was to raise the full R455m and that's what we did‚ so we couldn't be happier‚" Kane said.

Vunani was also looking at tapping into the debt capital markets‚ most likely in the second half of the 2014 financial year.

Kane said the fund expected to accelerate its acquisition activity in the new financial year‚ albeit in a controlled manner.

For the year to June‚ Vunani grew its distributions per linked unit by 19.7% to 77.25c. Vunani management expects distribution growth in this financial year of between 8.7% and 11.3%‚ with distributions between 84c and 86c per linked unit.