The decision to list Cupar linked units at a time seen to be hostile to listing of property is a brave move by the promoters, John Ferrans and Victor Schroeder.

Property listings slowed down as a result of rising interest rates in the past 12 months.

The Cupar linked units listing will be the second listing of a property fund in about six months. Nedcor Investment Bank and Kagiso Property Holdings listed a R636m property fund called Resilient in October last year.

Cupar brings a R612m investment to the property portfolio located in SA and Namibia. The portfolio will also be listed on the Namibian Stock Exchange.

The portfolio comes with an initial forward yield of 16,1% for the year to end February next year and is mainly made of retail properties.

Promoters say Cupar has chosen to concentrate on retail at this stage because the sector has shown the strongest performance compared with office and industrial property. They say they intend to build Cupar into a portfolio of at least R2bn within the next three years.

The portfolio is to be managed by a purpose-built asset management company called Pica Property Management. The asset management contract comes with stringent conditions, including certain objectives that will determine remuneration to the asset managers.

One condition is that should Cupar produce a performance that places it in the bottom 25% of the JSE's listed property sector in two consecutive financial years, Cupar can call the asset management company's shares.

Business Day