LISTED property unit trust South African Corporate Real Estate Fund yesterday posted a disappointing set of results for the year to December, reporting distribution growth of only 1,4%, to 28,42c a unit, on the low side of management’s guidance of 1% to 3%.

Stanlib’s head of property funds, Keillen Ndlovu, said yesterday SA Corporate had been a "perennial underperformer".

"The market is yearning for decent and inflation-beating income growth. Sadly, management is expecting virtually no growth in distributions in 2012," he said.

The fund blamed its low growth in distributions largely on disposals made in 2010 and last year. Industrial rental growth of 10,6% was underpinned by the take-up of vacant space, solid tenant retentions combined with positive rental reversions.

Retail rental income decreased 2,9% despite improved vacancies, with SA Corporate attributing the reduction to a combination of the effect of disposals and negative rental reversions, which refer to renewals of rentals at levels below average market rentals.

Commercial rental income fell 2,7%, with the decline attributed to the effect of property disposals. This was partly offset by a 5,9% decrease in vacancies, a rise in tenant retentions to 93% in the overall office portfolio, and positive rental reversions of 1,8%.

The fund’s industrial portfolio has been a star performer and a big saviour, with a vacancy factor of 1,4%, but retail vacancies, at 9,7%, remain high relative to other listed property stocks.

Mr Ndlovu said he was concerned about instability on the board and Old Mutual Property. "The SA Corporate board has experienced a number of resignations lately and the management changes at Old Mutual Property, the asset manager of SA Corporate, are also a concern," Mr Ndlovu said.