This could bode well for listed property funds on the acquisition trail this year. Angelique de Rauville, MD of Provest part of Investec says this resulted from the rerating of more than 20% of unit prices in the listed property sector last year.

Only a handful of funds currently trad e at a discount to their net asset value.

However, De Rauville says that th is does not necessarily mean the se funds are offering better value than the stocks trading at a premium to their net asset value.

"Neither does trading at a premium imply the stock has a preferential rating in the sector. But it does mean that property unit trusts and property loan stocks can buy physical properties at higher yields or a lower price than the cost of issuing paper.

"As long as capitalisation rates, or the yield at which you acquire the physical property, are higher than listed property yields, it is earnings positive for listed property funds to buy direct property with paper or cash.

"As long as that scenario exists we will continue to see listed property firms on the acquisition trail," says De Rauville.

She says the question remains whether there is sufficient appetite for listed property paper.

"There has been a recent weakness in unit prices of property unit trusts and property loan stocks and the gap between listed property yields and capitalisation rates has narrowed, but listed property is still trading at a premium to direct property."