Redefine said the sale was in line with its stated strategy of reducing its holdings in listed securities, which are trading at a premium to net asset value. Redefine said it would then invest the proceeds in higher-yielding fixed, or unlisted, properties.

Redefine Income Fund was the first listed property company to advocate a combination of investing in other listed property stocks and fixed property when it listed in February 2000. This type of investment vehicle is known as a "hybrid".

Redefine CEO Brian Azizollahoff said yesterday that about a year ago Redefine's portfolio was weighted in favour of listed securities at a ratio of 60:40.

Investment in listed property stocks now accounts for just under half of Redefine's portfolio, with the balance weighted in favour of fixed property.

Azizollahoff said Redefine's short-term target was to have a portfolio with 60% fixed properties and 40% listed securities.

He said the yield on Grayprop units was much lower than the yields at which Redefine could buy fixed property.

Azizollahoff said the proceeds from the sale were going to be used to acquire fixed properties for which agreements had already been signed.

Colin Young, fund manager of Old Mutual's South African-listed property funds, said he backed Redefine's move.

He said there was a "window of opportunity" to swap from listed property to fixed property, because it was now possible to buy fixed properties at higher yields than listed property stocks, and, by implication, more cheaply.