"There are indications that the listed property market is nearing its peak, so the potential for major out performance is no longer there," he said.

"In addition, most of the growth has already been achieved, and the last quarter of this year won’t add significantly to this."

Metropolitan Asset Managers believed that, barring unforeseen circumstance, interest rates would remain flat over the next 12 months, and inflation would remain under control, thereby favouring property in the longer- term and supporting the view that prospects for the sector were positive.

Of the various listed property sectors, the retail sector had been the strongest performer this year, Naidoo said, outperforming the industrial and commercial sectors.

Naidoo said that this was mainly a result of demand for retail space, which was driven largely by the consumer spending boom.

The commercial sector has been the worst performer.

However, Naidoo said there were indications that this could change as the demand for office space steadily increasesd.

Property loan stock companies such as Hyprop and Growthpoint had done well this year but overall returns from property unit trusts were disappointing.

The main reason for this, said Naidoo, was that loan stocks were able to gear up to a maximum of 100% on their balance sheets, whereas unit trusts could only gear up to 30%.

"Because of lower interest rates, the income that loan stocks received was higher in terms of the yield on the property, so their gearing was quite positive," he said.

Listed property was an attractive option for investors who could afford to buy a house, but still wanted exposure to the property market.

Because yields on listed property were better than cash and bonds, and due to the potential of capital appreciation, it was an especially attractive asset class for people with pension plans, retirement annuities, or pensioners.

Overall, although the outlook for listed property was positive, Metropolitan Asset Managers believed that equities would outperform listed property this year, while bonds had experienced a poor run this year.

"Looking ahead over the next 12 months, the overall economic environment continues to favour listed property, and we believe that there is ongoing value to be found in the sector," Naidoo said.