At Wednesday's annual general meeting, 57% of unit holders who voted, including Hyprop Investments, which owns a 46% interest in SA Retail, voted against a resolution that would have allowed SA Retail to use units as part-payment for property transactions.

Hyprop, which launched a hostile takeover bid for SA Retail at the end of March last year, managed to acquire more than 40% of SA Retail after a protracted battle with Marriott, the managers of SA Retail.

Explaining why Hyprop voted against the resolution, Hyprop MD Pieter Prinsloo said on Wednesday it was one way of stopping SA Retail from using "units as a currency for further property acquisitions".

"We are concerned about the overall performance (of SA Retail) and also we are concerned that they (SA Retail) want to do property transactions for the sake of diluting Hyprop?s unitholding (in SA Retail)."

Prinsloo said Hyprop was "dissatisfied as unitholders" with the performance of SA Retail, the management of the company, as well as a proposed transaction that would see SA Retail buying a property portfolio from Sharemax Investments.

"We are concerned about the quality of the properties SA Retail wants to acquire and the low yield at which they want to acquire them," he said.

SA Retail had also "underperformed" against other property companies with large retail portfolios in a booming retail market.

Retail-focused SA Retail delivered disappointing results for the year to March, with only a 3% increase in distributions to 71,2c a linked unit. At the time, most retail-focused listed property companies had performed well, with some reporting double-digit growth in distributions.

Prinsloo said retail-focused Hyprop had delivered distribution growth of 21% for the six months to June and that Resilient Property Income Fund, another property company with a large exposure to retail, had delivered an 18,44% increase in distributions for the six months to June. Property company Octodec, a prominent player in the retail property market, had delivered distribution growth of 31% for the year to August.

Prinsloo said Hyprop still believed there was value in SA Retail's underlying property portfolio.

SA Retail on Wednesday reported a 13,7% increase in distributions for the six months to September.

SA Retail MD Peter Sparks said this demonstrated the company's "ability to deliver to unit holders free of the impact of corporate action by Hyprop".

"The cost associated with the Hyprop corporate action suppressed earnings growth in the 2006 financial year. While under the Hyprop offer and in terms of the regulations of the Securities Regulation Panel, we were not able to buy, sell or develop our properties. We were hamstrung. It?s very difficult to grow earnings in these circumstances," said Sparks.

He said allegations that the proposed transaction with Sharemax was wrongly priced were "misplaced".

"We are proposing to acquire the portfolio at a price lower than the independent valuations and at a price which will not be dilutory to existing unitholders."

Sparks said it was "disappointing that Hyprop found it necessary to vote against every resolution proposed", including the adoption of the annual financial statements and the appointment and remuneration of auditors. "In all but one resolution, they were the only negative vote."

He said there was one other institutional unitholder which voted against the resolution for the issue of units for part-payment in transactions. Sparks said this unit holder, as a matter of course, voted against the issue of units for property transactions in all of the property counters in which it was invested.