Investment management company Allan Gray has been approached about selling its controlling stake in the management company of listed property unit trust Allan Gray Property Trust (Grayprop).

But Grayprop remained tight-lipped about the approach, saying that "discussions are proceeding in this matter".

Allan Gray owns a 76% interest in the management company of Grayprop.

Grayprop MD John Rainier said he could not elaborate further.

Andre Stadler, MD of Catalyst Fund Managers, said he would be "very surprised" if Allan Gray were to sell.

"At this point, they are just fulfilling the disclosure obligations."

Mariette Warner, head of property funds at Stanlib, said she tended to agree with Stadler.

Warner said the prospective buyer may not be a local listed property company as there were no cautionary announcements from any other local listed property companies on the Stock Exchange News Service.

"But I would not rule out a prospective foreign buyer," she said.

Angelique de Rauville, MD of Investec Listed Property Investments, said there was "very little information but clearly Allan Gray are in negotiations in respect of the sale of Grayprop's management company".

"This is probably reflective of Allan Gray's view on real estate with them believing that property values in real estate are quite high at current levels," said De Rauville.

But she said some local and international investors believed there was still a possibility of significant "yields compression" and that an upward rerating in property values could occur.

Grayprop reported in November that its distributions for the year to September had increased 11,4% to 39c a unit, compared with the previous year.

Business Day