Pearse said prices were at bargain levels and property remained a sound investment for income-dependent investors. Income yields of listed properties traditionally outperformed other SA unit trusts.

Yields touching 14% were 'particularly attractive' if interest rates dropped in the next two or three years and the SA Reserve Bank achieved its inflation target of 3%6%. Pearse said there was still growth in income of about 2% a year despite the weak property market with relatively high vacancy levels.

He said expected economic growth of more than 3% in the next two or three years would be positive for underlying fundamentals and would translate into higher income growth. The average historical income growth was 7% a year.

His assessment of returns over 20% were based on 12%-13% income yield and 2%-4% income growth.

'These returns are possibly conservative in a declining interest rate environment with reasonable economic growth. Property is a relatively safe haven for investors with predictable returns and high-income yields,' he said.

While capital values of property securities fluctuated with market conditions, long-term capital growth was achieved through exposure to growing property rental streams that raised the value of securities over time, Pearse said.

In the past three years, SA listed properties have produced better returns than the average return of any other broad asset class including bonds and cash, he said.