It is with great pleasure we inform the unit holders that the ABSA Property Equity Fund was named as the "Best in Sector" Winner on a relative risk adjusted measure by Micropal Fund Awards in association with the Financial Mail for 2007 performance.

The FTSE/JSE Listed Property Total Return Index was down -2.24% for the month of September 2008, and down -11.92%% for the year to date and up 30.67% since inception. Consumer Price Inflation (CPIX) jumped to 13.6% year on year in August 2008 from 13.0% in July. The number exceeded market consensus of 13.3%. The headline CPI accelerated to13.7% year on year from 13.4% in July. We expect this to be the peak in consumer inflation. The main drivers were food inflation and fuel and power category. The fuel and power category, which largely comprises electricity tariffs, recorded a 4.2% m/m price escalation. According to Stats SA, there are still some smaller municipalities that haven't implemented the full electricity tariff increase yet, which may be captured in subsequent months. The market remains focused on the medium-term inflation trajectory and the risks posed to it, in particular by the rand's reaction to global financial turmoil and domestic political developments.

Producer Price Index (PPI) came in at 19.1% year on year and was marginally lower than what the market expected at 19.2% year on year. The categories with a more direct bearing on consumer inflation performed more or less in line with our expectations. The numbers reinforce our baseline view that the SARB will embark on an easing cycle from mid-09, although the forecast risk around this remains quite high at this stage, which should bode well for the listed property sector in the medium to long term.

There is a clear trend to move away from the poorer quality retail property as empirical evidence has suggested that this is the least defensive retail property in an economic downturn. During September 2008, SA Corporate Real Estate Fund was down -10.45% and Emira -5.43%, because of their exposure to poor convenient and neighborhood shopping centres. The fund has been lightening exposure and will continue to do so. Counters with quality defensive regional shopping centres continue to trade well as evidenced by results announcement in August.

From a cyclical perspective, offices and industrial property continue to show significant upside opportunity as vacancies hit all-time lows and the supply of new office and industrial are constrained for numerous reasons including the high cost of funding, escalating cost of construction, lack of suitably zoned property and electricity constraints.

The market was mixed in September and the following counters recorded a negative total return in excess of 5%: Pangbourne -14.04%, Redefine -9.51% and Fountainhead -5.27%. However the following counters were defensive and recorded a positive return: Ambit 4.98%, Sycom 4.04%, Hospitality 3.02% and Premuim 0.61%.

The fund invests primarily for the medium to long term and invests in quality counters with sustainable cash flow that can grow and support a high dividend pay-out. The fund selects a core portfolio with long term out-performance and maximize the portfolio yield with lower than average risk.

It is with great pleasure we inform the unit holders that the ABSA Property Equity Fund was named as the "Best in Sector" Winner on a relative risk adjusted measure by Micropal Fund Awards in association with the Financial Mail for 2007 performance. The FTSE/JSE Listed Property Total Return Index was down -8.04% for the month of June 2008 and down -28.44% for the year to date. The main factors contributing to listed properties poor performance is an environment of negative real interest rates and tight credit globally. Global inflation is ticking up across the world and the world will experience expect sharp surge in food and petrol prices. Oil price is at an all time high, and petrol price hikes locally are expected to continue. CPIX latest figures came in at 10.9%, before implementation of NERSA's price hike. CPIX expected to peak 3rd quarter 2009 and PPI at 16.4% also continues to exceed expectations. PSCE and Money Supply continue to surprise at higher than consensus levels, and consequently, GDP is expected to slow down further resulting in less demand for space. Funding margins are increasing due to impact of global credit squeeze. Physical property values will fall as higher risk premiums are demanded, resulting in property capitalization rates of 9.5%, which are well below the funding costs of 13.5%. Listed property is likely to remain under pressure while the market is worried about SA interest rates. The listed property market has been highly volatile and June did not provide any consolation with all counters contributing negatively to the index barring Octodec which contributed 2.3%. The following counters contributed negatively in excess of (-10.00%): Sycom (-18.79%), ApexHi A (-12.31%), ApexHi C (-11.56%) no exposure to the fund, Pangbourne (-11.42%) and Hyprop (-10.97%) and SA Corp Real Estate (-10.89%). The domestic inflation environment has deteriorated. It is not only short-term inflation expectations have increased, but so have expectations of long-term inflation. Implied break even rates suggest the market no longer believes the inflation target is no longer credible. Higher inflation favors nominal property prices and higher rentals, but the increase is an illusion because borrowing costs increase faster. Consequently nominal distribution forecast implies lower real distribution growth. The fund invests primarily for the medium to long term and invests in quality counters with sustainable cash flow that can grow and support a high dividend pay-out. The fund selects a core portfolio with long term out-performance and maximize the portfolio yield with lower than average risk.

The FTSE/JSE Listed Property Total Return Index was down -4.00% for the month of March 2008 and down -10.94% for the year to date. The main factors contributing to listed properties poor performance to date is the global aversion to listed property from inception.

CPIX inflation jumped to 9.4% year on year in February 2008 from 8.8% in January and was in line with market expectations. As expected, the bulk of the contribution to the increase in CPIX stemmed from food and fuel costs, with the food and transport categories contributing 0.2 and 0.1 of a percentage point respectively. One of the big question markets hanging over the inflation trajectory is the mooted 60.0% electricity tariff increase that Eskom recently applied for and the impact it have on inflation. PPI came in at 11.2% year on year and was higher than the consensus forecast of 10.7%. The data still reflects substantial food price pressure that will likely filter through to the retail level in due course.

We suspect that the SARB is satisfied that it has been successful in slowing domestic demand growth to non-inflationary levels and that the current inflation pressure largely stems from interest rate insensitive factors. However, given the lag with which the interest rate hikes in 2H07 will impact on the economy and inflation, the pressures witnessed now do not yet reflect the impact of these interest rate hikes. We believe that the monetary tightening has peaked and we should possibly see the last 50 basis points hike in prime rates in April barring any further external shocks.

The listed property market has been highly volatile this year and March did not provide any consolation with only 8 counters outperforming the index. The following counters outperformed the index: Madison (10.63%) no exposure to the fund the counter and is highly volatile, Fountainhead (3.16%), Apexhi B (1.62%) and Apexhi A (0.57%). The following counters contributed negatively in excess of (-8.00%): Resilient (-13.30%), SA Corporate (-12.15%), Siyaprop (-11.34%), iFour (-11.12%) and Emira (-10.24%).

Property fundamentals are still positive and we expect the sector to deliver total returns of 16.6% made 8.6% earnings yield and capital return of 8%. The fundamentals will be supported by rising rentals because of the continuing high levels of building inflation which will put pressure on building replacement cost and limit potential supply.

The fund invests primarily for the medium to long term and invests in quality counters with sustainable cash flow that can grow and support a high dividend pay-out. The fund selects a core portfolio with long term out-performance and maximize the portfolio yield with lower than average risk.

The FTSE/JSE Listed Property Total Return Index was up 27.26% for the year from 1 January 2007 to 31 December 2007 and up 58.76% from the fund's inception to 31 December 2007. The listed property market was down by -1.85% for the month of December.

Economic data released during December 2007 shows CPIX increasing to 7.9% year on year, this accelerating further away from the South African Reserve Bank's ("SARB") target band. This continued acceleration driven mainly by food prices is expected to result in CPIX breaching the 8% level early in 2008.

However, PPI slowed noticeably to 9.1% during November 2007 from the previous month's number. This surprising slowdown was due to a drop in agricultural product prices and food prices. The result of this may be that food inflation may peak sooner in 2008 than originally anticipated.

A risk still exists for further monetary policy tightening at the SARB's next MPC meeting at the end of January 2008. This upside risk is further reinforced by the recent announcement that there will be a 14.2% hike in electricity tariffs in 2008. Volatility across the markets continued in December with several listed property stocks losing ground, including: Growthpoint (-3.35%), Redefine (-3.23%), Hyprop (-5.30%), APA (-6.15%). Some of the gainers for the month include: Resilient (+2.27%) and Acucap (+1.18%).

The risk of more interest hikes, could negatively impact, especially the retail sector. Turnover rents which accounts for approximately 3% of gross rentals in the retail sector will slow down and impact on distributions will be between 4% - 6% depending on gearing and costs. Line shops will suffer because of higher rentals, slowing demand and higher interest rates and there is increased risk of defaults. Retail returns are expected to lag industrial and office returns over the next 2 to 3 years.

The fund invests primarily for the medium to long term and invests in quality counters with sustainable cash flow that can grow and support a high dividend pay-out. The fund selects a core portfolio with long term out-performance and maximize the portfolio yield with lower than average risk.