In the fund manager's opinion, SA listed property remains suitable for an income dependent investor considering the anticipated lower inflation and interest rate environment. However investors should be aware that SA listed property is no longer cheaper than equivalent open market property and the lack of rental growth would indicate current prices reflect a fully priced asset class.

Distributions: The distribution declared at the end of Sep was 14.2023 cpu (14.72 cpu - Jun 2003) from the Property Income Fund. The income paid (last four distributions including Sep) to investors has equated to an income yield in excess of 12.5% from both of the funds. Although there has been little growth in income over the last year, distributions are not expected to decline which protects income in an environment of declining interest rates.

Property Fundamentals: The direct property market fundamentals are improving but still remain poor. There is excess space in many geographic locations (ie, office space in Sandton). The fund manager's therefore continue to expect 0% to 1% growth in earnings over the year ahead (2003/4) and only 2% to 3% over the following two years. There are good reasons however to hold a property investment - namely the relatively high current income yield in excess of 11.5% and stable income distributions - particularly in a potentially declining interest rate environment.

Distributions
The distributions declared at the end of June was 14.7234 cents per unit (14.11 cents per unit - Mar 2003) from the Property Income Fund. The income paid (last four distributions including June) to investors has equated to an income yield in excess of 13%. Although there has been little growth in income over the last year, distributions are not expected to decline which protects income in an environment of declining interest rates.

Property Fundamentals
The direct property market fundamentals are improving but still remain poor. There is excess space in many geographic locations (ie, office space in Sandton). The fund manager's therefore continue to expect 0% to 1% growth in earnings over the year ahead (2003/4) and only 2% to 3% over the following two years. There are good reasons however to hold a property investment - namely the relatively high current income yield at 11.5% and stable income distributions - particularly in a potentially declining interest rate environment.

Distributions
The distributions declared at the end of March was 14.1127 cents per unit (14.04 cents per unit - Dec 2002) from the Property Income Fund. The income paid (last four distributions including March) to investors has equated to an income yield in excess of 14%. This has given investors a higher income yield over the last year than any other asset class.

Property Fundamentals
The direct property market fundamentals are improving but still remain poor. There is excess space in many geographic locations (ie, office space in Sandton). It is for this reason that the fund manager's expect 0% to 1% growth in earnings over the year ahead (2003) and only 2% to 3% over the following two years. There are other good reasons however to hold a property investment - namely the relatively high current income yield at 12. 5% - particularly in a potentially declining interest rate environment.

The Marriott Property Income Fund re-opened for new investments, 27 January 2003.

Due to new listings in the South African property market in the first
quarter of 2003 Marriott have re-open the fund. The fund will remain fully
invested in listed property as per the fund mandate. The fund is open to
all investors including those investing via linked products. The fund is
also able to accept new debit order clients.

The distribution declared at the end of December was 14.0485 cents per unit (14.01 cents per unit - Sept 2002) from the Property Income Fund. The income paid (four distributions including December) to investors over the last year (2002) has equated to an income yield of 14%. This has given investors a higher income yield over the year than any other asset class.

The direct property market fundamentals remain poor. There is excess space in many geographic locations (ie, office space in Sandton). It is for this reason that Marriott expect 0% to 1% growth in earnings over the year ahead (2003) and only 2% to 3% over the next three years. There are other good reasons however to hold a property investment - namely the high current income yield at 13.5% - particularly in a potentially declining interest rate environment.