Under South African law a bare dominium property is one where the cash flow of the lease has been stripped out and sold on to a third party for a set period. They carry the prospect of strong capital growth once the income flow reverts to the owner.

Lance Hunter, managing director of Catalyst Property Finance, said: 'The 13 initial properties which have been centralised into Leverage are in the major metropolitan areas and are tenanted by major companies. The mortgage maturity dates range from 2006 to 2011, but the leases extend in most cases beyond these dates. As the properties are paid off and as, in time, new leases are signed, Leverage will have full claim to the income from the assets.

Hunter said Leverage is a long-term capital play, with a target return 21% or more. He intends to grow the fund aggressively to a size where it could be eligible for a listing on the Johannesburg Stock Exchange. 'Our aim is to acquire other bare dominium properties, either for cash or for equity in Leverage from owners who want to spread their investment risk across a portfolio, or for a mix of cash and equity,' he said.