Liberty Two Degrees (L2D), which offers investors exposure to shopping centres Sandton City, Nelson Mandela Square and Melrose Arch, saw its dividend shrink in the six months to June. The group blamed poor economic growth and weak consumer spending.

L2D declared a half-year distribution of 29.31c per unit for the six months to June, results showed on Monday, which while in line with expectations was still 2.3% lower than the 30c per unit declared for the six months to June 2017.

CEO Amelia Beattie said even though SA’s economic recovery had been slow and consumers were under pressure, L2D’s asset size had increased healthily from R6.1bn at the end of June 2017 to R8.7bn at the end of June 2018.

Trading densities at its malls were starting to improve thanks to the introduction of new brands and tenants having managed their stores better.

"L2D’s portfolio is performing well from a trading perspective, as is evidenced in the turnover growth figures at the flagship assets, recording a positive year-on-year trading density growth of 2.8%," she said.

"Overall, the group’s portfolio sustained a positive turnaround in trading densities in the period compared to a negative 6% at June 2017," said Beattie.

She said the firm had listened to shareholder concerns about its corporate structure.

She said a restructuring process as well as the internalisation of its management company would be completed by October 2018.

It would remove the put option that allowed its parent company, Liberty, to sell assets to L2D at any time.

In the past, L2D could be forced to be a buyer of assets regardless of whether the assets would improve the fund, Anas Madhi, a director at Meago Asset Management, said.

L2D has been an underperformer, with its share price having fallen about 8.98% to R8.30 in 2018 so far. It plummeted 20.48% in 2017.

Some fund managers said though L2D had disappointed, an improvement would come within the next six months and over the long run it may be a successful listing.

Real estate analyst at Anchor Stockbrokers Rael Colley said it was "notable that L2D was still guiding towards a distribution per unit of 60c for their full-year 2018 financial results, which would represent a 1.3% increase year on year".

Evan Robins, of Old Mutual Investment Group, said the underperformance was not due to poor management.

"Operating conditions have been extremely tough. The management are not actually bad managers," he said.