Emira Property grows despite headwinds
JOHANNESBURG – Emira Property Fund’s rebalanced portfolio grew its distribution and saw fewer vacancies for its half-year ended 31 December 2019 despite facing headwinds of a low-growth and an uncertain environment.
The fund on Wednesday reported a 1.7 percent year-on-year increase in distribution. Geoff Jennett, the chief executive of Emira Property Fund, said: “By doing the right things consistently over the past four years, we have shifted and repositioned our portfolio with a long-term view.”
Emira’s portfolio consists of office, retail, industrial and residential properties. It is invested in 79 directly held South African properties, valued at R10.9 billion.
At the close of its half-year, Emira held 10 percent of its investments offshore with its equity investments in nine grocery-anchored open-air convenience shopping centres in the US, valued at $75.9 million (R1.14bn) through its US subsidiary and its holding in ASX-listed Growthpoint Properties Australia, valued at R234m.
Of note, in the US, Emira acquired its tenth property with its US-based partner, the Rainier Companies, on February 3, after the close of its half-year.
This takes its US assets to 7.9 percent of Emira’s total assets or $89.2m. Emira said it had improved the vacancies in its portfolio from 3.6 to 3 percent during the half-year, while 82 percent of expiring tenants, by revenue, were renewed.
Despite Emira tightening its administration costs during the period, it said that its gross cost-to-income ratio had increased from 37.3 to 39.2 percent driven by “soaring electricity costs and higher municipal rates charges”.
Emira said to combat this it had continued to invest in alternative energy sources and initiatives to reduce electricity and water consumption. It had nine solar farms, as well as various water harvesting and waste recycling projects in place.
Looking ahead Emira said it expected similar growth in dividends for the second half of its financial year. Jennett said this guidance took a realistic view of the market conditions, vacancy profiles and expected rental revisions, as well as anticipated opportunities.
“We will continue to fine-tune our portfolio and business for sustainable performance and results,” he said.