Acquisitions support property fund’s distribution growth

The increase in distribution is as a result of Emira’s acquisitive growth

JAMES TEMPLETON The increase in distribution is as a result of Emira’s acquisitive growth

4th September 2015

By: Sashnee Moodley

Senior Deputy Editor Polity and Multimedia


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JSE-listed Emira Property Fund reported distributions per participatory interest (PI) of 134.27c – a distribution growth of 9% – for the 12 months to June 20, 2015.

Emira’s net asset value increased by 15.9% to 1 751c/PI and it achieved a distributable income growth of 14% to R685.5-million.

Outgoing Emira CEO James Templeton said the increase in distribution was a result of the fund’s acquisitive growth, the contractual rental escalations on most of its portfolio, improved leasing and rigorous cost controls, as well as increased recoveries of municipal expenses.

Previous Emira CFO Geoff Jennett has replaced Templeton as CEO.

“Strong performance across all metrics underpins Emira’s positive performance. “We notched up excellent top-line growth and kept expenses well contained. Our vacancy levels are better than all the indus-try benchmarks, driven by good leasing perfor-mance,” he stated.

Vacancies decreased from 5.6% in June 2013 to 4.5% last year and to 4% in June 2015.

This represented a decline in overall vacancies of 16 225 m2 since June 2013, driven by leasing in the office sector, as well as strategic sales of certain properties.

Emira’s 7.8% office sector vacancy remained below the South African Property Owners Association (Sapoa) national levels of 10.6%, while its retail vacancy of 2.8% and its industrial vacancy of 1.4% were also better than the national levels reported by Sapoa and Investment Property Databank.

The fund achieved tenant retention of 76% by gross lettable area.

Emira reported a loan-to-value ratio of 33.4%, and 84.6% of its interest rate exposure was fixed for a weighted average of 3.6 years.

Emira was also efficiently recycling its capital by concluding beneficial disposals of noncore properties and reinvesting the proceeds in upgrades, improvements and acquisitions.

It had also established a development pipeline of over R2-billion to support its strategic growth.

Emira acquired consulting company Integri-T’s R830-million diversified portfolio consisting of eight properties during the year.

It also acquired a 60% undivided share in Ben Fleur Boulevard, in Witbank, in Mpumalanga for R66.5-million.

Further, Emira secured the acquisition of a 50% undivided share in the Mitchell’s Plain Shopping Centre, in the Western Cape, for R76-million.

Subsequent to year-end, Emira agreed to take a 50% undivided share in five prime-grade office and retail buildings forming part of the Summit Place mixed-use development in Menlyn Pretoria for R403-million, subject to approvals.

Emira continued its strategy to dispose of non- core buildings, selling and transferring eight properties totalling R361.5-million at a forward yield of 7.1% and a 20% premium to book value.

It also disposed of four buildings, yet to be transferred, with a total disposal value of R321-million, representing a forward yield of 6.9% and a premium to book value of 47%.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor


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