Emira plays to its strengths, targets 90% growth in South Africa

JSE-listed Real estate investment trust (Reit) Emira Property Fund is well positioned for responsible growth, JSE-listed real estate investment trust (Reit) Emira Property Fund is well positioned for responsible growth, despite the adverse economic environment in South Africa, says Emira CEO Geoff Jennett.

He noted in a statement on Tuesday that while, in the current market, many listed property funds were targeting growth offshore, Emira would take a more cautious approach to growing its international investments.

Emira had targeted 90% of its growth in South Africa and would increase opportunities in its existing portfolio, as well as through acquisitions, developments, strategic partnerships and corporate actions.

“Even in this tough environment there are opportunities to grow. We’re committed to keeping pace and even outgrowing the sector,” said Jennett.

For its offshore investment, Emira was aiming to grow its international property holdings progressively – up to around 10% of its asset value.

Emira had a diversified portfolio of South African commercial real estate and an offshore investment in Growthpoint Properties Australia (GOZ), which comprised around 7% of Emira’s assets.

“Our exposure to GOZ has given us excellent insight into the Australian market. We believe we are now in a position to consider direct investment in this market, should suitable opportunities present themselves,” noted Jennett.

He added that Emira would consider extending this into other geographies as it aimed to grow its portfolio of international investments from 7% to roughly 10% of total assets.

As a balanced Reit, Emira’s South African portfolio comprised 45% office, 40% retail and 15% industrial assets.

“We believe there is up to 5% room to move in each sector, allowing for growth across the various asset classes at different paces in response to market opportunities, availability, preference and performance,” he stated.

Jennett added that Emira’s strategy also opened the way for the company to take a stake of up to 5% in alternative asset classes, beyond the traditional mainstay property subsectors. These could include assets such as developments, residential property, student accommodation, frail care, petrol stations and storage, though the company had plans to start with a small co-investment in the residential sector.

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