Emira Property Fund lifts its earnings
On the back of acquisitions and cost cuts.
Acquisitions concluded, contractual escalations and stringent cost control measures helped Emira Property Fund (Emira) to declare a half-year growth in distributions of 9% to 64.65 cents.
Emira’s net asset value increased by 14% during the six months to 1650 cents, while its distributable income grew 13% to R330 million.
The fund, with a market capitalisation of R9.2 billion and exposure to the retail, office and industrial sector, saw vacancies across its portfolio decrease to 4.9% for the six months to December 31.
The office sector showed the highest vacancies across Emira’s portfolio of 148 properties, reaching 7.9%. Retail sector vacancies came in at 2.8% and industrial sector reached 3.8%.
Tenant retention across its portfolio valued at R12.5 billion improved to 77% for the period under review.
“Emira’s operational performance is the best it has been in a long time,” says Emira CEO James Templeton in a statement.
“We’re delivering excellent progress in all key areas of the business and have solid strategies in place to continue this performance,” Templeton adds.
During the period, Emira acquired the R837 million Integri-T portfolio comprising of eight properties. The portfolio was acquired at an initial yield of 9.4% with an average lease length in the portfolio of in excess of five years.
Emira also acquired a 60% undivided share in Ben Fleur Shopping Centre in Emalahleni for R66.5 million at a yield of 9.4%
“We will continue to pursue strategic acquisition and development opportunities that support Emira’s strategy and performance, and fund them in a manner that enhances future earnings,” Templeton explains.
The company also embarked on a number of disposals of assets it regards as non-core properties. Emira sold four properties totalling R93.8 million at a forward yield of 8.9%. It also sold a further five buildings – that are yet to transfer – with a total value of R535.5 million at a forward yield of 6.9%.
The proceeds of the disposals will be reinvested in new acquisitions, capital expenditure projects or used to repay debt. “Emira has around 30 internal capital expenditure projects underway – the highest number we’ve ever had. Each project supports the best use of our buildings, and maintains or improves the quality of our properties,” he says.
The company has debt of R4.6 billion with the average expiry duration of 2.1 years. Emira’s loan to value reached 35.4% and 85.4% of its debt is fixed for a weighted average length of 4.1 years.
Emira shares were down by 0.77% to R18.03 during Wednesday’s trade to R18.03 at 12:05.