Unaudited interim financial results for six months to 31 December 2015 and dividend distribution declaration

EMI 201602170025A
Unaudited interim financial results for six months to 31 December 2015 and dividend distribution declaration

Emira Property Fund Limited
(Incorporated in the Republic of South Africa)
Registration number: 2014/130842/06
Share code: EMI ISIN: ZAE000203063
(“Emira” or “the Fund” or “the Company”)
Tax number: 9995/739/15/9
(Approved as a REIT by the JSE)

Unaudited interim financial results
For six months to 31 December 2015 and dividend distribution declaration

Growth in distributions +8,8%
Distribution per share 70,34c
Net asset per value share 1 801c
Fixed debt 84,9%

Commentary
The Emira board of directors is pleased to announce that a dividend of
70,34 cents per share has been declared for the six months to 31 December
2015. This is an increase of 8,8% on the previous comparable period and
in line with expectations.

Vacancies and tenant renewals
Vacancies have decreased from 5,1% (December 2013) to 4,9% (December 2014)
to 4,7% (December 2015) over the past two years. The steady level of low
vacancies is the result of focussed leasing in the office sector,
retaining tenants within the portfolio as well as the strategic sale
of properties such as Braamfontein Centre in Braamfontein and 122 Pybus
Road in Sandton. The industrial sector vacancy of 1,7% remains substantially
lower than the latest SAPOA national levels of 4,0% with a 0% vacancy recorded
across the Cape Town and Durban regions. Similarly, the office sector vacancy
of 9,3% and retail sector vacancy of 3,0% remain below SAPOA national levels of
10,5% and 5,3% respectively.

A total of 82% by GLA (or 82% by revenue) of expiring tenants were renewed
during the six months to December 2015.

Major leases concluded
The largest new leases concluded were at Technohub in Midrand (2 753m²),
Universal Industrial Park in Durban (1 242m²) and Industrial Village Kya Sands
(1 062m²). The largest renewals were Defy at the Defy Appliances building in
Denver (10 100m²), Salga at Menlyn Corporate Park in Menlyn (5 939m²) and
Spoor and Fisher at Highgrove Office Park in Centurion (5 814m²).

Acquisitions
Acquisitions during the period comprised (i) a 50% undivided share in Mitchells
Plain Shopping Centre in the Western Cape for a purchase price of R75,3m at an
initial yield of 9,3% and (ii) a 50% undivided share in five buildings comprising
Summit Place, the P-grade commercial development in Menlyn, Pretoria, for an
amount of R403,0m at an average yield of 8,14%. Summit Place 1 and Summit Place 2,
being the two completed office buildings in the Summit Place development,
transferred in December 2015 at a cost of R86,4m. The balance of Summit Place,
which comprises both office and retail space, will be developed by Emira and its
partners with a final completion date of January 2017. By 31 December 2015,
R110,0m had been paid for the land and development costs to date for Summit
Place 3 and Summit Place 4.

Disposals
The transfer of Brandwag Shopping Centre and Kosmos Woonstelle was concluded in
September 2015. The property was sold at a sizeable premium to book value at a
forward yield of 6,5%.

Four non-core buildings with a total disposal value of R171,5m, representing a
forward yield of 10,8% and a discount to book value of 5,2%, were sold at
31 December 2015 but have yet to be transferred.

The successful execution of the Fund’s disposal strategy is nearing completion
with very few non-core properties remaining on its disposals list.

Refurbishments and extensions
Projects to modernise, extend and redevelop 13 buildings totalling approximately
R515,1m, are currently underway, the most significant of which are the redevelopment
of Knightsbridge Manor office park in Bryanston and the upgrade and refurbishment
of Kramerville Corner in Marlboro.

The first phase of the redevelopment of the prime located Knightsbridge Manor
office park in Bryanston commenced in November 2015 and on final completion the
development will offer 29 352m² of prime P-grade office space. The R795m project
is being undertaken in three phases, with the first of seven new buildings set to
be complete in May 2017 at a cost of R368m with 50% pre-let. The new office park
will boast a minimum 4-Star Green Star SA rating from the Green Building Council
South Africa.

The R69,4m upgrade and refurbishment of Kramerville Corner is expected to be
completed by the end of March 2016.

The number of projects underway reflects the Fund’s strategy to continually
upgrade the portfolio and extract value from existing bulk.

Gearing
Despite liquidity in the debt capital markets remaining tight, Emira continued
to successfully access funding at competitive rates.

Funding activities during the six month period included:

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