Many other property real estate investment trusts (Reits) have deferred dividend payments through the Covid19 pandemic in order to preserve cash resources and balance sheet strength. The dividend for the full year to June 30 was 31 percent lower at 104.36 cents a share after a first half performance in line with positive guidance, and a “particularly challenging” second half after the group worked with its tenants “to make sure they survived… These are stormy waters,” chief executive Geoff Jennett said yesterday in a webcast.

He said that as a JSE-listed Reit, Emira existed to provide a platform from which investors could access net rental income from its underlying portfolio of diversified property investments. On this basis, and because Emira anticipated to be able to meet its future financial obligations, the decision was taken to declare a final dividend. That said, protecting the balance sheet and liquidity remained a priority, so distributions were treated conservatively, “Emira is only distributing cash backed net profits that it received during the period, after making provision for additional cash reserves in its US investments,” he said.

Some of the steps taken through the period of the pandemic included providing rental deferments and discounts to tenants, using a combination of remote and office working, paying full salaries and full and regular payments to service providers, focusing on communities and environments and engaging with debt providers to provide comfort that the group remained within debt covenants. Loan-to-value was 43 percent at year end, slightly higher than what the group had wanted primarily due to adjustments to interest rate hedges, but the figure was well within the nearest debt covenant of 50 percent, said Jennet.

There was also R95m in cash on hand and R619m in un utilised backup facilities, he said. Distribution per share fell 15.2 percent to 128.36c. Net asset value fell 14.6 percent to 15.30c, with the primary reason being the revaluation of property assets. “Emira was fortunate to enter this new environment with solid fundamentals in place after our comprehensive four-year strategic portfolio rebalancing process, which we have shared with the market at every step along the way. Emira is realistically poised to recover ahead of the curve,” said Jennett.

Emira has a portfolio of office, retail, industrial and residential properties. It has 79 directly-held South African properties valued at R10.2 billion and is diversified offshore with equity investments in 10 grocery-anchored open-air convenience shopping centres in the US. Outperforming South African Property Owners Association’s average results, Emira closed the year with a low 4.1 percent vacancy level, and an 80 percent tenant retention rate. A 34.9 percent stake in specialist Reit Transcend Residential Property Fund, also gave Emira indirect exposure to the residential rental property sector.

Its exposure to Enyuka Property Fund, a rural retail property venture with One Property Holdings, means Emira invests indirectly in 24 lower LSM shopping centres valued at R1.7bn. On the international front, Emira sold the balance of its units ASX-listed Growthpoint Properties Australia and sharpened its offshore focus on its US investment strategy with its US-based partner, The Rainier Companies. The acquisition of its tenth US shopping centre asset took its equity investments in the US to R1.6bn. The share price fell 2.96 percent to R5.58 yesterday afternoon on the JSE. It closed at R5.48.