EMIRA ACQUIRES STAKE IN TRANSCEND RESIDENTIAL PROPERTY FUND
Emira Property Fund will take a minority stake in JSE AltX-listed Transcend Residential Property Fund, furthering Emira’s stated strategy of expanding its investment in residential rental property.
Transcend has announced its intent to issue new equity to fund the R1.27 billion acquisition of eight properties, which will effectively double its portfolio value to R2.5 billion, taking it from from thirteen properties to twenty-one properties, and increasing its residential units from 2,472 to 4,631. At the same time, it will realign its capital structure.
Emira has provided an immediate R45.9 million equity injection into Transcend, resulting in a 9.9% holding of Transcend’s total shares in issue. In addition, Emira has committed to advance between R290 million and R395 million of funding for Transcend’s planned property acquisitions in the next eighteen months and has signed an irrevocable commitment for between 25.1% and 34.9% of Transcend’s total shares in issue, effectively underwriting Transcend’s portfolio acquisition.
Transcend joined the JSE AltX in December 2016 and intends to migrate to the Main Board in due course. It invests in specialised residential property assets. It currently owns 2,472 units in secure estates mainly in Gauteng, as well as the Western Cape and Mpumalanga. The Residential REIT delivers housing to a heavily under serviced market at affordable monthly rentals that are in the sweet spot for a growing middle class in SA’s urban centres. Its mainly two- and three-storey walk-up apartments are in desirable, high-demand neighbourhoods and often have lifestyle-enhancing facilities. Transcend’s asset manager is IHS Asset Management and its operations and property managers are IHS Property Management.
Geoff Jennett, CEO of Emira, says, “Emira’s investment approach is to co-invest with hands-on sector specialists who have a good track record of success in their markets. Our investment in Transcend aligns with this approach, and gives Emira exposure to a business run by specialists with the skills, critical mass and relationships to generate further opportunities. It will enhance Emira’s portfolio diversification.”