Emira cuts rentals in tough market
The property fund says it’s managed to reduce vacancies but had to lower some rentals to incentivise tenants and remain competitive.
Emira Property Fund has continued to grow its distributions to shareholders – after a temporary blip in 2017 when it lowered its dividends due to tough markets. Although conditions remain difficult, the fund says its expansion in the US has made its income streams more defensive.
Through US subsidiary CIL2 it spent $12.2 million for a 49.4% stake in a shopping centre in the state of Florida and $6.1 million for a 49.5% interest in another in Missouri in the six months to end-December. Those come on top of its $50.5 million investments in six centres in 2017, along with US partners, The Rainier Group.
At home, it’s managed to reduce vacancies, to 3.7% from 4.5%, allowing it to maintain existing rental streams. However, it had to lower rentals in some instances, particularly in the office sector, to incentivise tenants and remain competitive.
Revenue grew by 3.5% to R870 million over the period, including income from the Knightsbridge office park in Bryanston and the office and mixed use Summit Place development in Pretoria’s Menlyn node for the full period. This was partly offset by income lost from property disposals totalling R462 million last year. Income from its investment in Growthpoint Australia fell by 8% to R27.1 million after it reduced its stake to 3.3%.
It’s raised its dividend by 3.1% to 72.86c per share and says it expects similar growth in the next six-month period.
Its shares declined by 1.9% to R15.32.