Emira diversifies with Transcend stake

The property fund has acquired a 9.9% stake in Transcend and has committed to raise its holding above 25% in the next 18 months

Emira Property Fund is diversifying its property portfolio with the acquisition of a stake in Transcend Residential Property Fund and the commitment to increase its holding.

It has bought a 9.9% interest in AltX-listed Transcend for R45.9 million and has committed to advancing an additional R290 million to R395 million over the next 18 months, which would take its stake to between 25.1% and 34.9%.

Emira has been trying to reduce its exposure to local office property, with a number of buildings up for sale. At the end of June, it had earmarked 26 properties worth R1.9 billion for disposal, of which R1.8 billion are office properties. It also owns a stake in Growthpoint Australia.

Separately, Transcend said it had acquired 2 159 affordable residential units for R1.27 billion from International Housing Solutions Residential Partners and Sunnyshore Trade and Invest. The units are spread across eight properties, predominantly in the Gauteng, with a small portion in the Western Cape, and have a weighted average yield of 9.87%.

It said the deal would more than double its size, increasing the value of its portfolio to about R2.5 billion. It will fund the acquisitions 40% with equity, including Emira’s allocation, and 60% with debt. It now plans to apply for a main board listing on the JSE.

Emira’s shares rose 3.1% to R15.18 yesterday. Transcend closed unchanged at R6.10.