EMIRA Property Fund (EMI) grew distributions 9% in the year to June, thanks to effective rationalising of its portfolio resulting in vacancies falling to 4%.
Departing CEO James Templeton said he was happy to have shifted the portfolio to have a greater relative weighting in retail properties compared with offices. Retail property was a strong performer.
Besides posting total distribution growth at double the inflation rate to deliver real returns, Emira’s net asset value increased 15.9% during the year to R17.51 per participatory interest, while its total distributable income grew 14% to R685.5m.
Mr Templeton said the distribution growth had been helped by the fund’s acquisitive growth, contractual rental escalations on most of its portfolio, improved leasing and rigorous cost controls, as well as increased recoveries of municipal expenses.
“Strong performance across all metrics underpins Emira’s positive performance. “We notched up excellent top-line growth and kept expenses well contained.
“Our vacancy levels are better than all the industry benchmarks, driven by good leasing performance,” he said.
Total portfolio vacancies have fallen from 5.6% in June 2013 to 4.5% in June 2014, to 4% at the end of June this year.
He will leave Emira at the end of the month to pursue personal interests. Geoff Jennett, Emira’s chief financial officer, will replace him from September 1.
The responsibilities of Emira executive director Ulana van Biljon will be formalised to include that of chief operating officer.
Emira is appointing a new chief financial officer.
Evan Robins, listed property manager of Old Mutual Investment Group’s MacroSolutions boutique, said the group had performed well and that Mr Templeton was leaving the fund in a strong position.
“I thought it was a good result as management has been communicating. The operating metrics were particularly pleasing.
“The dividend growth number overstates the performance as it is influenced by policy changes regarding how they calculate the dividend. This will also result in a boost to dividend growth next year — but this boost is unrelated to underlying cash flow,” Mr Robins said.
Source: Business Day – www.businessday.co.za
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