Despite a challenging year, JSE-listed real estate investment trust Emira Property Fund says it has significantly improved vacancies across its portfolio to 5.3%, from 7% at its half-year, while having also renewed 77% of expiring space during the financial year to June 30.
Speaking at a presentation of the company’s results, in Johannesburg, on Wednesday, CEO Geoff Jennett said the South African operating environment had worsened and was set to remain tough, “but Emira is now on a much better footing to move forward and [improve] its performance for investors.”
He pointed out that the company’s substantial leasing progress took a lot of hard work.
“We introduced several new solutions that respond well to the fiercely competitive market. Filling vacancies and retaining tenants is a top priority,” he said.
Rebalancing its portfolio, Emira sold 11 noncore properties – or around 4% of its total portfolio – at a 1.1% average premium to book value.
“This shows that our assets are valued realistically and that Emira’s net asset value underpin is fair and reasonable,” Jennett noted, adding that a further 16 properties were being held for sale.
At year-end, Emira was invested in 135 properties valued at R13.3-billion that make up a “quality, balanced portfolio” of office, retail and industrial assets.
It decreased its office exposure from 44% to 41% during the year. Its urban and rural retail property increased to 44% of the portfolio, including its stake in Enyuka Property Fund. Industrial properties remained constant at 15% of its assets.
Continuing to invest in tactical upgrades that boost value in its portfolio, Emira has already spent R624.2-million on 17 projects to modernise, extend and redevelop assets.
The largest scheme is the demand-driven phased P-grade green redevelopment of Knightsbridge, in Bryanston. Its 68.4% prelet first phase is on target for completion in September and its fully-let second phase will be developed by June 2018.
Emira also announced that it will partner with specialist real estate investors and developers Feenstra Group for the conversion of 10 000 m2 of petrochemical giant Sasol’s former office space in Rosebank, Johannesburg, into 280 residential units.
The company closed a R364.2-million strategic black economic empowerment deal that placed 5% of its shares in black ownership, adding value to Emira and its tenants, while also contributing to transforming the South African economy.
Emira is internationally diversified through its direct interest in ASX-listed Growthpoint Properties Australia (GOZ), into which it increased its investment during the year.
The company reported a total dividend of 143.18c a share for the period.
