Emira declares 56.59cps interim dividend off resilient performance

CEO of Emira Property Fund, Geoff Jennett.

Emira Property Fund has reported an interim dividend of 56.59 cents per share and distributable income of R329.2 million for the six-month period ended December 2021 – 8.8% higher than the prior year

The REIT’s South African portfolio of 77 directly held properties is now valued at R9.8 billion and it recorded an improved vacancy rate of 6.1%, down from 6.4%, with an increase in its tenant retention rate to 86%. Its weighted average lease expiry (WALE) was extended to 2.8 years with monthly collections of 102.4% of rent billed, including 100% of deferred rentals from between April and June 2020. While portfolio arrears decreased to R62.7 million, it granted rental concessions of R1.8 million during the reporting period, mostly to tenants in the hospitality and entertainment sectors.

Its retail portfolio (49% of its total asset value) has vacancy of only 3.6% with its turnover having increased by 2.5% for 2021 (year-on-year). Its industrial portfolio, comprising of 19% of its overall property portfolio, boasts an equally impressive vacancy rate of 3.5% however its office properties (30% of its total assets) are only 81.8% occupied.

The Bolton in Rosebank, Emira’s only direct residential asset and a co-investment with Feenstra Group, reported a 95% occupancy rate, up from 92.2% at the end of 2021. Emira has specialised indirect partnerships with Transcend Residential Property Fund (with an increased 39.2% stake) which contributed R14.7 million to its distributable income for the period, as well as its 49.9% stake in Enyuka Property Fund, a dedicated rural and lower LSM retail property venture with One Property Holdings, which contributed R42.6 million to its distributable income for the 6 months.

The company invested R64 million in projects across its portfolio and acquired the Northpoint Industrial Park in Cape Town for R103 million with transfer taking place post-period in late January 2022. It disposed of the Epsom Downs Shopping Centre and Epping Warehouse after the interim close. Its Colony Shopping Centre and Universal Industrial Park are currently held for sale. The value of Emira’s local properties reduced by a net 0.2%, factoring in a fair value increase of 0.5% and capital expenditure of R64 million for the 6 months. Its net asset value per share increased 1.5% to 1,540 cents per share.

Emira’s loan-to-value (LTV) ratio showed a 0.9% movement to 41.8%, ensuring ample debt headroom with a 2.8-times interest cover ratio. It has access to undrawn facilities of R615 million and cash on hand of R103 million. In May last year Global Credit Rating Company gave Emira a corporate long-term credit rating of A(ZA) and short-term rating of A1(ZA), with a negative outlook.

14.8% portion of its asset base is made up of equity investments in 11 grocery-anchored, open-air convenience shopping centres in the US currently valued at R1.9 billion which contributed R89.1 million to its distributable income for the period. Vacancies in this portfolio improved from 7.1% to 5.9% with a portfolio WALE of 5.5 years.

 “Emira has done well to endure and hold firm through uncertain times, continue our track record of consistently delivering on strategies and come through challenges stronger. We can do this because we have a distinct purpose and clear direction. Most of our assets are in South Africa, where the local macroeconomy remains concerning and needs political reform to improve meaningfully. Our tenants need a growing economy to sustain their businesses and thrive. In contrast, our assets in the USA are enjoying the benefit of a growing economy, which shields Emira and validates our diversified investment approach as a good risk mitigation strategy. We are well positioned for the future and expect to continue to perform for our stakeholders and pay shareholders cash-backed dividends”, commented Geoff Jennett, CEO of Emira Property Fund.