Emira Property Fund has finalised a Scheme of Arrangement (SOA) resulting in Transcend Residential Property Fund becoming wholly owned by the REIT.
In 2018, Emira took its first 34.9% stake in the then JSE-listed property fund, diversifying its investments to include the value suburban multifamily residential rental property segment.
Since the initial investment, shifts in the market saw the appetite for small-cap stocks dry up and, being illiquid, there was no longer value in Transcend remaining listed. Emira responded by increasing its ownership in Transcend with a view to bringing it in-house. Emira grew its holding in Transcend to 68%, eventually reaching 100% late last year.
“Our journey with Transcend is a success story for Emira. We partnered with the right asset management team to advance our diversification and earn good returns,” comments CEO of Emira, Geoff Jennett.
“We are pleased to have successfully converted a good indirect equity investment into a wholly owned subsidiary, adding another powerful lever to Emira’s overall diversified strategy. Residential property now represents about 16% of our South African portfolio, although this is likely to change in line with market opportunities.”
Emira’s investment approach has played out advantageously in its take-up and subsequent sale of a stake in Growthpoint Properties Australia and its co-founding and accretive sale of its stake in specialist retail fund Enyuka. This tactic is also driving Emira’s incremental investment into the US where its asset-by-asset capital allocation approach with in-country specialist co-investment partner, The Rainier Companies, has secured a meaningful 19% of Emira’s asset base offshore in equity investments of R2.8 billion (USD 151.9 million) comprising 12 grocery-anchored open-air convenience shopping centres.
Ensuring consistency for the Transcend portfolio’s 4 000 tenants, the properties will continue to be managed by International Housing Solutions (IHS).
