Emira Property Fund has 7.5% of 'target'

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Emira Property Fund CEO, James Templeton said the company's improved portfolio occupancy levels made a significant contribution. Emira Property Fund CEO, James Templeton said the company's improved portfolio occupancy levels made a significant contribution.

Listed property loan stock company, Emira Property Fund says it is set to increase its growth in distribution per share to 7.5% for its full year to 30 June 2014.

The company said in a statement that growth would be driven by better portfolio fundamentals, and outperform its 6.5% half-year distribution growth.

Emira Property Fund CEO, James Templeton explains there are several factors driving this outperformance.

“Our improved portfolio occupancy levels made a significant contribution. The company is achieving net property income above budget, largely due to better than expected levels of gross income," he said.

JSE-listed Emira Property Fund owns a diversified portfolio of office, retail and industrial properties. Its assets comprise 141 properties valued at R10 billion and listed investments of in excess of R600 million.

“We’ve also gained savings on the fund’s management expenses with attentive and focused management initiatives. Our successful PI buybacks in February and March also had a positive impact, and the fund benefited from the better than expected performance of its investment in Growthpoint Properties Australia (GOZ) because of, amongst other things, Rand weakness,” Templeton said.

The Fund’s total portfolio vacancies have improved considerably during the year from 5.6% in June 2013 to 5% at the end of April 2014. “Emira is performing well in a tough office sector,” notes Templeton.

Although Emira has had relatively large exposure to offices in the past, the company was re-balancing its portfolio towards retail assets.

Dipula Income Fund CEO, Izak Petersen recently commented that there are general high levels of tenant churn, especially in the competitive office sector where there is little new tenant demand.

Offices in South Africa struggled with high vacancies last year. According to research by the Investment Property Databank, last year retail properties earned a total return of 16.8%. Offices underperformed, managing a 13.6% total return.

“Retail remains our best performing sector in the portfolio with respect to like-for-like net income, while industrial is our best sector in terms of its vacancies, which are extremely low at below 1% with continuing good levels of demand,” says Templeton.

The group on Monday announced it would undertake a third expansion phase to its Wonderpark Shopping Centre in Pretoria. The centre is the largest and most valuable asset in its portfolio.

“We’re upbeat about our prospects for the next financial period and expect another good year of real growth in distributions,” says Templeton.


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