Emira Property Fund ups its distribution by 7.5%

Emira Property Fund CEO, James Templeton attributed the solid results to proactive leasing and asset management which boosted its distribution by 7.5%.

Proactive leasing and asset management boosts Emira Property Fund interim results in the year ended June 2014, growing its distributions per share 7.5%, the company announced last Wednesday.

Emira’s net asset value increased by 9.2% during the year to 1 447 cents per participatory interest (PI).

The performance in distributions was an improvement on the 6.5% achieved in the six months to December.

Emira Property Fund CEO, James Templeton attributed the solid results to contractual escalations on the bulk of the portfolio, vacancy reduction and stringent cost control, including savings from its property management tender, investing in upgrades to prime properties, as well as disposing of non-core properties.

“During 2014, Emira achieved the highest occupancy level across its portfolio since 2005. The benefit of our improved occupancies and our forecast containment of property expenses in the coming year will drive another year good performance in 2015, should there be no major deterioration in the economy,” Mr Templeton said.

Listed on the JSE since 2003, the Fund began trading as a REIT from 1 July 2013. It has a diversified portfolio of office, retail and industrial properties. Its assets comprise 141 properties valued at R10.8 billion.

Emira is also internationally diversified through its direct interest in ASX-listed Growthpoint Properties Australia (GOZ), valued at R666 million at 30 June 2014, with total assets now at R11.6 billion. 

The company says its vacancy levels decreased from 5.6% to 4.5%. Industrial property, which makes up 16% of its overall portfolio, achieved vacancies of a mere 1%, fully-let portfolios in KwaZulu-Natal and the Western Cape.

Its Retail sector recorded a vacancy rate of 2.7% but its office sector, representing 50% of its portfolio, improved from 10.7% to 8.8%.

Old Mutual Investment Group portfolio group manager Evan Robins says "Operationally, Emira is getting a handle on itss portfolio, it's not an easy portfolio, but operational metrics were impressive." 

Robins says on the distribution growth front, Emira delivered slightly better than expected. "We are more conservative with our numbers. We have seen many property companies delivering on 8% growth."

During the year, the average value of Emira’s properties increased from around R64 million to R76 million.

Acquisitions totalled R705m at a forward yield of 8.7 percent. Total building sales were valued at R501m, which would fund acquisitions and developments.

Income from Emira's offshore investments in Australia increased by 21.7% due to an increase in the distribution per unit received from GOZ, the depreciation of the Rand against the Australian dollar and its increased units held.