Emira sees positive year
• Plan is to reverse drop in interim dividend in the 2018 financial year
Emira Property Fund’s distribution growth will return to positive territory in its 2018 financial year, says CEO Geoff Jennett, despite a rise in vacancies in its office portfolio, an oversupply of offices in SA, rising municipal costs and negative rental reversions. It reported a dividend per share of 68.93c for the half-year to December.
Emira Property Fund’s distribution growth will return to positive territory in its 2018 financial year, according to CEO Geoff Jennett, despite increased vacancies in its office portfolio, an oversupply of offices in SA, rising municipal costs and negative rental reversions.
Emira reported a dividend per share of 68.93c for the halfyear to December, 2% down on the comparable six months.
Emira is a medium capitalisation, diversified, JSE-listed real estate investment with a mixed portfolio of office, retail and industrial properties. Its assets comprise 142 properties valued at R13.3bn. Emira is also internationally diversified through its direct interest in Growthpoint Properties Australia, of which it owns 4.9%.
Emira warned the market in June 2016 that its income growth would shrink during the financial year to June 2017.
After a prolonged legal battle Emira won an interim award to claim for a damages amount, still to be determined by an arbitrator, from former tenant Worley Parsons for breach of a valid lease agreement.
“We are fully focused on coming through the current challenges with a stronger portfolio and an even better business. We have clear strategies in place to do this. Emira has made good steps towards a return to positive growth in 2018 and will continue to investigate all opportunities to create value and ensure growing and sustainable earnings for our investors,” said Jennett.
During the period, Emira sold and transferred two properties for R130.2m at a combined premium to book value of 26.7%. The fund committed to selling a further 19 properties valued at R917.1m. Unconditional sales have been concluded for R381.2m of these properties and they are expected to transfer before June 30.
Evan Robins, listed property manager of Old Mutual Investment Group’s MacroSolutions boutique, said the group’s performance illustrated how the commercial office market was struggling. “The fall in the dividend, that is -2%, due to an unexpected sharp increase in office vacancies, was last year’s news. This may be the sector’s most extreme example so far of how difficult the office market can become. It is pleasing, however, that Emira was successful with their Worley Parson’s arbitration,” said Robins.