Emira and ONE establish joint specialised fund

LISTED property fund Emira and retail property specialists ONE Property Holdings have established a specialised fund with the aim of jointly growing their retail assets and creating a larger low living standards measure (LSM) retail portfolio.

Called the Enyuka Property Fund, the portfolio of the joint venture is expected to grow to critical mass within the next five years, at which point its future will be assessed.

The options include a separate listing or reincorporation into Emira.

Emira said yesterday that it would contribute its 15-asset rural retail portfolio valued at R575 million to Enyuka, but would continue to hold first right on these properties.

ONE Property Holdings, an unlisted capital growth fund represented by chairman Selwyn Smith and chief executive Chris van Reenen, will contribute its development pipeline of similar lower LSM retail assets.

The group has invested in a portfolio of nine shopping centres with in excess of 120 000 square metres of retail space valued at about R1.2 billion and a pipeline of a further R1bn.

Apart from Emira’s portfolio of rural retail properties, Enuyka will commence operations with a R50m cash contribution and a gearing cap of 50 percent, which creates a war chest for immediate acquisitions and developments up to a further R625m.

The joint venture partners said there was a current pipeline of R400m of similar assets and further development opportunities of up to R500m.

In addition, Enyuka has first right on opportunities for lower LSM retail coming from both ONE and Emira.

The transaction is still subject to several conditions, including the approval of the competition authorities. Once the transaction has been finalised, Emira will hold a 49.9 percent share of the ordinary equity in the businesses and ONE a 50.1 percent stake.

ONE will be largely responsible for growing the Enyuka portfolio through acquisitions and developments, but together with Emira will also undertake the asset management operations within pre-set limits.

Geoff Jennett, the chief executive of Emira, said yesterday that they were excited about this strategic partnership, which would enable them to expand Emira’s retail assets.

Shares in Emira rose 0.14 percent on the JSE yesterday to close at R14.