Economic recovery boosts Emira distributions

Posted On Thursday, 19 August 2010 02:00 Published by eProp Commercial Property News
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Emira Property Fund has announced a rise of 6,7% in distributions to 108,08c per participatory interest unit for the year to June thanks to a recovery in the global economy.

James TempletonListed property unit trust Emira Property Fund yesterday announced a rise of 6,7% in distributions to 108,08c per participatory interest unit for the year to June thanks to a recovery in the global economy, which assisted letting in the period, as well as an improvement in the local inflation outlook.

The improvement in the inflation outlook resulted in the yield on government long-dated bonds declining and Emira’s unit price rising sharply.

The performance of listed property tends to track the performance of bonds because they are both income generating investments.

CEO James Templeton said yesterday the first half of the financial year proved to be quite tough with poor economic growth, rising vacancies and rentals coming under pressure. But in the second half the market improved as letting activity picked up and vacancies stabilised.

Emira unitholders enjoyed a total return of 32,8% during the 12 months to June, comprising capital appreciation of 22,6% and an income return of 10,2%, which represented the distributions actually paid out during the financial year.

The fund’s strong appreciation in its unit price was ahead of the South African listed property index, which appreciated 18,6% in the same period.

Excluding straight line adjustments from future rental escalations, Emira’s revenue rose 8,7% over the previous comparable period — mainly as a result of organic income growth from the existing portfolio as well as the inclusion of income from properties acquired during the year and the contribution from several capital projects completed last year and now generating income for the full year.

Although tenant arrears remained relatively high, the actual bad debt charge for the period fell, with leasing expenses also declining year on year.

Property expenses for the period under review rose 8,1% year on year, which was lower than the rise in gross revenue of 8,7%.

When compared to December, vacancies at year-end remained stable at 9,2%. Vacancies in the industrial portfolio declined from 5,5% to 5,1%; retail vacancies declined marginally from 5,9% to 5,3%; and office vacancies increased from 15,3% to 16,2%.

Five small capital projects totalling R20m were completed during the period. They consisted of mainly extensions for existing tenants at Southern Centre (Bloemfontein); Wonderpark Shopping Centre (Pretoria); Ingwavuma Shopping Centre; and the addition of parking at Tuinhof in Centurion.

A further seven projects worth R161m are under way.

Last modified on Wednesday, 22 January 2014 09:46

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