Emira ascribes 'good' results to Goz investment

Posted On Wednesday, 17 August 2011 02:00 Published by eProp Commercial Property News
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Emira Property Fund, a listed property unit trust, has posted a 5% rise in distributions to 113.52c for the year ended June.

James TempletonIt attribut ed its performance to its increased investment in Growthpoint Properties Australia (Goz), growth in property income and benefits from internalising its asset management company.

Emira CEO James Templeton said the fund’s results were "good", considering that the local property market was still struggling to recover from the recession and there was increased competition.

"We managed to make savings from asset management fees after the restructuring of our management company, we also benefited from our investment in Growthpoint Properties Australia, with the weaker rand assisting and growth in our property income," Mr Templeton said.

Emira last week announced a further R61,1m investment in Goz. The fund now effectively owns 8,2% of the units in Goz , or 23,8-million of the units in issue.

Emira made its first investment in Goz in May last year when it acquired 10,25-million units, or 6,4% of the units in issue, at a cost of R116,6m after being given regulatory permission to invest a portion of its funds abroad.

Emira investors enjoyed a healthy total return of 16,1% during the 12 months to June, comprising capital appreciation of 7,2% and an income return of 8,9%, which represented the distributions actually paid out during the period under review.

During the period, capital values in the listed property sector benefited from a search for yield from investors, while expectations that global and local interest rates would remain lower for longer benefited bond yields, to which property yields were closely related.

"Although there was still leasing activity in all three sectors — office, retail and industrial — rentals were under pressure and landlords needed to be competitive in attracting or retaining tenants, particularly in the office sector, "Mr Templeton said.

He said the next 12 months would remain challenging. "It is a tough market with challenges in retaining tenants and acquiring new ones. "Mr Templeton said acquisitions were "far between" at lower yields.

Stanlib head of property funds Keillen Ndlovu said the income growth of 5% was fairly in line with expectations. "The results, in general, are reflective of a tough property market, more so the secondary property market to which Emira is mostly exposed," Mr Ndlovu said.

He said rising costs were not helping the situation.

"The 2012 financial year income outlook is more negative than what the market thought." Of concern was that vacancies throughout the portfolio were rising.

The fund’s vacancies jumped to 11,4% in December and rose marginally to 11,5% in June.

However, on an adjusted basis (excluding properties under refurbishment or redevelopment), vacancies rose from 7,9% to 10,3%.

Office vacancies rose from 16,3% to 18,4%, retail vacancies from 5,3% to 7,5% and industrial vacancies from 5,1% to 7,2%.

Last modified on Thursday, 24 April 2014 14:47

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