Listed property unit trust Emira Property Fund said yesterday it would be acquiring a major portfolio of properties worth R844m and introducing black economic empowerment partners at equity level.

Emira CEO James Templeton said the property transaction would boost the fund's market capitalisation to about R3,8bn from R3bn, and increase its property asset base from R2,4bn to R3,35bn.

Templeton said the rationale for the transaction was to grow the portfolio and improve the quality of properties in Emira's portfolio.

He said it would also "even out the weighting" between offices and retail in the portfolio.

Offices make up 50% of Emira's portfolio. The transaction, which includes two retail properties, will bring down the office component to about 40%.

The retail component will make up 41% of the portfolio after the transaction, from 35% previously.

The transaction consists of Momentum, which holds a 38% interest in Emira, selling R450m worth of properties to Emira and in turn RMB Properties, which manages Emira, selling a further R394m worth of properties to the fund. Explaining how the black economic empowerment transaction would work, Templeton said that Momentum did not want to accept units alone in exchange for the properties it was selling.

This would only have increased Momentum's unitholding in Emira and affected liquidity because it was already a large unitholder, he said.

Templeton said a portion of Momentum's unitholding - that it would have received in exchange for the properties - would be placed on behalf of Momentum with black economic empowerment partners.

He said this would give Emira's empowerment partners a 14,2% interest in the company.

The empowerment partners include black-owned, controlled and managed investment holding company, the Tiso Group, as well as a broad-based empowerment trust called Penreach Shalamuka Foundation, and a black women's consortium and black RMB Properties' staff.

Business Day
Publisher: I-Net Bridge
Source: I-Net Bridge