PRETORIA - Emira, the diversified JSE-listed real estate investment trust (Reit), has invested in its fourth shopping centre in the US by acquiring a 49percent stake in a dominant power centre in Indiana.
The company said yesterday that the acquisition grew its exposure in the biggest market in the Western world and progressed its international investment strategy.
It said it increased Emira’s exposure to the US to 3percent of its total assets and its international exposure in developed markets to 9percent of total assets, including its investment in Australian Stock Exchange-listed Growthpoint Properties Australia (GOZ).
Together with the Rainier Group of Companies, its US in-country partners, Emira has acquired 49percent of Stony Creek Marketplace valued at $32million (R401m) in Noblesville, Hamilton County.
Exposure
Emira chief executive Geoff Jennett said with this transaction the group would benefit from growing exposure to the attractive value available in the US in their chosen market segment.
“We have targeted investment in grocery-anchored convenience retail centres in resilient markets located in some of the major southern and central states.
“We are confident that our low-risk co-investment strategy in the US remains the most prudent way to increase our international diversification into this developed market.”
Stony Creek Marketplace is a 18952m² convenience retail power centre in Indiana, close to two of Emira’s existing investments in Ohio. It was shadow-anchored by a 15050m² Meijer grocer, which formed part of the centre, but was owned by the grocery chain.
The centre is 98.9percent leased with 79percent of its space let to nationals, including TJ Maxx, Home Goods, Best Buy and PetSmart. It has a weighted average lease expiry of 3.9years.
Emira said the investment represents a cash-on-cash return of 11.7percent in dollars for Emira, on a net cash equity investment of $6.5m.
The investment was funded from its existing balance sheet, chiefly with the proceeds of its programme of asset disposals from its portfolio rebalancing plans.
Jennett said in the South African market, Emira continued to recycle its capital by disposing of certain assets in accordance with its portfolio rebalancing plans.
He said it had sold and transferred three assets to date this calendar year, comprising two offices and one non-core retail property, for a total of R250m.
Jennett said this added to the tactical impact of Emira’s sale of a further six assets for a total of R236m in the latter half of last year.
“These transactions continue to deliver on Emira’s strategic thrust to rebalance our portfolio and reduce our exposure to offices.
“In addition, we have achieved disposal prices at an average premium to book values, which signals that our properties remain fairly valued in line with our robust financial management approach,” he said.
Emira owns a diversified portfolio of office, retail and industrial properties, with its directly held assets comprise 111 properties valued at R12.7bn.
It indirectly owns 21 shopping centres valued at R900.8m through its exposure to specialised property fund Enyuka.
Emira was internationally diversified through its investment in GOZ valued at R940.4m, and its equity investments in four grocery-anchored convenience centres with a combined value of $32.2m through its US subsidiary.
Shares in Emira remained unchanged at R15.30 on the JSE yesterday.