Emira looking to a strong second half by ‘doing all the basics well’
CAPE TOWN - EMIRA Property Fund – which owns office, retail, industrial and residential properties and is also invested in US retail – declared a much lower dividend of 52 cents a share (74.1c in the prior year) for the six months to December 31, but operations have remained robust, chief executive Geoff Jennett said yesterday.
Emira, which has assets of about R13 billion comprising 78 properties worth R9.9bn in South Africa and equity investments that include 10 convenience shopping centres in the US, also deferred the payment of distributable income of 5.09c a share until the financial year-end.
“Our numbers show we are consistently doing all the basics, and doing them well, even in an exceedingly difficult environment. We are encouraged by the possibility of an ongoing low interest rate environment and potential for economic recovery increasing towards the end of 2021, provided the roll-out of vaccines is successful,” said Jennett.
Emira did not provide an earnings and distribution guidance due to the uncertain environment, but management’s target for distributable earnings was 119.7c a share for the year to June 30, 2021. Support had been provided to 363 tenants who were suffering the effects of the Covid-19 pandemic, with a further R17.8 million in permanent rental remissions during the six months. This supported high-risk tenants, including gyms, restaurants and entertainment venues.
Emira expected to consider further rental concessions in the second half.
Vacancies in its local portfolio edged up to 5.9 percent from 4.1 percent, but they remained low relative to national averages.
There had been a “pleasing” improvement in rental collections, with collections as a percentage of billings at 99percent for the six months. The collection of deferred rentals were better than anticipated at 80percent, said Jennett. He said the outlook overall was challenging, with further vacancy and reversion increases still ahead for the property sector.
“More than ever before, Emira is focusing on maintaining its occupancy levels by retaining tenants. The manner in which the team has supported and collaborated with our tenants through the pandemic has strengthened relationships, positioning them well for the future,” he said.
Emira’s shares closed 1.60 percent lower at R7.38 on the JSE yesterday.