Emira pays sturdy dividend as property vacancies remain low in SA and the US

Emira CEO Geoff Jennett. Photo: Supplied

Emira CEO Geoff Jennett. Photo: Supplied

Published May 31, 2024


EMIRA Property Fund paid out a 55.28 cents per share final dividend for the six months to March 31, compared with 30.35c for the three months to March 31, 2023, following operational results that included successful value unlock from investments, a strong balance sheet and strengthened liquidity from capital recycling.

Distributable earnings for the year came to R622.1 million compared with R55.8m for the nine months to March 31. The total dividend was 117.1c, compared with 96.78c for the nine months which, while strictly not comparable, represents a 20.9% increase.

“Both our SA and US portfolios delivered pleasing operational performances, notwithstanding local and global challenges.

“Our leasing success and low SA commercial vacancies – down from 4.7% to 4.1% over the year – and high and stable residential occupancy of 97.4% are proof of a portfolio that’s attractive, competitive, flexible and built to deliver sustainable value,” CEO Geoff Jennett said in a statement yesterday.

He said they expected to deliver marginally higher distributable income for the year to March 31, 2025, despite low-growth expectations for South Africa, high interest rates and market uncertainty.

Emira has a directly held portfolio of 90 properties in South Africa worth R12.1 billion, split between retail, office, industrial and the residential sectors. Emira also holds 19% of its assets in indirect property investment in 12 US grocery-anchored open-air shopping centres.

During the year, Emira acquired the residential specialist Transcend Property Fund and sold its share of the lower LSM retail-focused Enyuka Property Fund. It also sold non-core properties worth R596m, while a further R2.4bn was due to transfer in the next six to 12 months, including Emira’s post year-end sale of 13 office and industrial properties in the Western Cape to Spear REIT.

“Our capital recycling creates capacity and flexibility for Emira, demonstrating the effectiveness of our strategy to seize opportunities with better growth prospects that align more closely with our long-term strategic objectives … This year, we have established a particularly strong liquidity position, which will be bolstered by the R2.4bn from upcoming transfers,” said Jennett.

The direct commercial portfolio was split between urban retail (43% of the SA portfolio value), office (24%) and industrial (14%). Jennett said all sector vacancies were “well below” their applicable benchmarks.

Vacancies were a low 3.9% at its 17-property strong directly held retail portfolio of primarily grocery-anchored neighbourhood centres catering to their communities, which were trading well with improved metrics.

The portfolio of 20 mainly P- and A-grade office properties saw operational metrics move in a positive direction, with vacancies improving from 12.5% to 10.9%.

The industrial portfolio of 32 properties, with near full vacancy, enjoyed strong demand and delivered defensive performance.

Residential rental assets increased from one to 21 properties over the year – or 19% of Emira’s directly held SA portfolio – and includes The Bolton in Rosebank, Johannesburg, and 20 properties from Transcend.

The portfolio of 3 775 units is split between Gauteng (87% by value) and Cape Town (13%) high-demand areas. Vacancy was at 2.6%, excluding units held for sale.

Emira’s 12 equity investments in US grocery-anchored dominant value-oriented power centres “delivered a solid performance, adding R222.6m to Emira’s distributable income,” the group said.