JSE-listed Emira Property Fund achieved a positive performance for the six months ended September 30, owing to strengthening operational metrics, active asset recycling and strategic deal-making, reflected in its reshaped portfolio, CEO Geoff Jennet says.

The company is on track to deliver on its objectives for the full financial year, which it expects to result in marginally higher distributable income compared to that achieved for its prior financial year, he informs.

Emira’s distributable income a share increased by 6.9% for the interim period.

The company declared a 1.1% higher cash-backed interim dividend a share of 62.39c.

Emira’s net asset value per share increased by 12.3% to 1 945.50c apiece, owing to rising property valuations and the fair value equity gain from Emira’s maiden investment in Poland.

“Emira’s local portfolio outperformed, our US investments are comfortably on track, and we completed the first tranche of our investment into DL Invest, bolstering our diversification by tapping into Poland's burgeoning economy with its unique growth drivers and opportunities,” Jennet outlines.

Emira invested €55.5-million for an initial effective 25% equity stake in DL Invest Group, a Luxembourg-headquartered property company developing logistics centres, mixed-use or office complexes and retail parks, valuing its assets at €730-million and net asset value at €278-million pre-investment, with the option to increase this further.

Emira’s investment will fund DL Invest Group’s logistics development pipeline, aiming to create a €1-billion business. The partnership aligns with its co-investment strategy with in-country specialists.

Emira will participate actively, with board representation, and has committed to an initial five- to six-year investment term.

Funding for the first tranche of investment came from Emira's balance sheet and recent disposals.

Its noncore commercial and residential property sales transferred, completed and agreed upon during the period totalled R2.6-billion.

Emira’s strategic capital recycling aims to strengthen liquidity by disposing of noncore assets that can be sold at fuller value. This would create capacity to invest in undervalued opportunities with stronger growth potential.

Emira had a healthy balance sheet at period end, with an adequate 2.3 times interest cover ratio and a loan-to-value ratio that declined from 42.4% to 42% over the six months and is expected to decrease further as property disposals transfer and a portion of the proceeds are deployed to reduce debt.

It reported unused debt facilities of R370-million and cash on hand of R112.8-million at half-year, which will increase as proceeds from disposals are realised.

The first tranche of its latest transaction has immediately increased Emira’s international investments to 26.8% of its portfolio – with 15.5% in the US and 11.3% in Poland – while 73% remains in South Africa.

The second tranche DL Invest Group option creates the potential for this to become nearly 37% offshore.

SA PORTFOLIO
The local portfolio performed well, surpassing most key targets.

South African commercial vacancies reduced to 3.9% from 4.1%.

The portfolio saw an increase in like-for-like valuation of 4.7%, reflecting enhanced metrics across all three sectors and improved business sentiment, Emira reports.

Residential occupancy remained strong at 96.7% and, similarly, maintained like-for-like valuation levels.

Emira’s commercial portfolio by value is split between urban retail (43%), office (25%) and industrial (15%) of the directly held South African portfolio.

All sector vacancies are below the applicable benchmarks and tenant retention increased from 81% to 83% by revenue during the period.

Its 15-property directly-held retail portfolio of primarily grocery-anchored neighbourhood centres catering to their communities is indicated to be trading well with improved metrics, including low vacancies of 4.2%.

Despite the slump in office sector fundamentals, Emira’s portfolio of 20 mainly P- and A-grade office properties saw office vacancies improve slightly, into single-digit territory, from 10.9% to 9.4%.

Emira’s diversified industrial portfolio of 28 properties experienced strong demand, with vacancies stable at 0.7%.

The commercial portfolio benefited from R119.8-million in tactical upgrades, including various sustainability-driven initiatives, reconfigurations and refurbishments.

Emira also invested R8.6-million into its residential portfolio.

Jennett says easing inflation, declining interest rates and growing political stability in South Africa are changing the outlook for local real estate and that, when positive factors yield measurable results, Emira will be well positioned to continue delivering strong returns to investors.

Emira’s 12 equity investments in US grocery-anchored dominant value-oriented power centres total R2.56-billion.

The US portfolio had a low vacancy rate of 3.5%, and delivered a solid performance, adding R120.1-million to Emira’s distributable income.

“Emira’s strategic pivot is in full swing as we target opportunities with robust growth potential tightly aligned with our long-term goals. These solid half-year results put us firmly on track for a marginal increase in distributable income for full-year 2025, reinforcing Emira's consistent record of reliable performance,” Jennet highlights.