Emira Property Fund has seen a decline in its distributable earnings despite reporting greater net property income, as it felt the effect of its sale of unlisted rural retail owner Enyuka Property Fund, lower income from its US investments and elevated interest rates.
The real estate investment trust (Reit), valued at about R4.6bn on the JSE, reported on Thursday in its results for the six months to end-September that its net property income rose 10.7% to R507.4m. However, distributable earnings declined 18% year on year to R310.6m and distributable income per share by the same margin to 59.44c.
However, the year-on-year numbers are not directly comparable after Emira, which owns a diversified property portfolio in SA and the US, recently changed the end of its financial year from June to March to align with that of its majority shareholder, Castleview Property Fund.
“While the persistent high level of uncertainty in the local and global macroeconomic environment, coupled with elevated interest rates and inflationary pressure is expected to restrict growth, specifically on the local portfolio,” the company said, adding that it believes its diversified portfolio by region and sector should mitigate some risks.
Emira’s portfolio of retail, industrial, office and residential properties comprises 81 directly owned properties locally and 19 indirectly offshore.
The overall vacancy rate improved 0.6 percentage points to 4.1%, while the loan-to-value (LTV), which measures the ratio of loans to the value of assets, improved 2.8 percentage points to 41.2%. An interim dividend of 61.74c per share was declared, down 7.1% year on year.
On Monday, Emira took full control of Transcend Residential Property Fund after concluding a cash deal to increase its stake from 68.15% at the end of the reporting period to 100% now, resulting in Transcend delisting from the local bourse.
Transcend previously said the limitations from the regulatory processes involved with being listed outweighed the benefits.
One of the reasons Transcend listed on the JSE in 2016 was to gain access to institutional investment funding and to grow its property portfolio, but it said it was hampered by a lack of investors looking to invest in smaller property companies.
Emira first bought a stake in Transcend in 2018, which focused on affordable housing in high-growth urban areas in Gauteng and the Western Cape, and made a similar takeover offer in July 2022 before the deal fell through.
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