Emira Property Fund has reported a steady performance across its commercial portfolio, despite slight increases in vacancies due to property disposals, according to the company’s pre-close operational update for the five months ended August.
The fund’s total vacancy rate rose marginally to 4.3%, from 4.1% in March, largely driven by the disposal of six properties during the period, which generated R446m in gross proceeds.
The disposals included two retail and four industrial properties, with an additional 20 properties currently under contract, expected to bring in R1.9bn once transferred.
Emira said its commercial portfolio, consisting of retail, industrial and office properties, has largely performed in line with expectations, with tenant retention standing at 87% for leases that matured during the period.
The weighted average lease expiry (WALE) for the fund improved to three years from 2.7 years in March, while lease escalations remained steady at 6.5%.
Emira’s retail vacancies rose slightly to 4.2%, with a WALE of 3.6 years and strong lease retention at 92.4%. The office sector saw vacancies improve to 9.1%, but lease retention was low at 69.2%.
In contrast, the industrial portfolio performed well, with vacancies rising modestly to 1.6%, WALE at 2.9 years, and positive reversions at 4.4%.
In its residential portfolio, Emira saw vacancies rise to 5%, though this was attributed to held-for-sale units. Excluding these, vacancies stood at 3.4%.
Collections were strong at 99%, and 163 units were sold, generating R149.2m in disposal proceeds. Another 31 units are under contract for sale, with 24 expected to transfer by the end of September.
The US portfolio of 12 grocery-anchored properties continued to perform in line with expectations, maintaining a vacancy rate of 3.6%.
A highlight of the period was Emira’s acquisition of a 25% stake in Polish logistics firm DL Invest Group for €55.5m, with an option to increase its stake to 45% by January 2025, pending shareholder approval.
In April the group announced it had agreed to sell 13 predominantly industrial and office properties situated in the Western Cape to Spear Reit for R1.146bn.
Despite an increase in its loan-to-value ratio to 43.4% due to this investment, Emira maintains a solid balance sheet with R300m in unused debt facilities and R144m in cash reserves. The company remains on track to meet its 2025 financial year objectives and will release its half-year results on November 14, it said.
“The LTV will reduce once the properties currently under contract for disposal have transferred and proceeds received are used to reduce debt,” the company said.
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