Emira Property Fund’s investment in stronger economies offset local performance, says CFO
Greg Booyens says Emira’s main growth area is in US markets, as local markets experience continued pressure.
Emira Property Fund’s diversification strategy has continued to safeguard the company against the continued pressure on local property fundamentals and the impact of the Covid-19 pandemic.
“Revenue across the property sector has been under pressure due to increasing vacancies and negative rent reversions,” explains CFO Greg Booyens. “While Emira’s revenue has decreased from the previous period due to these pressures, it has, to an extent, been limited by keeping close to tenants, understanding their needs and thereby ensuring as many as possible are retained.”
Due to these efforts, Emira retained 86 percent of those tenants whose leases expired in the six month period.
Despite seeing decreases in directly held portfolio revenue, portfolio operating profit and headline earnings per share, the property fund reported an increase of more 100 percent in earnings per share and a 4.4 percent increase in net asset value per share. It also declared a dividend increase of 8.8 percent to 56.59 cents per share for the interim period ended December 2021.
“The results validated our diversification strategy, which started in 2017, of moving a portion of our investments into a stronger economy like the United States,” says Greg. “This has effectively offset the underperformance of the local portfolio.”
While foreign operations complicate the compilation of the fund’s consolidated results, Greg adds that the team is now well experienced in pulling this through and that they still see the main growth area for Emira being under its current US path. “Locally, it’s only the industrial property sector where the property fundamentals make sense for us to invest, as evidenced by our recent acquisition of an industrial park located in Cape Town.”
Although the fund is unable to materially affect the macroeconomic environment in which it operates, the group said that its approach is to continue to ensure the fundamentals are performed with excellence.