Emira is on the prowl for acquisitions
Property fund has a pot of cash and is keen to build its asset base
Emira Property Fund, owner of Knightsbridge Office Park in Bryanston and the Quagga Shopping Centre in Pretoria whose offer to take over SA Corporate Real Estate was rebuffed last week, says it is still in a strong position to buy other local real estate companies.
Following the release of financial results on Wednesday for the year to June, Emira CEO Geoff Jennett said that as Emira has more cash and less debt than many of its peers, it could acquire other property funds in the depressed economy.
Emira had tried to buy SA Corporate but it was prevented from doing a due diligence on the diversified group. It had wanted to gain exposure to SA Corporate’s R4bn residential portfolio.
Jennett said that after SA Corporate’s board reappointed its head last week, it “said it wouldn’t entertain any offers so we couldn’t do a due diligence. This was a pity as we saw strong value in SA Corporate”.
Emira CEO Geoff Jennet shares his take on what the annual numbers suggest for the company's strategy going forward.
“Through AFHCO they own very attractive residential assets. We have been trying to increase our exposure to that sector of property having recently bought a 34.9% stake in Transcend. So we could have built a residential platform but this opportunity was missed,” Jennett said.
He said Emira is looking for other buying opportunities in SA.
Emira grew its dividend 3.1% in the reporting period, in line with guidance while its net asset value climbed 2%, pleasing fund managers who have had to endure negative dividend growth from their investments in other property funds.
“The company has done well the last few years to improve the quality of assets. The strategic focus to sell B-grade office assets and recycle capital into share buybacks and offshore investments is starting to pay off,” Nesi Chetty, senior portfolio manager at Stanlib, said.
Emira is the only JSE-listed fund with exposure to US commercial property. Its exposure to US shopping centres also grew from R458m to R1.065bn during the period, which Chetty labelled positive.
“Their partnership in the US with Rainier is coming along nicely. The pipeline offshore of deals is growing,” he said.