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Emira launches US real estate investment strategy

Nov 03 2017 16:15

Cape Town - SA REIT Emira Property Fund recently announced that its new US investment strategy, to be undertaken with its strategic US partners, will focus on grocery-anchored convenience retail centres.

Emira is already internationally diversified, with 6% of its income derived from its investment in ASX-listed Growthpoint Properties Australia (GOZ). Its US investment strategy will see this grow to an overall 8% with potential to expand to at least 10%.

“GOZ has been a phenomenal investment for Emira for many reasons and, building on this, we have targeted further international diversification in developed markets," said Geoff Jennett, CEO of Emira Property Fund.

"Having considered several investment destinations, we identified the US as being the best fit for us. It is the primary first-world market and the dollar is the world’s benchmark currency. As the biggest market in the Western world, it is extremely solid and well diversified, plus we see attractive value in our chosen segment.”

Key to its US investment strategy, Emira will co-invest with Rainier Companies, a Dallas-based investment and real estate business. Where opportunities meet predefined investment criteria, Emira and Rainier will partner on a 49% to 51% equity basis, respectively, at the individual property level.

Emira will hold its investments through a US based subsidiary, managed by in-country fund manager Continuum Investments LLC, based in Dallas, Texas, which is headed by CEO Rick Makin, a US-based South African entrepreneur.

Already, two quality assets have been identified for investment, and the first deal transferred in October 2017. Emira hence owns a minority equity stake in the Belden Park Crossings shopping centre in North Canton, Ohio, for which it paid R112m ($8.4m).

In Jennett's view, convenience retail is a safer and familiar property asset class for Emira. The type of shopping centres it is targeting in the US are supported by people buying their everyday basics. This makes them more resilient through different economic cycles, which also mitigates risk for Emira.

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