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Johannesburg - Emira Property Fund has refined its strategy to make the most of opportunities, generate distribution growth, gain in size and create value for its shareholders, CEO Geoff Jennett said on Tuesday.
While many listed property funds are targeting all their growth offshore in the current market, Jennett said Emira will take a more cautious approach to growing its international investments.
“There are still opportunities in the local market for a company of our size,” explained Jennett. Emira has targeted 90% of its growth in South Africa.
In his view Emira - a JSE-listed SA REIT (real estate investment trust) - is strongly positioned for responsible growth, notwithstanding the adverse economic environment in SA. Emira has its sights set on growth, Emira has targeted growth in both the local and international markets.
Emira has a diversified portfolio of South African commercial real estate, and an offshore investment in Growthpoint Properties Australia (GOZ). Currently, GOZ comprises around 7% of Emira’s assets. Emira’s SA portfolio comprises 45% office, 40% retail and 15% industrial assets – a mix Jennett is confident is within optimum levels.
“We believe there is up to 5% room to move in each sector, allowing growth across the various asset classes at different paces in response to market opportunities, availability, preference and performance,” said Jennett.
He added that Emira’s strategy also provides the ability to take a stake of up to 5% in alternative asset classes, beyond the traditional mainstay property subsectors. These could include assets such as developments, residential property, student accommodation, frail care, petrol stations and storage, though it has plans to start to with a small co-investment in the residential sector.
Jennett said for its offshore investment, Emira is aiming for the progressive growth of its international property holdings up to around 10% of its asset value. However, he stressed the importance of specific market knowledge for offshore investment.
“Our exposure to GOZ, an investment that has done tremendously well for Emira over the years since our initial investment in 2011, has given us excellent insight into the Australian market. We believe we are now in a position to consider direct investment in this market should suitable opportunities present themselves,” said Jennett.
“We like this model of gaining quality knowledge about international markets, and will consider extending this into other geographies as we aim to grow our portfolio of international investments from 7% to roughly 10% of total assets.”
