Emira launches strategic venture with ONE to boost its rural retail investments

Geoff Jennet, CEO, Emira

Geoff Jennet, CEO, Emira

Emira Property Fund today announced it has joined forces with retail property specialists ONE Property Holdings to grow their retail assets together and create a larger low LSM retail portfolio. For this venture, Emira and ONE will launch a specialised fund by the name of Enyuka Property Fund. Enyuka is the Zulu word for ascend.

Emira will contribute its 15-asset rural retail portfolio to the new associate business, which is dedicated to growing a significant retail portfolio. ONE will contribute its development pipeline of similar lower LSM retail assets. The transaction is subject to normal suspensive conditions including Competition Commission Approval, and this is expected to be forthcoming in the near future.

Housed in the new associate business, these properties will deliver returns to Emira at the same income yield they currently achieve in its portfolio, together with annual escalations up to a pre-set level. The excess above the set benchmarks are shared within the venture. What’s more, Emira will get the added benefit of returns from the development pipeline above a lower level target benchmark together with a meaningful participation in an actively-managed and growing base of rural retail assets.

The Enuyka Property Fund is starting out with Emira’s R575 million portfolio of retail properties, a R50 million cash contribution and a gearing cap of 50%, which creates a war chest for immediate acquisitions and developments up to a further R625 million. There is a current pipeline of R400 million of similar assets, and further development opportunities of up to R500 million. In addition, Enyuka has first right on opportunities for lower LSM retail coming from both ONE and Emira.

With all this behind it, the strategic focused relationship is set to grow Emira’s low LSM retail portfolio at a faster and better rate than that currently achievable within its existing structures.

Emira will, after completion of the transactions, hold a 49.9% share of the ordinary equity in the businesses, and ONE a 50.1% stake. Both will be hands-on in deciding for the portfolio with a 50/50 asset management joint venture.

Optimising its core strength, ONE will be chiefly responsible for the Enyuka portfolio’s growth through acquisitions and developments, and together with Emira it will also undertake the asset management operations, within pre-set limits. Material and shareholder decisions need the approval of both parties. The new venture has first right on opportunities for lower LSM retail coming from both ONE and Emira.

The portfolio is expected to grow in critical mass within the next five years, which will open new opportunities. At this point, its future will be assessed, with options including, but not limited to, a separate listing or reincorporation into Emira. Emira always holds first right on the initial 15 properties it committed to the venture.

Geoff Jennett, CEO of Emira Property Fund, comments: “We’re excited about this strategic partnership which enables us to expand our retail assets. This relationship brings together two strong players, in the form of an investment property fund and a capital growth property fund, which creates a synergy with a shared vision for growth from lower LSM retail property. By venturing with ONE, we will enjoy added benefits and transactions. We will grow our lower LSM retail assets at an accelerated pace, retain exposure to our portfolio of retail assets, enjoy access to otherwise more remote transactions, and effectively use our assets to fund growth.”

Emira is a medium-cap diversified JSE-listed REIT that is invested in a quality balanced portfolio of office, retail and industrial properties. Its assets comprise 144 properties valued at R12.9 billion. Emira is also internationally diversified through its direct interest in ASX-listed GOZ valued at R940 million.

ONE is represented by Chairman Selwyn Smith and CEO Chris van Reenen. ONE Property Holdings is an unlisted capital growth fund with an existing retail property portfolio. The group currently has invested in a portfolio of 9 shopping centres, in excess of 120 000 square metres of retail space and an approximate value of R1.2 billion and a pipeline of a further R1 billion.



Latest


21 Sep 2020
Women are lagging in retirement savings and are debilitated by stress

In a recent study of their client base, Momentum Corporate revealed that almost half (41%) of the employees on the…

Women are lagging in retirement savings and are debilitated by stress

In a recent study of their client base, Momentum Corporate revealed that almost half (41%) of the employees on the FundsAtWork Umbrella Funds are women. With an almost 50/50 gender split across the client base, a one-size-fits-all approach to advice on employee benefits simply won’t cut it. This is according…

15 Sep 2020
Despite COVID-19, SA investors expect higher future returns

Even as COVID-19 halted the longest economic expansion on record and plunged the world into deep recession, South African investors…

Despite COVID-19, SA investors expect higher future returns

Even as COVID-19 halted the longest economic expansion on record and plunged the world into deep recession, South African investors expect to make an average annual total return of 12.67% – almost 2% higher than the global average predicted returns of 10.9%. This was revealed in the recently released Schroders’…

15 Sep 2020
Are cryptocurrencies here to stay?

The recent news that cryptocurrency giant, Digital Currency Group, has acquired cryptocurrency exchange company, Luno, has once again highlighted the…

Are cryptocurrencies here to stay?

The recent news that cryptocurrency giant, Digital Currency Group, has acquired cryptocurrency exchange company, Luno, has once again highlighted the rise of cryptocurrencies as a possible alternative to the current global financial system. According to Old Mutual Investment Group Director of Investments, Hywel George, Bitcoin, as well as a number…

10 Sep 2020
How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key…

How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key that dubbed America “The land of the free”, which stuck, to the unforgettable Mel Gibson monologue where an army of painted Scots were willing to trade their lives for the…


Top stories


10 Apr 2020
When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved…

When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved to be most enterprising in acclimatising to challenges as they arise.

13 Apr 2020
Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19…

Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19 environment and what form a global market recovery will take.

13 Apr 2020
SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The…

SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The draft Bill, together with its explanatory memorandum, provides clarity with regards the tax relief measures President Cyril Ramaphosa announced on 23 March.

11 Apr 2020
Finding investment opportunities among the many COVID-19 risks

With many countries around the world in lockdown as they try to contain the spread of the COVID-19 virus, the…

Finding investment opportunities among the many COVID-19 risks

With many countries around the world in lockdown as they try to contain the spread of the COVID-19 virus, the global economy is facing an unprecedented situation of balancing health against financial livelihoods.


Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za