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

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.

Emirawill 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. 


  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 26 Apr 2018
      Banks are showing an increased appetite to lend according to first quarter (Q1 2018) property statistics recently released by ooba, South Africa’s leading home loan originator.
    • 26 Apr 2018
      Moving into a new home comes with such a long list of expenses that one often searches for ways to cut back on costs. Hiring a professional moving company is one of the first expenses that many buyers tend to try and work around, especially now that purse strings are even tighter owing to the VAT increase that took effect this month.
    • 26 Apr 2018
      Investors looking to buy a property offshore can potentially recoup their money faster through short-term rentals than traditional letting options, all the while earning income in a foreign currency.
    • 25 Apr 2018
      Whether you are a seasoned seller or new to the game, putting your home on the market is an exciting moment. To ensure you get the best possible outcome these 8 value adding additions to your home is worth the effort.
    • 25 Apr 2018
      After four years of unprecedented growth fuelled by semigration, the Southern suburbs market faced a number of challenges in 2017, including dwindling affordability and a marked slowing in house price growth with many sellers forced to lower their prices in order to secure a sale.
    • 25 Apr 2018
      Mall of Africa, is celebrating its second year of sensational success. This splendid super-regional shopping centre first opened on 28 April 2016, and has grown in popularity, performance and profile since then.
    • 25 Apr 2018
      While the role of trustee in a sectional title scheme is a voluntary and unpaid position, it is one that comes with huge responsibility. Trustees have a fiduciary duty towards their scheme, says Chinelle Hewit, Operations Manager at sectional title finance company Propell.
    • 24 Apr 2018
      The thing about the property ladder is that at some point in our lives we all have reason to want to climb a rung or two higher. Sometimes, it’s because we’ve outgrown our previous dream home, or because we want to be in a better neighbourhood that’s closer to work or to schools. Sometimes it’s because our circumstances have changed, and we’re taking care of elderly parents or relatives. Sometimes, it’s just because we want a property that reflects the financial status our hard work has won.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us