Archives for February 2022

Redefine primed for sustained value creation after strategic reset

The past few months have been tumultuous and volatile for the local and global economies, but Redefine Properties (JSE: RDF) is well positioned for sustained value creation and growth.

Speaking during the pre-close for the half year ending 28 February 2022, CEO Andrew König says the company is firmly focused on executing its strategic priorities further in 2022. These include embedding a revised executive committee structure that drives more inclusion and diversity, on-boarding the R26.2 billion EPP portfolio, the introduction of a climate resilience framework and continuing to de-risk and refine the asset platform.

“Redefine is now primed for growth after we used the crisis to reset and refine every aspect of what we do. We have exited multiple geographies, optimised what we have and positioned every asset for the best possible sustainable capital and income growth prospects, while entrenching ESG into everything we do,” says König.

At a time when growth is constrained for many peers, Redefine is set to expand its asset base and footprint with the takeover of EPP. The transaction received the thumbs up from shareholders in January and the business will be fully integrated into Redefine during the second half of 2022.  With all conditions fulfilled, the delisting of EPP is set to take place on 8 March.

“This deal is transformative as it is Poland’s largest retail landlord and amounts to an estimated R7.2 billion in additional equity for Redefine and adds around R19.7 billion of total assets onto our balance sheet. This equates to about an additional 19.8% of shares in issue for Redefine. In the next six months we will be focusing on integrating EPP into our business in a sustainable way that maximises long-term value creation,” says König.

The strategic reset for Redefine has entailed a recent reconstitution of its executive committee.

“We are bringing more depth and balance to our executive committee (ExCo), incorporating a broader range of strategic skills to take us forward sustainably and effectively,” says König. New additions include the Company Secretary, Chief Sustainability Officer, Chief People and Chief Legal and Regulatory Officers.

“All the good work, restructuring and refining what we have is now bearing fruit and ensuring we are well positioned to benefit from the eventual upward cycle,” says König.

For the future, the focus turns to refining the asset platform further by recycling any remaining unproductive domestic assets. Internationally, numerous logistics developments will be pursued in Poland.

“I don’t think there will be fireworks from the SA economy for some time. We are more focused on the variables under our control,” adds König.

Redefine CFO, Ntobeko Nyawo says the integration of EPP will support Redefine’s medium-term growth outlook, while the company’s credit metrics remain “very stable”.

“We have maintained good liquidity thanks to disposals and strong cash generation. We are actually getting to a point where our recoveries are at 103% as we recover Covid-19 deferrals,” he says.

“The quality of earnings is therefore getting more sustainable, enhancing our ability to build and grow,” says Nyawo.

Nyawo says a loan to value close to 40% should be achieved in FY2022 based on disposals and earnings generated.

COO Leon Kok says while conditions locally remain challenging, there are some signs of recovery, especially in the retail space. He says turnover from retail tenants is now at around 105% of their pre-Covid-19 levels. “The recovery is largely being driven by homeware and essential services, which are now at about 110% of their 2019 levels.”

Online shopping has seen significant growth in reported sales, driven by the grocery and pharmacy sectors. However, Kok says all indications point to online and physical retail co-existing. “As a landlord we are looking at ways to embrace that and make sure offerings are more seamless, for instance by accommodating growing demand for click and collect and to also drive loyalty,” he says.

The office sector is under the most pressure, with vacancy rates increasing to 16% from 14% before – the highest it has ever been.

“I don’t see much in terms of improvement given that a lot of space is available and demand is low thanks to unemployment. However, the key is to make sure we retain the tenants we do have by making sure assets are relevant to their needs. For instance, we are focusing on improved health and safety and sustainability initiatives,” he says.

Kok says the office space is beginning to show some signs of life as workers gradually begin to return to physical offices, though in many cases still for only a few days a week.

“I think we might see that trend continue as many employers embrace flexible working arrangements.”

Kok says the industrial portfolio has remained defensive, with demand for logistics solutions driven principally by the retail growth. “Logistics remains very competitive, but participants are becoming more cost conscious, making cost management critically important,” he says.

Kok says Redefine’s diversity across the sectors remains a key benefit. “Over the years we have been actively recycling assets to improve the overall quality of our portfolio. In these uncertain times, I believe the old adage of a ‘flight to quality’ will hold true.”

Internationally, Redefine’s logistics pipeline in Poland continues to grow. This includes two projects of 96,917 square metres to gross leasable area (GLA) and further projects of 207,420 square metres under construction to be completed in the next six months

Another highlight over the past six months on the international front was the receipt of the proceeds from the sale of the remaining student accommodation property in Australia, during first week of February.

As part of its Moonshot strategy, Redefine is driving ESG as a key strategic thrust. Redefine is SA’s first REIT to become a signatory to the UN Global Compact.

“Redefine’s purpose is to create and manage spaces in a way that changes lives, which requires more than a business as usual approach: it requires an integrated approach to making strategic choices that will sustain value creation for all stakeholders through focussing on what matters most. We are firmly on track to doing just that,” concludes König.

Redefine’s half year results to 28 February 2022 will be announced on 16 May.

Waterfall City Precinct Centric Strategy Pays Off With Impressive Sales For The Mix

17 February 2022. Attacq Limited (Attacq) and joint venture partner D2E Properties (D2E) announced today that The Mix Waterfall, the latest high‐rise residential development within the iconic Waterfall precinct, achieved R250 million in sales since officially launching late July 2021. The Mix Waterfall is the most recent in a string of highly successful residential developments within Waterfall City that have firmly positioned Waterfall as the preferred lifestyle and business destination in the province.

Situated atop the iconic Mall of Africa, this 14‐storey, New York styled apartment offering has been tailored to speak to a homeowner seeking safe and secure apartment living with all the advantages of a sophisticated, bustling, urban experience. In addition, The Mix is the perfect fit for an emerging investor seeking capital appreciation in a high residential growth node.

Robin Magid, D2E CEO, says, “The way we engage with the communities around us has drastically changed in the past year. New trends in workweek flexibility and the growing demand for work‐life balance are all converging to inform home and investment decisions. As property developers, our job is to understand and answer these evolving needs by developing unique product offerings for the ever‐more discerning buyers of today.”

Developed from the ground up, Waterfall City is the largest ‘greenfield’ urban concept development in South Africa. Built on 2200‐hectares of land, Waterfall City has quickly become one of Gauteng’s leading business and lifestyle precincts, with blue‐chip firms such as Deloitte, PwC, Accenture, BMW, and Dischem calling it home.

Furthermore, for most companies, flexible work options has gone from being a consequence of the pandemic to a core benefit, informing where employees choose to live, work and play.

For those in close proximity, The Mix’s strategic placement near scenic walking and cycling routes make travelling to work a breeze. In addition, its proximity to parks, green spaces, and access to world‐class lifestyle amenities make it ideal for those in search of the optimal work‐life balance.

“Increasingly, buyers are considering quality of life enhancers such as convenient access to retail, entertainment and outdoor experiences as part of the non‐negotiables in their property decision‐making process,” continues Magid.

The Mix presents an affordable entry into Waterfall’s highly competitive property market with studio, one and two‐bedroom apartments available from R999 000 ‐ these units are selling fast. The Mix takes cosmopolitan living and amplifies it by drawing on the buzz of the city lifestyle. It offers residents a vibrant place where people can explore, engage, work, experience and dream big.

“As Attacq, we want to build an inclusive city, one that reflects the aspirations and potential of the people of South Africa. Key to this is the development of different asset classes tailored for different market segments. The Mix is suitable for a range of people from those who are starting their careers and moving out on their own, to those who are looking to downsize in a safe lock up and go environment. We recognised the opportunity in developing a residential offering that spoke to the long‐term aspirations of our community and provided a foothold into Waterfall’s competitive property market,” says Jackie van Niekerk Attacq, CEO.

Centralised living that is strategically positioned to cater to the needs of a diverse resident community is driving sales at The Mix. The proposition includes access to a fitness and wellness centre, co‐working spaces, amphitheatre, rooftop pool and cafe, and an array of retail facilities to enjoy within the Waterfall precinct. In addition, smart technologies will be integrated into the building, allowing residents to personalise their living experiences further.

The Mix is not just a development; it’s a community. It offers residents the opportunity to live a world‐class metropolitan lifestyle in a smart, safe and sustainable community‐connected environment.

Set for completion in early 2024, The Mix will comprise a limited 371 upmarket apartments.

Waterfall City Precinct Centric Strategy Pays off with Impressive Sales for The Mix

…Fully integrated residential development records R250 million in the first round of sales…

17 February 2022. Attacq Limited (Attacq) and joint venture partner D2E Properties (D2E) announced today that The Mix Waterfall, the latest high‐rise residential development within the iconic Waterfall precinct, achieved R250 million in sales since officially launching late July 2021. The Mix Waterfall is the most recent in a string of highly successful residential developments within Waterfall City that have firmly positioned Waterfall as the preferred lifestyle and business destination in the province.

Situated atop the iconic Mall of Africa, this 14‐storey, New York styled apartment offering has been tailored to speak to a homeowner seeking safe and secure apartment living with all the advantages of a sophisticated, bustling, urban experience. In addition, The Mix is the perfect fit for an emerging investor seeking capital appreciation in a high residential growth node.

Robin Magid, D2E CEO, says, “The way we engage with the communities around us has drastically changed in the past year. New trends in workweek flexibility and the growing demand for work‐life balance are all converging to inform home and investment decisions. As property developers, our job is to understand and answer these evolving needs by developing unique product offerings for the ever‐more discerning buyers of today.”

Developed from the ground up, Waterfall City is the largest ‘greenfield’ urban concept development in South Africa. Built on 2200‐hectares of land, Waterfall City has quickly become one of Gauteng’s leading business and lifestyle precincts, with blue‐chip firms such as Deloitte, PwC, Accenture, BMW, and Dischem calling it home.

Furthermore, for most companies, flexible work options has gone from being a consequence of the pandemic to a core benefit, informing where employees choose to live, work and play.

For those in close proximity, The Mix’s strategic placement near scenic walking and cycling routes make travelling to work a breeze. In addition, its proximity to parks, green spaces, and access to world‐class lifestyle amenities make it ideal for those in search of the optimal work‐life balance.

“Increasingly, buyers are considering quality of life enhancers such as convenient access to retail, entertainment and outdoor experiences as part of the non‐negotiables in their property decision‐making process,” continues Magid.

The Mix presents an affordable entry into Waterfall’s highly competitive property market with studio, one and two‐bedroom apartments available from R999 000 ‐ these units are selling fast. The Mix takes cosmopolitan living and amplifies it by drawing on the buzz of the city lifestyle. It offers residents a vibrant place where people can explore, engage, work, experience and dream big.

“As Attacq, we want to build an inclusive city, one that reflects the aspirations and potential of the people of South Africa. Key to this is the development of different asset classes tailored for different market segments. The Mix is suitable for a range of people from those who are starting their careers and moving out on their own, to those who are looking to downsize in a safe lock up and go environment. We recognised the opportunity in developing a residential offering that spoke to the long‐term aspirations of our community and provided a foothold into Waterfall’s competitive property market,” says Jackie van Niekerk Attacq, CEO.

Centralised living that is strategically positioned to cater to the needs of a diverse resident community is driving sales at The Mix. The proposition includes access to a fitness and wellness centre, co‐working spaces, amphitheatre, rooftop pool and cafe, and an array of retail facilities to enjoy within the Waterfall precinct. In addition, smart technologies will be integrated into the building, allowing residents to personalise their living experiences further.

The Mix is not just a development; it’s a community. It offers residents the opportunity to live a world‐class metropolitan lifestyle in a smart, safe and sustainable community‐connected environment.

Set for completion in early 2024, The Mix will comprise a limited 371 upmarket apartments.

Emira Declares 56.59cps Interim Dividend Off Robust Performance

Emira Property Fund (JSE: EMI) reported an interim dividend of 56.59 cents per share and distributable income of R329.2m for the six-month period to 31 December 2021. The cash-backed dividend is based on Emira’s strong balance sheet and liquidity position and is 8.8% higher than the prior year’s, part of which was deferred to the second half to mitigate market uncertainty. Emira deems this unnecessary now with the world being on a better path with more informed and balanced pandemic responses.

Geoff Jennett, CEO of Emira Property Fund, attributes the company’s solid performance to the safeguard built into its portfolio’s diversification across geographies and sectors, which has successfully mitigated risk from sectors under strain.

The Emira portfolio is structured for diversity and balanced to deliver stability and sustainability through different economic and property cycles. It is diversified across property sectors and internationally through a mix of directly-held assets and co-investments with partners who are experts in their respective fields.

Emira is invested in a quality, balanced portfolio of diverse retail, office, industrial and residential properties. It has 77 directly-held properties valued at R9.8bn in South Africa. A 14.8% portion of its asset base is international, made up of equity investments in 11 grocery-anchored open-air convenience shopping centres in the USA.

Jennett comments, “The diversified nature of Emira’s business model has proven robust and resilient. The portfolio is solid, and our strategies are paying off. Despite the continued pressure on local property fundamentals, particularly in the office sector, the diversified portfolio performed above expectations. Strong performance from our US investments amplified dividends. Emira will remain focused on consistently performing fundamentals with skill and excellence.”

South African direct investment portfolio

Emira has done well to reduce vacancies in its direct South African portfolio from 6.4% to 6.1%. Sound performance from the local industrial and retail portfolios countered the impacts of the stressed local office market.

Emira increased its tenant retention rate to 86%, extended its weighted average lease expiry to 2.8 years, and achieved monthly collections of a pleasing 102.4% of rent billed, including 100% of deferred rental from April, May and June 2020. Portfolio arrears again decreased to R62.7m and where necessary, potential credit losses have been appropriately provisioned.

During the six months, Emira gave its tenants, primarily hospitality and entertainment businesses, rental concessions of R1.8m – a significantly lower amount than the prior six months, indicating fewer restrictions. “It is still uncertain how Covid-19 will evolve, but we will remain cautious and continue to support our tenants limited by restrictions as we have done throughout the pandemic.”

Positive tenant trading continued in Emira’s resilient urban retail portfolio, which comprises 49% of total property asset value and is 96.4% occupied, and turnover increased by 2.5% for the 2021 calendar year on year.

Office properties, which are 30% of total property assets, are 81.8% occupied. Increasing Covid-19 vaccination rates bode well for the return to offices and the sector. However, the challenging environment in light of shifting working habits suggests office supply will outpace demand for some time. Emira continues to intensify its tenant attraction strategies.

Its industrial properties have a stable occupancy of 96.5% with a broad tenant base and comprise 19% of the overall Emira property portfolio. They are experiencing rising demand, albeit this is extremely sensitive to the ongoing power supply disruptions that challenge the sustainability of businesses in this sector.

Emira’s only direct residential asset is The Bolton, Rosebank, a co-investment with the Feenstra Group, targeting high-demand, mid to lower markets. Its occupancy levels dipped to 92.2% at end-December 2021 but have since returned to 95% and should increase further as Rosebank-based corporates return employees to their offices.

Emira acquired the multitenant Northpoint Industrial Park in Cape Town for R103m and took transfer of the property post-period on 20 January 2022. It disposed of the Epsom Downs Shopping Centre and Epping Warehouse after the interim close and currently has a further two assets, The Colony Shopping Centre and Universal Industrial Park, held for sale.

Emira understands that high-quality, enjoyable properties attract great tenants, so it regularly upgrades its assets to increase their competitiveness. Emira invested R64m in projects across its portfolio in the period to maintain and improve its directly-held assets. “Continual reinvestment into our portfolio ensures our properties remain relevant, attractive and in high demand,” notes Jennett.

Emira’s short-term focus for its local directly-held portfolio includes retaining and attracting tenants to contain and reduce vacancies in the office portfolio. It is also expediting projects for alternative energy, water harvesting and backup power.

South African specialised indirect investment partnerships

Emira grew its indirect exposure to residential rental property, with an increased 39.2% stake in specialist JSE-listed REIT Transcend Residential Property Fund. Transcend’s total property portfolio is valued at R2.3bn, and it contributed R14.7m to Emira’s distributable income in the period.

Through its 49.9% stake in Enyuka Property Fund, a dedicated rural and lower LSM retail property venture with One Property Holdings, Emira invests indirectly in 24 shopping centres valued at R1.7bn, which continued to perform well. Enyuka contributed R42.6m to Emira’s distributable income for the six months.

USA co-investment

Emira’s equity investments in the US now total R1.9bn (USD119.4m) in 11 grocery-anchored dominant value-oriented power centres with its partner, The Rainier Companies. These assets are in robust markets in the US. They are open-air environments with quality tenants focusing on the popular value retail segment providing essential goods and services, especially with grocer anchors, and are geared towards communities.

This high-quality asset base is underpinned by sound property fundamentals, and they delivered a good performance to contribute R89.1m to Emira’s distributable income for the period.

“Our US investment strategy proved its value as a buffer against South Africa’s constrained economy with its US$-denominated returns driven by supportive fundamentals in a more resilient environment. We will continue to explore acquisition opportunities that match our selective criteria,” says Jennett.

The US economy continued to recover and grow, with strong annualised GDP growth of 6.9% for the final quarter of 2021, elevating GDP growth materially higher than pre-COVID-19 levels and driving household consumption up and unemployment down. The environment supports Emira’s value-oriented retail investment, even with more moderate economic growth in 2022.

Leasing momentum and activity was solid, and vacancies in the US portfolio improved from 7.1% to 5.9% over the six months. The portfolio has a weighted average lease expiry of 5.5 years. The partnership continued to unlock value from Emira’s US investment with development, refurbishment and other asset management interventions.

Funding and treasury management

The value of Emira’s local properties was reduced by a net 0.2%, factoring in a fair value increase of 0.5% and capital expenditure of R64m for the six months. Its net asset value per share increased 1.5% to 1,540cps.

Emira’s loan-to-value (LTV) ratio showed a 0.9% movement to 41.8%, ensuring ample debt headroom with a more than adequate 2.8-times interest cover ratio.

The REIT continues to benefit from diversified funding sources and has facilities across all major South African banks, and access to debt capital markets. It has access to undrawn facilities of R615m and cash on hand of R103.8m. Since May 2021, Global Credit Rating Company has given Emira’s corporate long-term credit rating of A(ZA) and short-term rating of A1(ZA), with a negative outlook.

Environmental, social and governance (ESG)

Projects focused on making Emira’s properties more sustainable remain a priority, particularly those that improve energy efficiency and water conservation. Utilities supply disruptions and continued above-inflation increases of rates, taxes and utilities costs pose major risks for the property sector.

During the period, it began expanding its photovoltaic (PV) solar farm at Wonderpark Shopping Centre in Pretoria to increase output more than three-fold from 1.2MWp to 3.8MWp. It also commenced a new PV farm in its quest to achieve the net-zero carbon operation of its Knightsbridge Office Park in Johannesburg.

As a responsible corporate citizen committed to genuine transformation in South Africa, Emira maintained its Level 2 B-BBEE Contributor rating with verified effective black ownership of 71.15%.

“We are dedicated to finding material ways to bolster Emira’s effect on local socio-economic development and the environment,” says Jennett.

Conclusion

Jennett concludes, “Emira has done well to endure and hold firm through uncertain times, continue our track record of consistently delivering on strategies and come through challenges stronger. We can do this because we have a distinct purpose and clear direction. Most of our assets are in South Africa, where the local macroeconomy remains concerning and needs political reform to improve meaningfully. Our tenants need a growing economy to sustain their businesses and thrive. In contrast, our assets in the USA are enjoying the benefit of a growing economy, which shields Emira and validates our diversified investment approach as a good risk mitigation strategy. We are well positioned for the future and expect to continue to perform for our stakeholders and pay shareholders cash-backed dividends.”

Emira declares 52cps half-year dividend off robust portfolio structure, rental collections and liquidity

Emira Property Fund (JSE: EMI) reported a half-year dividend of 52 cents per share and distributable income of R333.7m for the six-month interim period to 31 December 2020.

Emira is invested in a quality, balanced portfolio of diverse office, retail, industrial and residential properties. It has 78 directly-held properties valued at R9.9bn in South Africa and equity investments in 10 grocery-anchored open-air convenience shopping centres in the USA. Its portfolio is diversified across property sectors and internationally in a combination of directly-held assets and co-investments with partners who are experts in their respective fields. The Emira portfolio is structured for adaptability to deliver stability and sustainability through different economic and property cycles.

Geoff Jennett, CEO of Emira Property Fund, comments, “In the context of the current uncertain and challenging operating environment, these results reflect the robustness of Emira’s business, portfolio and processes. A key feature of a REIT investment is its cash-backed income component and at Emira we believe that if we can reasonably pay dividends while still protecting our business’s longevity, we should. We are confident that our decision to pay an interim dividend, albeit at suitably conservative levels, is the right one for our shareholders.”

Emira also continued to look after the interests of its tenants, staff, service providers, portfolio of assets, co-investors, funders, communities, and environment. “It is our actions in all these areas that come together to form a sustainable business,” notes Jennett.

Continuing efforts to ensure as many of its tenants as possible survive the COVID-19 pandemic lockdowns’ adverse effects, Emira provided support to 363 tenants with a further R17.8m in permanent rental remissions during the six months. This relief supported some high-risk tenants including gyms, restaurants and entertainment venues. Emira expects to consider further rental concessions in the second half of its financial year, on a limited case-by-case basis.

During the six months from July to December 2020, the effects of the pandemic and its various lockdowns in South Africa continued to batter the local economy, business confidence and household spending placing massive pressure on all key property metrics.

While Emira’s overall direct South African portfolio vacancies edged up from 4.1% to 5.9%, they remained low relative to national averages. Emira’s only directly held residential property, The Bolton, increased its occupancy from 80.9% at the start of the period to 97.5% at the close.

Emira enjoyed a pleasing improvement in rental collections, with collections as a percentage of billings at 99% for the six months ended 31 December 2020. The collection of deferred rentals, in particular, was better than anticipated at 80%.

Emira achieved impressive tenant retention of 83% by gross lettable area (GLA), the largest renewal being the South African Local Government Association at Menlyn Corporate Park in Pretoria, for over 7,000sqm. In addition, it concluded some new leases during the period, the largest being iMvula Healthcare Logistics in 3,500sqm at 1 Medical Road in Johannesburg.

“Overall, the outlook remains challenging and uncertain with further increases in vacancies and reversions still ahead for the property sector. More than ever before, Emira is focusing on maintaining its occupancy levels by retaining existing tenants. Close tenant relationships promote the understanding and agility to deliver appropriate, good quality, well-priced space, which benefits tenant retention and attraction. The manner in which the Emira team has supported and collaborated with our tenants through the pandemic has strengthened relationships, positioning them well for the future, and I commend our people and partners for this achievement.”

As part of its strategic asset management, Emira has an ongoing capital recycling programme and, under this focus area, Emira disposed of a Gauteng building to its tenant, Steiner Services. The R34.5m sale price realised a 17% premium to book value and an exit yield of 8%, supporting Emira’s realistic property valuations. It has two assets valued at R171.3m held for sale.

Emira continued to maintain and improve its properties while scrutinising capital expenditure. Fortunately, consistent investment into the portfolio over the years has ensured that its portfolio remains relevant and attractive on the whole. Elevating energy efficiency and water conservation remains a focus area of its capital improvements. Its photovoltaic (PV) solar programme’s positive environmental and operational impacts were further enhanced with two new installations completed and one commenced during the period.

“We continue to expedite alternative energy supply, water harvesting and back-up power projects in light of utilities supply disruption and the overinflated increases of utilities, rates and taxes costs,” notes Jennett. Emira kept a keen focus on containing costs. Even so, its property expenses increased 5.9% during the six months.

Emira’s equity-accounted investments – Transcend Residential Property Fund, Enyuka Property and its USA investments – delivered R118.3m of distributable income for the half-year.

A 34.9% stake in specialist JSE Main Board listed REIT Transcend gives Emira indirect exposure to the residential rental property sector. Transcend’s total property portfolio is valued at R2.5bn, and Emira received R23.4m of distributable income from Transcend.

Through Enyuka, a dedicated rural retail property venture with One Property Holdings, Emira invests in 24 lower-LSM shopping centres valued at R1.7bn. Notwithstanding the economic impacts felt during the six months, the rural retail sector outperformed all other retail sectors, resulting in lower-than-expected rental concessions granted. Emira received R41.9m of income from Enyuka via interest on its shareholder loan, as well as an asset management fee of R2.3m.

On the international front, Emira invests in grocery-anchored dominant value-orientated convenience retail centres in robust markets in the US with the Rainier Companies, and Emira’s share had a carrying value of R1.4bn at the close of the period. The type of property in which Emira invests in the US performed better than enclosed malls and lesser quality properties in the context of COVID-19. They are geared towards communities, provide essential goods and services especially with grocer anchors, focus on the popular value retail segment, have quality tenants, and offer open-air environments where people feel safe. The period was defined by reduced COVID-19 restrictions, more government stimulus and relief, fewer tenant requests for rental relief, and a high 100.4% collection of all rentals billed. Distinguished by sound property fundamentals and a high-quality tenant base, the portfolio has a weighted average lease expiry of 5.9 years. With limited leases up for renewal, a positive rental reversion of 1.5% was achieved, but, as expected, vacancies increased from 5.2% to 8.5%. Vacancies should reduce by year-end with deals that focus on high credit-quality tenants. Distributable income received by Emira from its investments in the US was R72.7m.

Emira reduced its direct portfolio value by a carefully considered 3.6% for the period and, in accordance and taking into account a reduced derivative liability number, its net asset value (NAV) decreased by the same percentage.

The REIT continues to benefit from diversified sources of funding and has facilities across all major South African banks. Emira met all commitments to its funders and reduced its finance costs by lowering its debt levels and as a result of lower interest rates. It reduced its loan-to-value (LTV) ratio slightly from 43% to 42.5%, as it moves closer to its long-term LTV target of below 40%. Emira closed the interim period with a group interest cover ratio (ICR) of 3-times. Global Credit Rating Company affirmed Emira’s corporate long-term credit rating of A(ZA) and short-term rating of A1(ZA) with a negative outlook, in September 2020. At 31 December 2020 it had access to undrawn facilities of R720m and cash on hand of R122.6m, which adequately covers short-term commitments.

Continuing its good business journey, Emira made a significant improvement in its B-BBEE rating, moving from a level 5 to a level 2 contributor, with a verified effective 76.68% black ownership. The improvement furthers Emira’s positive role in the economy and society.

At Emira, our numbers show that we are consistently doing all the basics, and doing them well, even in an exceedingly difficult environment. We are encouraged by the possibility of an ongoing low-interest-rate environment and the potential for economic recovery increasing towards the end of 2021 provided that the rollout of vaccines goes ahead successfully. Emira will continue to protect and generate value for our stakeholders with a robust balance sheet, well-funded and sustainable operations, and a diversified, balanced portfolio of quality properties,” Jennett concludes.

Given the current uncertainty, Emira’s reiterated it would not provide earnings and distribution guidance until such guidance is highly probable. However, it reaffirmed its management KPI target for distributable earnings of 119.7 cents per share for the year to 30 June 2021.

Ericsson To Leverage Waterfall City Location As It Positions For Future Growth

Ericsson, the Swedish telecommunications giant, is the latest global tech company to move to Waterfall. Previously located just a stone’s throw away on Woodmead drive, Ericsson chose to relocate to Waterfall to become part of this award-winning hub of collaboration, innovation, sustainability and best in class infrastructure.

Founded over 140 years ago and one of the first pioneers of the modern telephone, today Ericsson is one of the world’s leading providers of Information and Communication Technology (ICT). The company’s portfolio spans Networks, Digital Services, Managed Services, and Emerging Business, and it specialises in helping clients increase operational efficiency and uncover new revenue streams.

In 2020 Ericsson, announced its growth plans for Africa, guided by the premise that access to communications is a basic human need. According to Ericsson’s Mobility Report, by 2025, Sub-Saharan Africa mobile broadband subscriptions will increase to reach around 70% of mobile subscriptions, with increased 4G/5G coverage and uptake being the main driver. Critical to this shift are a young and growing population and the growing availability of lower-priced smart and feature phones.

“The move to Waterfall aligns with our global strategy to enable the full value of connectivity by creating game-changing technology and services that are easy to use, adopt, and scale. Furthermore, with African economies positioned for rapid growth in coming years, our new office places us in a strategic position to nurture young African talent as well as expand our reach and footprint into the continent,” says Nicolas Blixell, Vice President, Head of Global Customer Unit at Ericsson Middle East and Africa.

A smart and ultra-modern office precinct, the office park incorporates innovative and sustainable elements such as a state-of-the-art water and irrigation system, variable refrigerant volume (VRV) condensers, pedestrian walkways, and shaded canted roofs.

“Following the two years of uncertainty brought on by the Covid pandemic, it was important to us to carefully make the transition back to more of an in-office model, while not losing the efficiencies and flexibility we’ve all become accustomed to with remote working. Attacq’s vision of creating collaboration hubs that encourage connectedness, innovation and environmental stewardship aligned well with our commitment to creating a world where limitless connectivity improves lives, redefines business and pioneers a sustainable future,” concludes Blixell.

Corporate Campus is strategically located close to the Mall of Africa, a Netcare hospital, a Curro School, a number of the other A-grade office developments, and various mixed- use and residential developments. The office park also features an onsite restaurant, two wifi-enabled 50-seater conference facilities, cycling facilities and showers.

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