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Octodec, donated 500 Dignity Packs to Unchain Our Children

August 23, 2022 by reit_sthe

Octodec, sister company of City Property, donated 500 Dignity Packs to Unchain Our Children

Watching a crane at City Property Pretoria lowering 500 dignity packs for boys, girls, and women into Unchain Our Children’s trailer Tuesday morning, was watching many prayers being answered in front of our eyes. Top quality personal hygiene items, soft toys, sweeties, towels, and facecloths were among the carefully selected items were packed by the staff for distribution among abused children and survivors of gender-based violence.

As statistics are skyrocketing and cases of child abuse, neglect, abandonment, exploitation, and trafficking are being reported daily, Octodec dignity pack brings joy to these survivors as they realize someone is caring enough to have blessed them with a beautiful gift of something special just for them.

Wayne van Onselen, Founder and Executive Director Unchain Our Children was invited to meet with the Managing Director of Octodec, Mr Jeffrey Wapnick. Mr Wapnick has a quest for inner city revival and rejuvenation. His management team shared with us their Change Our City For Good campaign and every story was alive with passion, enthusiasm and dedication describing their projects focussing on the upliftment of the vulnerable in our society.

“Make it Happen”, is the motto of Mr Wapnick. We were privilege to have experienced not only his dynamic business demeanour but also his sincerity and dedication to give back to the community. An accomplished entrepreneur, his vision for mid-city make-overs exceeds all expectations.

With an impressive portfolio of commercial-, industrial-, retail-, office and apartment properties in Pretoria and Johannesburg, Octodec is celebrating more than 50 years of providing beautiful spaces for living life.

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Emira grows dividends off a base of consistent strategic delivery

August 17, 2022 by reit_sthe

Emira Property Fund (JSE: EMI) today announced growth in distributable earnings of 3.8% and a 1.0% increase in its cash-backed dividend of 119.79cps for the year to 30 June 2022. Its net asset value per share increased 7.3% during the financial year to 1,628.60cps.

Geoff Jennett, CEO of Emira Property Fund, attributes the strong performance and improved metrics to consistent strategic delivery and incremental steps taken to achieve the best value from investments.

Jennett comments, “Emira has done well to increase dividends and, in the consistent Emira way, continue the strategic direction of the fund with active asset management, focusing on basic property fundamentals and performing them with excellence. In a challenging environment, distinguished by the close correlation between the South African economy and real estate sector performance, it is pleasing to see how Emira’s assets have withstood the pressure and how well aligned our business is for the future.”

Emira’s diversified portfolio is balanced to deliver stability and sustainability through different cycles. It is a mix of 74 directly-held retail, office, industrial and residential assets worth R9.8bn and indirectly-held investments with specialist co-investors, including the JSE-listed specialist residential REIT Transcend Property Fund and retail property venture Enyuka Property Fund. 18% of its asset base is made up of equity investments in 12 grocery-anchored open-air convenience shopping centres in the stable economy of the USA, which provide a buffer to the low-growth domestic environment.

Locally, Emira’s portfolio is most exposed to the retail sector by value and the industrial sector by number of assets. Steady performance from these two portfolios countered the strained local office market. Over several years, Emira has steadily reduced office exposure to 30% of its directly held portfolio value. Emira’s only direct residential asset is The Bolton in Gauteng, where occupancies rose to 98.9% as Rosebank-based corporates returned employees to their offices.

Emira improved its direct portfolio vacancy rate by 1.1% to 5.3%, signifying effective leasing strategies. It achieved a tenant retention rate of 83%, a weighted average lease expiry of 2.7 years and achieved pleasing monthly collections of 100.2% of rent billed. Reflecting the excellent credit quality of Emira’s tenant base, portfolio arrears decreased further to R47.6m. Estimated credit losses have been appropriately provisioned. Emira continued to support its tenants that remained subject to pandemic restrictions, mainly hospitality and entertainment businesses, however, with the easing of restrictions, rental concessions were R1.9m – significantly lower than the prior year’s R33.6m.
The like-for-like value of Emira’s direct South African properties increased by 1.8% during the year and, factoring in capital expenditure of R133.1m, there was a net increase of 0.4%. Emira acquired the multi-tenant Northpoint Industrial Park in Cape Town for R103m and de-risked its portfolio by disposing of five assets during the year, with a further one held for sale. It also focused inwardly and invested in maintaining and improving its assets to increase their attractiveness and competitiveness, including solar energy, water harvesting and backup power projects.

These projects support Emira’s sustainability considerations, a key component of its operations and approach to creating long-term value. Prioritising carbon emissions reductions and partnering to achieve this, Emira achieved a Level B for its eleventh consecutive annual CDP submission.

The REIT increased renewable energy generation at its local properties through energy management and efficiency initiatives. Also, Emira advanced its responsible water and waste management and established natural habitats and indigenous landscaping at its properties to minimise impacts on the natural environment. These initiatives provide Emira and its tenants with resource security and, to some extent, some protection against the continued high increases in utility costs and general deterioration of municipal infrastructure, which are major concerns for business generally and the property sector specifically. As a responsible corporate citizen devoted to genuine transformation in South Africa, Emira remained a Level 2 B-BBEE Contributor.

Emira grew its indirect exposure to residential rental property by increasing its stake in Transcend to 40.69%. Transcend, which has a R2.4bn portfolio, added R32.7m to Emira’s distributable income. Post year end, Emira confirmed it intends to make a general cash offer for all shares in Transcend it does not already own and already has irrevocable support from 16.7% of Transcend shareholders.

Through its 49.9% stake in Enyuka, a retail property venture with One Property Holdings, Emira invests indirectly in shopping centres valued at R1.7bn. Enyuka contributed R89.5m to Emira’s distributable income. Emira has agreed to sell its stake in Enyuka to One for R638,6m, which Emira will use to continue recycling capital. The transaction is expected to be transferred by December 2022.

For its equity investments in the US, Emira invests with its US partner The Rainier Companies. This year, it grew its international assets to 12 grocery-anchored dominant value-oriented power centres that now total R2.4bn (USD148.6m). The US economic environment supports Emira’s value-oriented retail investment, even with rising inflation and interest rates in the broader market. Its open-air centres have quality tenants focusing on the popular value retail segment and providing essential goods and services, especially with grocer anchors. These high-quality value-orientated assets in robust markets enjoy sound property fundamentals and delivered good performance to add R176.7m to Emira’s distributable income.

Emira’s loan-to-value ratio moved slightly lower to 40.5%, with ample debt headroom and a more than adequate 2.8x interest cover ratio. In May 2022, GCR Ratings confirmed Emira’s corporate long-term credit rating of A(ZA) and short-term rating of A1(ZA) and revised its outlook from negative to stable. 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 R869m, including R500m allocated to the Transcend offer, and cash on hand of R66.7m.

Given the enduring market uncertainty, Emira chooses not to provide earnings and distribution guidance but instead noted its executive directors’ KPI for distributable earnings is 129.46cps for FY23.

Jennett concludes, “After six years of diligent repositioning and capital recycling into strategic investments that improve our portfolio quality and diversification, all our metrics are well aligned and pointing in the right direction. We are in a strong position to manage for the future.”

The post Emira grows dividends off a base of consistent strategic delivery appeared first on Emira Property Fund.

Growthpoint invests R50 million in solar-charged battery system to power Paarl Mall

August 16, 2022 by reit_sthe

Growthpoint Properties (JSE: GRT) is piloting a 4.5MW battery system at Paarl Mall in the Western Cape to store electricity for its continuous, cost-efficient power supply. This is the largest commercial battery installation in South Africa to date, and it will be partly charged by Paarl Mall’s new rooftop solar PV plant, extending the positive impacts of renewable sun-powered energy around the clock.

Growthpoint’s R50 million investment in the system continues its push towards carbon neutrality by 2050. Providing sustainable, financially-viable energy solutions to clients, and powering its buildings with clean, renewable sources are key for Growthpoint’s ESG targets. Over more than a decade, Growthpoint has installed 13.5MW of solar power across its SA portfolio, but this is the first time it is integrating a large battery system.

“Battery technology has come a long way in recent years. Previously prohibitively expensive, batteries have become increasingly affordable, especially considering rapidly rising electricity prices and our imperative to help prevent costly business disruptions for our clients caused by load-shedding,” says Grahame Cruickshanks, Growthpoint Head of Sustainability and Utilities.

Growthpoint’s 60,000sqm Paarl Mall is an ideal pilot site to prove how a sizeable battery system linked to a solar plant improves the environmental performance of large shopping centres and lowers the cost of energy.

Paarl Mall recently undertook an energy-efficient H-VAC upgrade to lower its electricity consumption. Despite substantial energy savings, the centre’s electricity bill was set to hike a hefty R5 million a year because the mall’s decreased load factor meant it only qualified for a more expensive municipal electricity tariff. In light of this, Growthpoint needed to tailor a new solution to provide green energy to the entire mall while ensuring a consistent power supply and optimising energy costs.

For the ground-breaking project, Growthpoint’s retail and sustainability teams partnered with energy engineers Terra Firma Solutions and Anderson Consulting Engineers. The Drakenstein Municipality adopted a proactive approach by providing the mall with the time needed to find the right energy-saving solution.

Boasting more than 5,000 PV panels with a direct current capacity of 2.5 megawatts-peak (MWp) and generating 3,601,500 kilowatt hours (KWh) of energy annually, Paarl Mall’s new rooftop solar plant will span a massive 25,000sqm. Its sealed-container 4.5MW battery bank battery system, comprising three 20-foot containers with lithium-ion batteries, will be charged from both the mall’s solar power and the grid.

The system’s operation, production and yield will be monitored and managed offsite with the aim of optimal energy arbitrage, a technique where power is bought during off-peak hours, stored and used during peak hours. This enables peak-shaving that flattens the electrical load profile of the building. The system has also been designed to accommodate some of the mall’s demand during load shedding.

“Proving the concept and technology would provide a big push in the right direction towards our carbon reduction targets. We are hoping to onboard more malls with this solution to future-proof our assets, protect them from load-shedding and optimise energy costs,” remarks Neil Schloss, Growthpoint’s Head of Asset Management: Retail.

“With our clean, uninterrupted energy initiative at Paarl Mall, we are striving to create a win-win for the mall, its community, the country and the planet. It is all about coming together and finding cooperative solutions for shared and sustainable long-term gains,” adds Schloss.

While the retail sector is best suited to this type of grid-tied integrated solar and battery system, Growthpoint sees potential value in using it at suitable properties across all its assets.

“We want to push the boundaries on the range of energy solutions available for our properties and our clients, expand our mix of energy sources and storage and boost the supply of renewables to our assets as part of our proactive energy management,” says Cruickshanks.

Growthpoint would, in principle, be willing to sell excess solar energy it produces at Paarl Mall, but more clarity is needed on local wheeling arrangements before this option can be given serious consideration. For now, it is focused on bringing affordable clean energy to the centre, ensuring continuity of operations and providing significant relief to the national power grid.

The project’s four-month installation will begin in August 2022 and the system is expected to be commissioned in early December. It should be fully operational by mid-December.

QUICK FACTS:

Paarl Mall’s solar panels would cover 3.5 football fields
The solar and battery technology will reduce Paarl Mall’s carbon emissions by 3,601,500 tonnes of CO2 annually, which is the equivalent of:
- removing 2,800 passenger vehicles from our roads each year,
- 22,665,736,507,748km travelled in an average diesel car, or
- 58,964 trips to the moon.
The system’s battery life is 15 years.
The total installed renewable energy capacity Growthpoint plans to install by 2026 will save 161,221.76 tonnes in carbon emissions, equivalent to 25,795 trees being planted.

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Emira’s Springfield Centre in Durban ‘rises from the ashes’ with a relaunch

August 15, 2022 by reit_sthe

Emira Property Fund’s Springfield Retail Centre in Durban has relaunched, a year after it was damaged by arson in the widespread devastation of July 2021, where looters made their way into the centre ransacking most of its stores.

The mayhem culminated in an arson attack the next day, with fires starting at Mambo’s Plastic Warehouse and burning along a line of shops, including the centre’s electrical room.

The rebuilding, restoring, and refreshing of the 17 300m² community-focused lifestyle centre began immediately, with the assistance of the community. Most of the centre was reinstated and trading within a few weeks of the damage occurring, and Emira had the maximum amount of SASRIA cover in place to adequately cover any damages and loss of trading.

As part of reinstating the centre, Emira took the opportunity to refresh and refine its tenant mix and reconfigure space to improve the overall shopping experience.

“We considered general shopping trends, monitored consumer patterns in Springfield Retail Centre’s catchment area and observed the centre’s tenant performance in order to identify improvements for its offering and match them with the type of retailers that would work best for the refreshed centre and its shoppers,” explains Ulana van Biljon, Emira COO.

This included improving the centre’s tenant mix and reconfiguring an underutilised part of the property to create floor space for Coricraft’s new home and décor showroom. The Coricraft concept store opened in April this year, with a new layout and design unique to Springfield Retail Centre. Similarly, Ted’s Home Store also took the opportunity to upgrade its 1 000m²-plus store at Springfield Retail Centre to create an all-new showroom, which opened in May 2022. The combined impact has created one of the strongest home and décor retail offerings in the region.

Finally, most of the restoration work has been completed and Springfield Retail Centre is already trading fully with only Westpack still to open at the end of August 2022. The open-air shopping experience has a refreshed array of tenants, from fashion and home furnishings to babies, tech and more.

The post Emira’s Springfield Centre in Durban ‘rises from the ashes’ with a relaunch appeared first on Emira Property Fund.

Emira’s Springfield Retail Centre relaunches a year after it is burned by looters

August 15, 2022 by reit_sthe

Emira Property Fund (JSE: EMI) has relaunched its Springfield Retail Centre in Durban, KwaZulu-Natal, a year after the centre was damaged by arson in the widespread looting and devastation of July 2021.

Starting back on 12 July 2021, looters made their way into the centre and ransacked most of its stores. The mayhem culminated in an arson attack the next day, with fires starting at Mambo’s Plastics Warehouse and burning along a line of shops, including the centre’s electrical room.

The rebuilding, restoring and refreshing of the 17,300sqm community-focused lifestyle centre began immediately, with the community coming out to help. Most of the centre was reinstated and trading within a few weeks of the damage occurring, and Emira had the maximum amount of SASRIA cover in place to adequately cover any damages and loss of trading.

Fortunately, only one wing of the centre had structural damage, and around 30% of Block A was cordoned off safely without affecting trade in the rest of the centre, including anchors Food Lovers’ Market, HiFi Corp and Baby City. While work continued on the fire-damaged section, a concerted communications effort let shoppers know the property was open and which stores were trading. As part of reinstating the centre, Emira took the opportunity to refresh and refine its tenant mix and reconfigure space to improve the overall shopping experience.

This included improving the centre’s tenant mix and reconfiguring an underutilised part of the property to create floor space for Coricraft’s new home and decor showroom. The Coricraft concept store opened in April this year, with a new layout and design unique to Springfield Retail Centre. Similarly, Ted’s Home Store also took the opportunity to upgrade its 1,000sqm-plus store at Springfield Retail Centre to create an all-new showroom, which opened in May 2022. The combined impact has created one of the strongest home and décor retail offerings in the region.

The effectiveness of its strategic re-leasing is evident in the return of customers to Springfield Retail Centre, notwithstanding current economic pressures.

Emira applies its strategic leasing philosophy to all its shopping centres, constantly gathering data to keep track of macro and local market trends, analysing how different tenants are performing and considering this in relation to their position and adjacencies within a centre.

“Using these insights, we aim to place the best retailer into an optimally-sized store in the ideal location within a centre in order to benefit its customers, trading, neighbouring stores, the mall’s overall flow and its capacity to attract buying power,” says van Biljon.

She adds, “Signing a make-do lease to fill a vacancy without considering these factors is often a short term and potentially very costly exercise. By emphasising what our customers want, our strategic leasing supports excellent trading densities for tenants and the good performance of our retail assets.”

Strategic leasing for Emira is definitely not a one-size-fits-all process. It recently completed another such project for a very different asset – the large 91,000sqm regional Wonderpark Shopping Centre in Pretoria, Gauteng.

By refreshing the retail mix, Emira was able to find ways to meet Wonderpark Shopping Centre’s customers’ latest needs in response to the emergence of quality and value as more important factors in their purchasing patterns. New tenants were added to the retail mix, while several existing tenants were relocated in the centre and right-sized. This included Clicks, Gelmar, The Bed Shop, Russells, The Hub, Mr Price Home, Fabiani, Code, Kingsmead Shoes, Ackerman’s Woman, Pep Cell and more.

The result: an increase in spend-per-head, positive turnover growth, better-than-industry footfall averages, and greater shopper cross-pollination. Put simply, the project has resulted in better trading for Wonderpark retailers and the centre, and it has attracted new tenants to this market.

“Although Springfield Retail Park and Wonderpark Shopping Centre are vastly different in size and market, they both meet Emira’s retail portfolio goals of offering South African consumers great convenience shopping experiences that are tailored to their specific shopper community,” says van Biljon.

Emira has total assets of R12.6bn, including 77 directly-held properties valued at R9.8bn in South Africa. A 17% portion of its total asset base is international, made up of equity investments in 12 grocery-anchored open-air convenience shopping centres in the USA

Emira proposes acquiring Transcend’s entire share issue with a firm offer

August 15, 2022 by reit_sthe

Emira Property Fund’s Springfield Retail Centre in Durban has relaunched, a year after it was damaged by arson in the widespread devastation of July 2021, where looters made their way into the centre ransacking most of its stores.

Emira Property Fund (JSE: EMI) has proposed a general offer to Transcend Residential Property Fund shareholders to acquire all the shares in Transcend that Emira doesn’t already own.

Transcend is a specialist REIT with a residential-only property portfolio, which listed on the JSE AltX in 2016 and migrated to the main board in 2020. In 2018, Emira secured a strategic minority stake in Transcend to expand its investment in residential property and enhance portfolio diversification.

Since its initial investment in Transcend, Emira has played a pivotal and almost exclusive role in providing capital to fund its growth. In the process, Emira has increased its equity in Transcend. Most recently, Emira was one of only a few legacy shareholders to follow their rights in Transcend’s December 2021 R156m equity raise via an underwritten vendor placement. This investment, together with a small stake acquired in an off-market trade from a major financial institution, increased Emira’s stake in Transcend to a pre-offer level of 40.69%.

However, since its listing, Transcend’s ability to grow has stalled with significant changes in the nature and dynamics of equity capital markets, particularly in South Africa. It is now restricted to issuing new equity at a substantial discount to net asset value (NAV), thereby diluting existing shareholders.

Transcend’s ability to raise equity capital stuttered in December 2021, as highlighted by its R156m capital raising where Emira was required to subscribe for an amount greater than its proportionate share. Emira has stated that it will not support the issue of further equity at a discount to NAV. Thus, Transcend’s listing, originally intended to access affordable equity capital on an efficient basis, no longer presents it with a viable or conducive means to raise significant equity. In addition, Transcend already has a relatively high loan-to-value ratio for a REIT of 44.9%. These factors severely constrain its ability to grow by adding residential assets.

Transcend also faces fundamental obstacles deterring a broader universe of institutional investors. It is a highly illiquid small-cap with less than 0.9% of its issued shares trading over the last three months. Further, its external management company structure is unpopular within the investment community.

“We firmly believe that operating Transcend in the unlisted environment is the only realistic alternative for the future, given its limitations. Controlling it as an Emira subsidiary makes sense from a cost, access to capital and investor interest perspective,” notes Geoff Jennett, CEO of Emira.

Jennett adds, “We see no benefit to maintaining two listed entry points into Transcend’s assets, which we strongly believe would be better served in an Emira-controlled subsidiary where we would be able to support the assets and prospects of Transcend without having to further increase its gearing or raising more equity as a discount to NAV. Emira is not supportive of Transcend issuing new equity capital to the extent that it results in a dilution of either Emira’s shareholding in Transcend or its NAV per share, which, other than via increasing the LTV ratio, is the only way to meaningfully fund acquisitive growth. This will constrain Transcend’s strategy to grow into a larger specialised residential REIT and, as a result, any future benefits of achieving economies of scale are unlikely to be realised. Therefore, we want to provide a once-off liquidity event to existing Transcend shareholders and ensure the focus is on driving shareholder value rather than Transcend’s size and share liquidity.”

Emira’s general offer is a liquidity event for all existing shareholders at a clean share price of R5.38 per Transcend share – representing a 17% premium on the recent vendor placement price of R4.60, which most legacy shareholders declined to take up. This once-off liquidity event also represents a 12% premium to the effective R4.80 clean closing price of 8 July 2022. The clean share price will be escalated by an estimated distribution accrual per share for the applicable distribution period up until the finalisation date of the offer.

Emira has already received irrevocable undertakings from 16.7% of existing shareholders to support the general offer. Should competition commission approval be obtained and the general offer runs its course, this would effectively give Emira a minimum 57.4% stake in Transcend.

“We are confident the December 2021 vendor placement price most accurately reflects shareholders’ perceived value of Transcend, and the premium offered represents good value to those shareholders seeking an exit strategy to realise the value of their investment,” comments Jennett.

For Emira shareholders, the consolidation of Transcend as a listed subsidiary is a logical progression of its residential rental property strategy that it embarked on in 2018. It will result in value accretion for both Emira’s distributable income per share and NAV per share.

“This transaction achieves more than shifting our indirect investment in Transcend’s assets into a directly-held residential-to-let property portfolio. By taking Transcend in-house, Emira would realise value for shareholders by adding the advantage of critical mass, removing cost duplication on a corporate level, enabling better access to capital, and driving increased stakeholder value. At the same time, we would honour existing management arrangements with IHS for continuity of operations across the Transcend assets,” explains Jennett.

Emira has posted the necessary cash guarantees with the Takeover Regulation Panel for the value of the full offer. It used a new specific R500m facility from Rand Merchant Bank and available cash. Proceeds from Emira’s planned sale of its stake in Enyuka will comfortably settle this new facility and support its ongoing capital recycling programme.

Emira is a leading diversified REIT invested in a quality, balanced portfolio of retail, office, industrial and residential properties. Emira’s rental residential property exposure includes its stake in
Transcend and a direct investment in The Bolton, Rosebank with co-investor the Feenstra Group. Emira has total assets of R12.6bn, including 77 directly-held properties valued at R9.8bn in South Africa. A 17% portion of its total asset base is international, made up of equity investments in 12 grocery-anchored open-air convenience shopping centres in the USA.