Emira makes 4th US shopping centre investment

Stony Creek (Source: Emira)
Stony Creek (Source: Emira)

Emira Property Fund [JSE:EMI] has invested in its fourth shopping centre in the US, growing its exposure there in line with its international investment strategy.

The JSE-listed REIT (Real Estate Investment Trust) has undertaken this fourth equity deal in the US with its in-country partners, the Rainier Group of Companies.

Emira acquired 49% of the convenience retail Stony Creek Marketplace, valued at $32m, located in Noblesville, Indiana. The centre is in the Indianapolis metro area and near to two of Emira’s existing investments in Ohio.

The centre is 98.9% leased with 79% of its space let to national retailers. It has a weighted average lease expiry of 3.9 years.

The investment represents a cash-on-cash return of 11.7% in dollars for Emira, on a net cash equity investment of $6.5m. The investment was funded from Emira’s existing balance sheet, chiefly with the proceeds of its programme of asset disposals from its portfolio rebalancing plans. In particular the company wants to reduce its exposure to offices.

So far this calendar year Emira has sold and transferred three assets in SA - two offices and one non-core retail property - for a combined R250m. In the latter half of 2017 Emira also sold six other assets to the value of R236m.

The latest US deal takes Emira’s exposure to the US to 3% of its total assets and its international exposure in developed markets to 9% of total assets - including its investment in ASX-listed Growthpoint Properties Australia (GOZ).

“With this transaction Emira benefits from growing exposure to the attractive value available in the US in our chosen market segment," said Geoff Jennett, CEO of Emira Property Fund.

"We have targeted investment in grocery-anchored convenience retail centres in resilient markets located in some of the major southern and central states. We are confident that our low-risk co-investment strategy in the US remains the most prudent way to increase our international diversification into this developed market.”

By mid-afternoon on Wednesday Emira's share price was trading 1.24% higher at R15.49 per share.

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