Emira Property Fund wants to build scale in the US

The US is offering better returns as its economy continues to grow strongly.

Emira Property Fund is selling down its stake in Growthpoint Australia and turning its focus to the world’s largest real estate market, the US, where it plans to entrench its position, according to Business Day.  

CEO Geoff Jennett (pictured) said his team felt that its investment in Growthpoint Properties’ Australian arm is fully priced and that the US is offering better returns as its economy continues to grow strongly, thanks to healthy consumer spending and a low unemployment rate.

Emira is planning for its US assets to make up 15 percent of its overall portfolio in the next two years. Its US investments, mainly grocery-anchored convenience retail centres, already make up about 8 percent of the overall portfolio.

Emira owns a 2.4 percent stake in Growthpoint Australia, worth about R800 million based on a share price of A$4.29. Emira will gradually sell down its Australian investment rather than exit it in one move, according to Business Day. 

Emira became the first SA real estate group to buy assets in the US in 2017 when it partnered with The Rainier Companies, a Dallas, Texas based private commercial real estate investor. The partnership invests in grocery-anchored shopping centres that serve people living in second-tier American cities. 

The partnership has given Emira exposure to nine centres located in the south and southeastern part of the country, in states such as Ohio, Texas, Indiana, Florida, Missouri and Oklahoma. The centres provide Emira with tenants operating in nearly 250,000m2 of trading space in the world’s largest economy.

Emira’s American investment is worth about R1.1 billion, about 9 percent of its R12 billion asset base, and it remains the only JSE-listed fund with exposure to US commercial property. Geoff said he wanted to increase its portfolio in the US so that it accounts for 15 percent of Emira’s asset base in the next two years.