Emira’s US property assets top R2bn after latest strip mall acquisition

Twelfth deal takes group’s total offshore equity investments in the US to 17%.
Emira Property Fund CEO Geoff Jennett. Image: Supplied

JSE-listed Emira Property Fund announced an $18.45 million (about R300 million) investment in a 50 353m² open-air shopping centre in the United States on Monday, bringing the group’s total equity investment in the US over the last five years to R2.2 billion.

The Summit Woods Crossing shopping centre is the group’s 12th such acquisition, which it is co-investing in together with its US investment partner the Rainer Group of Companies.

Read: Emira plans to increase its exposure to the US market

The latest acquisition expands the group’s total offshore equity investment in US to 17% of its total asset base.

Today, Emira has a sizeable equity investment in the US of 350 000m², holding a portfolio value of $660 million of which it has contributed $140 million in equity.

“Our US equity investments have become a critical and core strategy. They enhance Emira’s diversification by geography, tenant and economy,” CEO Geoff Jennett says in a statement.

“We have established a track record and built good relationships in the US market with our partners, which enabled us to access this great investment at an approximately 10% annual cash on cash return in US$ per year. However, we anticipate a much higher total return from our investment in US$.”

Mall profile

The new grocer-anchored shopping centre is already 98% let and is over 90% occupied by national tenants “with a high credit quality underpin.” It has secured big-box retailer Target as a shadow anchor, with hardware giant Lowes, department stores Kohl’s and TJ Maxx, and BestBuy (consumer electronics) among its other tenants.

The group notes plans to secure a second grocer anchor to help enforce the centre’s dominance and unlock more value from the property.

“This is the first time Emira has made an investment in the US with the express aim of undertaking a significant asset management initiative to create a capital value uplift while still satisfying its yield requirements,” the group says.

Continuing to venture beyond SA 

The group reaffirmed its commitment to broaden its horizons beyond SA.

Emira currently has 77 directly-held properties in South Africa – spread across retail, office, industrial and residential sectors – which are valued at R9.8 billion.

“Our international strategy enables capital recycling and allocation into more resilient environments than South Africa’s constrained economy, and provides US$-denominated returns,” Jennett says.

“Subject to the right opportunities being found, we intend to continue on this investment path, taking an opportunity-by-opportunity approach with our American partners, staying focused on our chosen segment of retail property and delivering on value for our shareholders.”

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