South African property fund Emira Property Fund on Tuesday announced a distribution per participatory interest for the six months ended December 2008 was at 48.79 cents, up 10.04% from 44.34 cents for the same period in 2007.

Headline earnings per participatory interest were at 6.13 cents, down from the 44.87 cents reported the previous year.

The group said revenue was at 531.9 million rand, up from the 460.6 million reported for the previous year.

"Emira's portfolio performed well during the period, with vacancies declining and double-digit upward rental reversions on new leases and renewals.

Despite this good performance, operating conditions in the commercial property market as a whole deteriorated towards the end of 2008, as the impact of rising municipal rates and electricity charges, as well as slower economic growth filtered through to tenants.

This has resulted in rising arrears, a reluctance on the part of tenants to take on new space,
and rental growth becoming more subdued," the group said.

Looking ahead, Emira said that the tougher trading environment across the South African commercial property market was expected to prevail for the balance of 2009.

"Maintaining occupancy levels and collecting rental income due to the Fund will therefore be even more important than normal during this period.

"Nonetheless, with a growing income stream from the Fund's existing portfolio, the benefit of the earnings enhancing capital expenditure programmes over the past two years and favourable interest rates on its debt, the Board believes that the Fund will show similar growth in distributions for the year ending June 30 2009.

"This profit forecast has not been reviewed or reported on by the Fund's auditors," the group added.