Listed property unit trust Emira Property Fund is continuing to invest in the Australian listed property sector, announcing on Friday that its investment in Growthpoint Properties Australia had increased from 6,4% to 9,13%.

CEO James Templeton said the investment was being made at higher yields than were achievable in the South African property market. He said the fund’s calculations showed that the transaction would be earnings-enhancing for Emira participatory interest holders from day one.

At the current exchange rate of R6,92 to the Australian dollar (R6,50 at the time of the initial deal), the investment is worth R137m, implying a 17,4% total return in rand terms on the first tranche of units.

Emira has followed its R117m investment in Growthpoint made earlier this year with another R117m investment in Australia -based real estate investment trusts (REIT).

At the time of the initial Growthpoint transaction — the fund’s first offshore property investment — Emira noted that it was seeking to diversify its portfolio by taking a passive investment in a well-run Australian REIT secured by 25 high- quality industrial properties occupied by blue-chip tenants on relatively long leases.

Mr Templeton said the initial investment in Growthpoint at 175c had done well for Emira participatory interest holders. “Our investment in Growthpoint Properties Australia has done extremely well for Emira participatory interest holders to date and it was only natural that we would take up our rights in the new issue,” he said.

“The investment in the seven new Growthpoint properties diversifies the REIT away from its current focus on industrial properties by including two office buildings, a car park and four other industrial properties in its expanded portfolio.”

Growthpoint’s closing price on the Australian Stock Exchange recently was 193c and the trust had already gone ex-dividend to the tune of 8,5c per unit.

In August, Growthpoint Australia said it was looking to broaden its portfolio by acquiring seven additional properties, valued at A172m, on a yield of about 8,5%.

To facilitate the transaction, it needed to raise about A101m to cover the purchase price.

The company planned to cover the purchase price through a combination of debt and a rights offer that would see the issuing of additional stapled securities at A1,90 per stapled security.

It consequently urged its investors, including Emira, to take up their rights in the new issue.

In August, Emira announced that it had successfully subscribed for an additional A17,4m worth of Growthpoint stapled securities for a total consideration of R117m, bringing its investment in Growthpoint to more than 9%.

Growthpoint Properties Australia’s property holdings are mainly industrial properties located throughout Australia and worth an estimated A744m.

The average lease on its properties is 10,6 years and, after its most recent acquisitions, up to 57% of the property rental income will come from just two retail groups — Woolworths and the Coles Group.