Emira invests in Australian property trust

Posted On Wednesday, 10 August 2011 02:00 Published by eProp Commercial Property News
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Emira Property Fund, a listed property unit trust, has poured R61,1m into Growthpoint Properties Australia (Goz), an Australia-based real estate investment trust, saying the investment was earnings enhancing for unitholders of both companies.

James TempletonCEO James Templeton said yesterday the transaction was a further meaningful diversification of the assets in the Emira portfolio. He said the properties being acquired were of "high quality" and would also help diversify the Goz portfolio and reduce risk within the fund.

The additional investment would boost Goz’s market capitalisation to about A$1,2bn ($1,22bn), thereby attracting further interest from institutional investors. Mr Templeton said at a forward yield of 9,2%, the pricing of the rights offer was attractive and offered better value than was obtainable on physical property investment in SA.

The transaction was "a further meaningful diversification" of the assets in the Emira portfolio.

After the transaction, Emira would effectively own 8,2% of the units in Goz, or 23,8-million of the units in issue.

Emira made its first investment in Goz in May last year when it acquired 10,25-million units, or 6,4% of the units in issue, at a cost of R116,6m after being given regulatory permission to invest a portion of its funds abroad.

It subsequently participated in a rights issue in September last year, acquiring a further 9,175- million units valued at R117m when Goz announced it was acquiring the properties of property firm Property Solutions, and needed to raise A$101m to cover the purchase price.

In the latest transaction, Emira has once again followed its rights in a Goz rights issue to fund the purchase of the Australian stock exchanged-listed Rabinov Property Trust.

Although the Rabinov portfolio consists of 12 properties, Goz would acquire only six of them. The remainder will be sold back to the trust’s founding family.

The six properties being acquired are high-quality properties with an average age of seven years and average yield of 8,8%.

They have been independently valued at A$184m.

Two of the largest properties are located on the outskirts of Melbourne and are let to General Electric Australia on relatively long leases.

The others are also tenanted by blue-chip companies.

Subsequent to the issue of Goz units to Rabinov unitholders, Goz raised A$102,6m via the issue of 54-million units at 190c. Goz unitholders were entitled to 22,7- million new Goz units for every 100 Goz units held.

The rights offer was underwritten by Growthpoint SA, and the cash received would be used to pay down debt in the Rabinov portfolio.

Emira was consequently entitled to subscribe for 4,4- million new Goz units at a price of A$1,90 each, equating to R61,1m at an exchange rate of R7,28/A$1. Emira raised the money for the investment via a combination of the sale of selected property assets and the use of existing facilities.

Emira is disposing of 16 underperforming properties.

The properties are expected to yield about R690m for Emira.

Last year, the fund raised about R80m by disposing of six other properties in its portfolio identified as noncore.

The expected yield on the new units is 9,2%.

Last modified on Thursday, 24 April 2014 17:04

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