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Unaudited interim financial results for six months to 31 December 2014 and income distribution declaration
Emira Property Fund
(A property fund created under the Emira Property Scheme, registered in
terms of the Collective Investment Schemes Control Act No. 45 of 2002)
Share code: EMI
ISIN: ZAE000050712 (“Emira” or “the Fund”) Tax number: 0047/321/15/3
(Approved as a REIT by the JSE)
Unaudited interim financial results
For six months to 31 December 2014 and income distribution declaration
Growth in distributions +9,0%
Distribution per PI 64,65c
Distributable income growth of 13,0% to R330m
Net asset value growth per PI of 14,0% to 1??650c
Commentary
The board of directors of the manager of Emira, Strategic Real Estate
Managers (Pty) Ltd ("STREM") is pleased to announce a distribution
of 64,65 cents per Emira participatory interest (PI) for the 6 months to
31 December 2014. This is an increase of 9,0% on the previous comparable
period.
Vacancies and tenant renewals
Over the past two years, vacancies decreased from 7,8% (December 12) to
5,1% (December 13) to 4,9% (December 14). The office sector vacancy of
7,9% remains well below SAPOA national levels of 11,1%. This represents a
substantial decline in overall vacancies of 30 281m2 since December
2012, which was driven by leasing in the office sector as well as
strategic sales of certain properties.
Vacancy profile by sector (% of GLA)
Vacancies reduced to 4,9% for the overall portfolio from the comparable
5,1% last year. As at 31 December 2014, vacancies for Offices were lower
at 7,9% (2013: 10,5%), Retail properties were also lower at 2,8% (2013:
2,9%) and Industrial properties were higher at 3,8% (2013: 0,7%).
Tenant retention by GLA improved to 77% from 70% in the comparable period
last year.
Major leases concluded
The three biggest new leases concluded were at 500 Smuts Drive (5
374m2), Springfield Retail Centre (2 158m2) and Kokstad Main (2 062m2),
and the biggest renewals were at Wonderpark Shopping Centre (13 983m2),
Cambridge Park (5 615m2) and Brandwag Shopping Centre (4 191m2) – all to
high quality tenants such as Pick n Pay and Food Lovers Market.
Acquisition of Integri-T Portfolio
With effect from 1 July 2014, the Fund acquired 100% of the share capital
of the following companies incorporated in South Africa, known as the
Integri-T Portfolio, for a total enterprise value of R836,9m at a forward
yield of 9,4%.
Omnicron Investments 005 (Pty) Ltd
Lowmer Investments (Pty) Ltd
Monagon Properties (Pty) Ltd
Rapidough Properties 509 (Pty) Ltd
Adamass Investments (Pty) Ltd
Aquarella Investments (Pty) Ltd
Libra Investments 5 (Pty) Ltd
These subsidiaries, comprising two retail properties, three office
buildings and three industrial properties, contributed a profit of R38,8m
for the period from the date of acquisition to 31 December 2014, in line
with expectations.
Details of the assets and liabilities acquired are as follows:
Rm
Investment properties 836,9
Borrowings (386,3)
Net current liabilities (2,3)
Fair value of acquired interest in net assets 448,3
Total purchase consideration 448,3
Acquisitions
Acquisitions during the period also comprised a 60% undivided share in
Ben Fleur Shopping Centre for a purchase price of R66,5m at a yield of
9,4% which was transferred in October 2014. A further investment of R20m
is currently in the process of being spent on the property to
accommodate a Woolworths Food store as well as other line shops.
Disposals
The strategy to dispose of non-core buildings continued during the
period under review. The following four properties totalling R93,8m, had
been sold and transferred out of Emira during the six months to December
2014: Kya Sands (Corner Precision and Staal Streets), Harrogate Park,
Woodmead Office Park (50% share) and Executive City. These four were sold
at an aggregate forward yield of 8,9%.
A further five buildings with a total value of R535,5m representing an
aggregate forward yield of 6,9% and a premium to book value of 40%, were
sold at December 2014, but had not yet been transferred.
Refurbishments and extensions
Several projects totalling approximately R819,4m were underway. The most
significant of these was the major upgrade and extension to Wonderpark
Shopping Centre, where the centre was enlarged at a cost of R551,3m,
from 63 000m2 to 90 000m2 to accommodate extensions for existing national
tenants and the introduction of new anchor tenants. Also recently completed
was the Gateway Landing industrial development for a total capital outlay
of R57,4m. Both projects reached practical completion in October 2014.
Gearing
Even though the liquidity in the debt capital markets tightened up towards
the end of the year, Emira was successful in accessing funding at
competitive rates.
Funding activities during the six month period included:
Amount All-in-rate
Date (Rm) (%)
15 Aug 14 Drawdown of Nedbank 3-year facility 270 7,74
18 Aug 14 Drawdown of Standard Bank 4 year
facility 200 7,70
12 Sep 14 Repayment of 12-month commercial paper 230 6,54
12 Sep 14 Issue of 2-year domestic medium term
notes 270 7,43
15 Sep 14 Drawdown of RMB 3-year 8th Term Loan 200 7,83
10 Oct 14 Drawdown of RMB 3-year 8th Term Loan 66 7,83
6 Nov 14 Repayment of 12-month commercial paper 450 6,72
6 Nov 14 Issue of 12-month commercial paper 250 7,03
6 Nov 14 Issue of 2-year domestic medium term
notes 100 7,43
6 Nov 14 Issue of 3-year domestic medium term
notes 100 7,73
19 Nov 14 Repayment of 12-month commercial paper 100 6,78
19 Nov 14 Issue of 6-month fixed rate commercial
paper 50 7,12
Total debt as at 31 December 2014 was R4,6bn with a weighted average
duration to expiry of 2,1 years.
Fixed interest rate hedges were in place for a total R3 985m amounting to
85,4% of the Fund’s total debt balance.
The interest rate swap expiries range from 1 – 10 years with the weighted
average duration being 4,1 years.
R420m of interest rate hedges with 2018 expiries were restructured during
November 2014 at a cost of R31m, reducing the average interest rate
payable on those swaps from 8,97% to the prevailing market rate at the
time of 6,66%, with the duration of the swaps remaining the same as
previously. This restructuring will result in a positive impact of an
annualised R8m net to the distributable income of the Fund for the
duration of those swaps.
Growthpoint Australia Limited (GOZ)
At 31 December 2014, GOZ’s unit price was AUD2,75 resulting in Emira’s
investment of 27 225 813 units, comprising 4,9% of the total units in
issue, being valued at R707,3m compared to a cost price of R372,0m.
Results
The acquisitions, contractual escalations on the bulk of the portfolio,
significant leasing progress made during the period as well as the
stringent cost control all contributed to the Fund achieving a meaningful
increase in distributable income during the period.
Excluding the straight-lining adjustments in respect of future rental
escalations, revenue rose by 16,9% over the comparable period. This was
positively impacted by the leasing of vacant space, acquisitions and
organic growth from the existing portfolio and increased recoveries of
municipal expenses, offset by disposals.
Property expenses increased by just 1,7% over the previous comparable
period, mainly due to stringent cost control, a reduction in leasing
expenses as well as lower maintenance costs from historical high levels.
Depreciation was no longer taken into account for distribution purposes,
and this resulted in the comparable distribution being R7,1m higher than
the corresponding period.
Income from the Fund’s listed investment in Australia increased by 16,0%
due to an increase in the distribution per unit received from GOZ and the
depreciation of the rand against the Australian dollar.
Net finance costs increased by 64,4% as a result of the increased
utilisation of debt facilities to fund the acquisitions and new
developments of the Fund.
Net asset value increased by 14,0% from 1 447 cents per PI at
30 June 2014, to 1 650 cents per PI at 31 December 2014, the most
significant contributors to this being the revaluation of investment
properties (+137 cents) and the reduction in the liability for the
income distribution at the reporting period date (+65 cents).
Distribution statement
Half year Half year
ended 31 Dec ended 31 Dec %
R’000 2014 2013 change
Operating lease rental income and
tenant recoveries excluding straight-
lining of leases 837 473 716 721 16,9
Property expenses excluding amortised
upfront lease costs (290 600) (285 778) 1,7
Net property income 546 873 430 943 26,9
Income from listed investment 23 570 20 322 16,0
Management expenses
Reimbursement to STREM (16 252) (12 867) 26,3
Administration expenses (26 678) (20 866) 27,7
Depreciation — (7 134) (100)
Net finance costs (197 443) (118 341) 66,8
Finance costs (203 094) (123 530) 64,4
Interest paid and amortised
borrowing costs (208 204) (131 313) 58,6
Interest capitalised to the cost of
developments 5 110 7 783 (34,3)
Investment income 5 651 5 189 8,9
Distribution payable to participatory
interest holders 330 070 292 057 13,0
No of units in issue 510 550 084 492 423 583 3,7
Distribution per participatory
interest (cents) 64,65 59,31 9,0
Disposals
In accordance with the strategy of the Fund, certain properties that are
underperforming or pose excessive risk to the Fund are earmarked and
disposed of.
Properties transferred out of Emira during the 6 months to Dec 2014
GLA
Property Sector Location (m2)
Kya Sands (Cnr Precision &
Staal Street) (Siliconics) Industrial Kya Sands, Randburg 1 452
Harrogate Park Office Hatfield, Pretoria 1 711
Woodmead Office Park (50%) Office Woodmead, Johannesburg 8 162
Executive City Industrial Kya Sands, Randburg 4 558
15 883
Valuation Sale Exit
Jun 2014 price yield Effective
Property (Rm) (Rm) (%) date
Kya Sands (Cnr Precision & Staal
Street) (Siliconics) 5,1 5,1 14,1 Sep 2014
Harrogate Park 17,5 17,5 11,6 Nov 2014
Woodmead Office Park (50%) 60,4 60,0 5,1 Jul 2014
Executive City 11,2 11,2 10,8 Jul 2014
94,2 93,8 8,9
Properties sold but not yet transferred out of Emira at Dec 2014
GLA
Property Sector Location (m2)
122 Pybus Road Office Sandton, Johannesburg 5 399
Tokai Shopping Centre
500 Smuts Drive Retail Ferndale, Johannesburg 2 603
(Oracle House) Office Midrand, Gauteng 5 201
Braamfontein Centre Office Braamfontein, Johannesburg 21 310
Brandwag Shopping Centre
+ Kosmos Woonstelle Retail Bloemfontein CBD 12 328
46 841
Valuation Sale Effective
Jun 2014 Price /Anticipated
Property (Rm) (Rm) effective date
122 Pybus Road 36,0 76,0 Jan 2015
Tokai Shopping Centre 16,0 16,0 Jun 2015
500 Smuts Drive (Oracle House) 43,5 43,5 Jun 2015
Braamfontein Centre 128,0 150,0 May 2015
Brandwag Shopping Centre + Kosmos
Woonstelle 159,0 250,0 Apr 2015
382,5 535,5
Vacancies
Number of GLA Vacancy
buildings Jun 2014 Jun 2014
Jun 2014 (m2) (m2) %
Office 63 435 299 38 420 8,8
Retail 34 352 969 9 558 2,7
Industrial 44 348 393 3 510 1,0
Total 141 1 136 661 51 488 4,5
Number of GLA Vacancy
buildings Dec 2014 Dec 2014
Dec 2014 (m2) (m2) %
Office 63 421 751 33 444 7,9
Retail 39 405 693 11 160 2,8
Industrial 46 378 992 14 403 3,8
Total 148 1 206 436 59 007 4,9
Valuations
Total portfolio movement
Jun 2014 Dec 2014
Sector (R’000) R/m2 (R’000) R/m2
Office 5 381 621 12 363 5 715 538 13 550
Retail 3 669 868 10 397 4 860 610 11 981
Industrial 1 707 515 4 901 1 899 598 5 012
10 759 004 12 475 746
Difference Difference
Sector (%) (R’000)
Office 6,2 333 917
Retail 32,4 1 190 742
Industrial 11,3 192 083
16,0 1 716 742
The valuation movement on a like-for-like basis was 4,8%.
Debt
Emira has a moderate level of gearing with interest bearing debt to
total property assets of 35,4% as at 31 December 2014.
Weighted Weighted Amount % of
average rate % average term (Rm) debt
Debt — Swap 8,8 4,1 years 3 984,6 85,4
Debt — Floating 7,5 682,0 14,6
Total 8,6 4 666,6 100,0
Less: Costs capitalised
not yet amortised (6,2)
Per statement of
financial position 4 660,4
Issue of participatory interests (PIs)
During the period, the Fund issued the following PIs to raise a total of
R376,5m to partly fund the purchases of the Integri-T Portfolio and the
Ben Fleur Boulevard:
17 July 2014 22 222 222 PIs at R13,95
22 October 2014 4 446 822 PIs at R14,95
Change in distribution policy — depreciation
Historically Emira provided for depreciation in respect of certain fixed
assets, in line with tax allowances. As previously disclosed to investors,
from FY15, Emira no longer includes the depreciation charge
in its distributable income.
Liability for income distribution
In order to comply with best practice and to be comparable to its peers,
Emira no longer recognises the liability, as at the report period date,
for the income distribution amount to be distributed after the reporting
period date.
Directorate
As previously announced, Peter Thurling retired as Chief Financial Officer
of the Fund with effect from 31 December 2014 and Geoff Jennett, CA (SA),
was appointed as his replacement with effect from 1 January 2015.
Prospects
The benefit of the improved occupancies, together with the property
acquisitions and tight cost control, should continue to result in a
similar healthy improvement in distribution growth per PI for the twelve
months to June 2015.
Any forecast financial information contained herein has not been reviewed
or reported on by the Fund’s external auditors.
Income distribution declaration
Notice is hereby given that a final cash distribution of 64,65 cents
(2014: 59,31 cents) per PI has been declared, payable to PI holders on
16 March 2015. The source of the distribution comprises net income from
property rentals, income earned from the Fund’s listed property investment
and interest earned on cash on deposit. Please refer to the Statement of
Comprehensive Income for further details.
In accordance with Emira’s status as a REIT, PI holders are advised that
the distribution meets the requirements of a “qualifying distribution” for
the purposes of section 25BB of the Income Tax Act, No. 58 of 1962
(“Income Tax Act”). Accordingly, qualifying distributions received by
local tax residents must be included in the gross income of such PI
holders (as a non-exempt dividend in terms of section 10(1) (k) (aa) of
the Income Tax Act), with the effect that the qualifying distribution is
taxable as income in the hands of the PI holder. These qualifying
distributions are, however, exempt from dividend withholding tax in the
hands of South African tax resident PI holders, provided that the South
African resident PI holders have provided the following forms to their
Central Securities Depository Participant (“CSDP”) or broker, as the
case may be, in respect of uncertificated PIs, or the Transfer
Secretaries, in respect of certificated PIs:
a) a declaration that the distribution is exempt from dividends tax; and
b) a written undertaking to inform the CSDP, broker or the Transfer
Secretaries, as the case may be, should the circumstances affecting the
exemption change or the beneficial owner cease to be the beneficial owner,
both in the form prescribed by the Commissioner for the South African
Revenue Service. PI holders are advised to contact their CSDP, broker or
the Transfer Secretaries, as the case may be, to arrange for the
abovementioned documents to be submitted prior to payment of the
distribution, if such documents have not already been submitted.
Qualifying distributions received by non-resident PI holders will not be
taxable as income and instead will be treated as ordinary dividends but
which are exempt in terms of the usual dividend exemptions per section
10(1) (k) of the Income Tax Act. It should be noted that until 31
December 2013 qualifying distributions received by non-residents were not
subject to dividend withholding tax. From 1 January 2014, any qualifying
distribution received by a non-resident from a REIT will be subject to
dividend withholding tax at 15%, unless the rate is reduced in terms of
any applicable agreement for the avoidance of double taxation (“DTA”)
between South Africa and the country of residence of the PI holder.
Assuming dividend withholding tax will be withheld at a rate of 15%, the
net amount due to non-resident PI holders will be 54,9525 cents per PI.
A reduced dividend withholding tax rate in terms of the applicable DTA,
may only be relied on if the non-resident PI holder has provided the
following forms to their CSDP or broker, as the case may be, in respect
of the uncertificated PIs, or the Transfer Secretaries, in respect of
certificated PIs:
a) a declaration that the dividend is subject to a reduced rate as a
result of the application of a DTA; and
b) a written undertaking to inform their CSDP, broker or the Transfer
Secretaries, as the case may be, should the circumstances affecting the
reduced rate change or the beneficial owner cease to be the beneficial
owner, both in the form prescribed by the Commissioner for the South
African Revenue Service. Non-resident PI holders are advised to contact
their CSDP, broker or the Transfer Secretaries, as the case may be, to
arrange for the abovementioned documents to be submitted prior to payment
of the distribution if such documents have not already been submitted, if
applicable.
Local tax resident PI holders as well as non-resident PI holders are
encouraged to consult their professional advisors should they be in any
doubt as to the appropriate action to take.
Last day to trade cum distribution Friday, 6 March 2015
Participatory interests trade ex distribution Monday, 9 March 2015
Record date Friday, 13 March 2015
Payment date Monday, 16 March 2015
PI certificates may not be dematerialised or rematerialised between
Monday, 9 March 2015 and Friday, 13 March 2015, both days inclusive.
By order of the STREM Board
Martin Harris
Company Secretary
Ben van der Ross
Chairman
James Templeton
Chief Executive Officer
Bryanston, 18 February 2015
Basis of preparation and accounting policies
These unaudited condensed consolidated interim financial statements of
Emira Property Fund (“Emira” or “the Fund”) have been prepared in
accordance with International Financial Reporting Standards (“IFRS”)
including IAS 34, and are in compliance with the Listings Requirements of
the JSE Limited. The accounting policies used in the preparation of
these financial statements are consistent with those used in the audited
annual financial statements for the year ended 30 June 2014.
As a result of the amendment to the service charge arrangements, in terms
of IFRS, the risk and rewards of the manager of Emira, Strategic Real
Estate Managers (Pty) Limited (“STREM”) are deemed to be attributable to
Emira. The financial statements of STREM have therefore been consolidated
with those of Emira, even though Emira has no direct or indirect
shareholding in STREM. This report was compiled under the supervision of
Geoff Jennett CA (SA), the Chief Financial Officer of Emira.
Condensed consolidated statement of financial position
Unaudited Unaudited Audited
R’000 31 Dec 2014 31 Dec 2013 30 Jun 2014
Assets
Non-current assets 12 656 493 9 902 819 11 259 150
Investment properties 11 707 105 9 066 575 10 371 073
Allowance for future rental
escalations 186 188 155 569 162 190
Unamortised upfront lease costs 40 553 43 972 45 413
Fair value of investment
properties 11 933 846 9 266 116 10 578 676
Listed property investment 707 306 626 312 665 992
Derivative financial instruments 15 341 10 391 14 482
Current assets 307 349 240 531 199 523
Accounts receivable 219 629 198 621 148 048
Derivative financial instruments 11 632 12 567 6 172
Cash and cash equivalents 76 088 29 343 45 303
Non-current assets held for sale 541 900 476 425 180 328
Total assets 13 505 742 10 619 775 11 639 001
Equity and liabilities
Participatory interest holders'
capital and reserves 8 424 367 6 684 653 7 003 785
Non-current liabilities 3 302 627 1 424 920 2 617 964
Interest-bearing debt 3 260 617 1 363 914 2 573 916
Derivative financial instruments 42 010 49 981 44 048
Deferred taxation — 11 025 —
Current liabilities 1 778 748 2 510 202 2 017 252
Short-term portion interest-
bearing debt 1 399 738 1 893 170 1 379 864
Accounts payable 364 200 307 670 313 316
Derivative financial instruments 14 810 17 306 15 017
Distributions payable to
participatory interest holders — 292 056 309 055
Total equity and liabilities 13 505 742 10 619 775 11 639 001
Condensed consolidated statement of changes in equity
Revaluation
Participatory and other
R’000 interest reserves
Balance at 30 June 2013 3 618 255 2 976 706
Participatory interests repurchased (68 135)
Total comprehensive income for the period
Distribution to participatory interest
holders
Transfer to fair value reserve (net of
deferred taxation) 165 228
Balance at 31 December 2013 3 550 120 3 141 934
Balance at 1 July 2014 3 435 434 3 573 200
Participatory interests issued 374 268
Total comprehensive income for the period
Transfer to fair value reserve 737 934
Balance at 31 December 2014 3 809 702 4 311 134
Non-
Retained controlling
R’000 earnings interest Total
Balance at 30 June 2013 (1 287) (3 512) 6 590 162
Participatory interests repurchased (68 135)
Total comprehensive income for the
period 457 285 (2 602) 454 683
Distribution to participatory
interest holders (292 057) (292 057)
Transfer to fair value reserve (net
of deferred taxation) (165 228) —
Balance at 31 December 2013 (1 287) (6 114) 6 684 653
Balance at 1 July 2014 (3 549) (1 300) 7 003 785
Participatory interests issued (14 193) 360 075
Total comprehensive income for the
period 1 062 734 (2 227) 1 060 507
Transfer to fair value reserve (737 934) —
Balance at 31 December 2014 307 058 (3 527) 8 424 367
Condensed consolidated statement of comprehensive income
Unaudited Unaudited
six months six months Audited
ended ended year ended
R’000 31 Dec 2014 31 Dec 2013 30 Jun 2014
Revenue 864 403 741 135 1 476 358
Operating lease rental income
and tenant recoveries 837 473 716 721 1 448 914
Allowance for future rental
escalations 26 930 24 414 27 444
Income from listed property
investment 23 570 20 322 44 225
Property expenses (294 882) (281 780) (559 216)
Acquisition costs — — (2 262)
Fee paid on cancellation of
interest-rate swap agreements (31 839) — —
Administration expenses (45 157) (31 886) (68 178)
Depreciation (5 271) (7 211) (11 637)
Operating profit 510 824 440 580 879 290
Net fair value adjustments 745 377 113 946 529 891
Net fair value gain on
investment properties 699 133 86 072 461 603
Change in fair value as a result
of straight-lining lease rentals (26 930) (24 414) (27 444)
Change in fair value as a result
of amortising upfront lease costs 4 282 (3 998) (4 257)
Change in fair value as a result
of property appreciation in value 721 781 114 484 493 304
Revaluation of derivative financial
instrument relating to share
appreciation rights scheme 4 930 (4 416) (3 682)
Unrealised gain on fair
valuation of listed property
investment 41 314 32 290 71 970
Profit before finance costs 1 256 201 554 526 1 409 181
Net finance costs (195 694) (104 041) (226 849)
Finance income 5 651 5 233 13 546
Interest received 5 651 5 233 13 546
Finance costs (201 345) (109 274) (240 395)
Interest paid and amortised
borrowing costs (208 204) (131 313) (276 019)
Interest capitalised to the
cost of developments 5 110 7 783 15 945
Unrealised surplus on
interest-rate swaps 1 749 14 256 19 679
Profit before income tax
credit 1 060 507 450 485 1 182 332
Income tax credit — 4 198 15 223
SA normal taxation — — —
Deferred taxation — 4 198 15 223
— Revaluation of investment
properties — — —
— Other timing differences
including allowance for future
rental escalations — 4 198 15 223
Profit for the year 1 060 507 454 683 1 197 555
Attributable to Emira equity
holders 1 062 734 457 285 1 195 343
Attributable to minority
interests (2 227) (2 602) 2 212
1 060 507 454 683 1 197 555
Total comprehensive income
Attributable to Emira equity
holders 1 062 734 457 285 1 195 343
Attributable to minority
interests (2 227) (2 602) 2 212
1 060 507 454 683 1 197 555
Reconciliation between earnings and headline earnings and distribution
Unaudited Unaudited
six months six months Audited
ended ended year ended
R’000 31 Dec 2014 31 Dec 2013 30 Jun 2014
Profit for the period
attributable to equity holders 1 060 507 454 683 1 197 555
Adjusted for:
Net fair value gain on
revaluation of investment
properties (699 133) (86 072) (461 603)
Headline earnings 361 374 368 611 735 952
Adjusted for:
Fee paid on cancellation of
interest-rate swap agreements 31 839 — —
Depreciation 5 271 — —
Allowance for future rental
escalations (26 930) (24 414) (27 444)
Amortised upfront lease costs 4 282 (3 998) (4 257)
Revaluation of share
appreciation rights scheme
derivative financial
instrument (4 930) 4 416 3 682
Unrealised gain on listed
property investment (41 314) (32 290) (71 970)
Unrealised surplus on
interest-rate swaps (1 749) (14 256) (19 679)
Charge/(credit) in respect of
leave pay provision and share
appreciation rights scheme 2 227 (1 814) (2 212)
Acquisition costs — — 2 262
Deferred taxation — other
timing differences — (4 198) (15 223)
Distribution payable to
participatory interest holders 330 070 292 057 601 111
Distribution per participatory
interest
Interim (cents) 64,65 59,31 59,31
Final (cents) — — 63,87
64,65 59,31 123,18
Number of participatory interests
in issue at the end
of the period 510 550 084 492 423 583 483 881 040
Weighted average number of
participatory interests in
issue 505 886 788 493 816 182 490 270 328
Earnings per participatory
interest (cents) 209,63 92,08 244,26
The calculation of earnings
per participatory interest is
based on net profit for the
period of R1 060,5 million
(2013: R454,7 million), divided
by the weighted average number
of participatory interest in
issue during the period of 505
886 788 (2013: 493 816 182).
Headline earnings per
participatory interest (cents) 71,43 74,65 150,11
The calculation of headline earnings
per participatory interest is based
on net profit for the period, adjusted
for non-trading items, of R361,4
million (2013: R368,6 million), divided
by the weighted average number of
participatory interests in issue
during the period of 505 886 788
(2013: 493 816 182).
Diluted headline earnings per
participatory interest (cents) 71,43 74,65 150,11
Condensed statement of cash flows
Unaudited Unaudited
six months six months Audited
ended ended year ended
R’000 31 Dec 2014 31 Dec 2013 30 Jun 2014
Cash generated from operations 509 331 396 547 892 472
Finance income 5 651 5 233 13 546
Interest paid (208 204) (131 313) (276 019)
Fee paid on cancellation of
interest-rate swap agreements (31 839) — —
Acquisition costs — — (2 262)
Distribution to participatory
interest holders (323 248) (292 910) (584 966)
Net cash (utilised in)/generated
from operating activities (48 309) (22 443) 42 771
Acquisition of, and additions to, (257 258) (345 015) (560 065)
investment properties and fixtures
and fittings Proceeds on disposal of
investment properties and
fixtures and fittings 93 828 118 936 313 079
Acquisition of subsidiary (448 279) — (281 232)
Acquisition of investment in
listed property fund — (56 920) (56 920)
Net cash utilised in investing
activities (611 709) (282 999) (585 138)
Participatory interests
issued/(re-purchased) 374 268 (68 135) (182 821)
Increase in interest-bearing debt 1 586 731 384 362 2 572 782
Interest-bearing debt repaid (1 266 480) — (1 820 000)
Derivative acquired in respect of
share appreciation rights scheme (3 716) (4 080) (4 929)
Net cash generated from financing
activities 690 803 312 147 565 032
Net increase in cash and cash
equivalents 30 785 6 705 22 665
Cash and cash equivalents at the
beginning of the period 45 303 22 638 22 638
Cash and cash equivalents at the
end of the period 76 088 29 343 45 303
Segmental information
R’000 Office Retail Industrial
Sectoral segments
Revenue 393 504 341 825 129 074
Revenue 384 269 328 005 125 199
Allowance for future rental
escalations 9 235 13 820 3 875
Segmental result
Operating profit 247 077 207 921 87 365
Investment properties 5 715 538 4 860 610 1 899 598
Geographical segments
Revenue
— Gauteng 284 963 214 518 84 809
— Western and Eastern Cape 56 821 32 874 24 453
— KwaZulu-Natal 27 118 49 041 15 937
— Free State 15 367 31 572
384 269 328 005 125 199
Investment properties
— Gauteng 4 345 966 3 348 005 1 307 748
— Western and Eastern Cape 843 872 457 508 365 100
— KwaZulu-Natal 357 600 606 497 226 750
— Free State 168 100 448 600
5 715 538 4 860 610 1 899 598
Administrative
R’000 and corporate Total
Sectoral segments
Revenue 864 403
Revenue 837 473
Allowance for future rental escalations 26 930
Segmental result
Operating profit (31 539) 510 824
Investment properties 12 475 746
Geographical segments
Revenue
— Gauteng 584 290
— Western and Eastern Cape 114 148
— KwaZulu-Natal 92 096
— Free State 46 939
837 473
Investment properties
— Gauteng 9 001 719
— Western and Eastern Cape 1 666 480
— KwaZulu-Natal 1 190 847
— Free State 616 700
12 475 746
Measurements of fair value
Financial instruments
The financial assets and liabilities measured at fair value in the
statement of financial position are grouped into the fair value hierarchy
as follows:
Level 1 Level 2 Level 3
R’000 Dec 2014 Dec 2014 Dec 2014
Assets
Investments 707 306
Derivative financial instruments 12 076 14 897
Total 707 306 12 076 14 897
Liabilities
Derivative financial instruments 56 820
Total — 56 820 —
Net fair value 707 306 (44 744) 14 897
Level 1 Level 2 Level 3
R’000 Dec 2013 Dec 2013 Dec 2013
Assets
Investments 626 312
Derivative financial instruments 14 506 8 452
Total 626 312 14 506 8 452
Liabilities
Derivative financial instruments 67 287
Total — 67 287 —
Net fair value 626 312 (52 781) 8 452
Measurement of fair value
The methods and valuation techniques used for the purpose of measuring
fair value are unchanged compared to the previous reporting period.
Investments
This comprises shares held in a listed property company at fair value
which is determined by reference to quoted closing prices at the reporting
date.
Derivative financial instruments
The fair values of the interest rate swap contracts are determined using
discounted cash flow projections, based on estimates of future cash flows,
supported by the terms of the relevant swap agreements and external
evidence such as the ZAR 0-coupon perfect-fit swap curve. The call option
contracts to the value of R14,9 million are valued using a Black Scholes
option pricing model.
Fund Manager: Strategic Real Estate Managers (Pty) Ltd Directors of the
Fund Manager: BJ van der Ross (Chairman)*, JWA Templeton (Chief Executive
Officer), MS Aitken*, BH Kent**, GM Jennett, V Mahlangu**, NE Makiwane*,
W McCurrie*, MSB Neser**, V Nkonyeni*, U van Biljon, G van Zyl**
*Non-executive Director
**Independent Non-executive Director
Registered address: Optimum House, Epsom Downs Office Park, 13 Sloane
Street, Bryanston, 2191
Sponsor: Rand Merchant Bank (a division of FirstRand Bank Limited)
Transfer Secretaries: Computershare Investor Services (Pty) Ltd, 70
Marshall Street, Johannesburg, 2001
www.emira.co.za
Date: 18/02/2015 08:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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