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EMIRA PROPERTY FUND LIMITED - Reviewed financial results for the year ended 30 June 2016 and dividend distribution declaration

Release Date: 17/08/2016 10:58
Code(s): EMI     PDF:  
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Reviewed financial results for the year ended 30 June 2016 and dividend distribution declaration

Emira Property Fund Limited
(Incorporated in the Republic of South Africa)
Registration number: 2014/130842/06
Share code: EMI ISIN: ZAE000203063
(“Emira” or “the Fund” or “the Company”) 
(Approved as a REIT by the JSE)

Reviewed financial results for the year ended 30 June 2016 
and dividend distribution declaration

Highlights
Growth in distributions +8,8%
Final dividend per share 75,76c
Total FY 2016 distributions per share 146,10c
Distributable income R745,9m
Fixed debt 93,1%

Commentary
The Emira Board of Directors is pleased to announce that a final 
dividend of 75,76 cents per share has been declared for the six 
months to 30 June 2016. This brings the full year distribution 
per share to 146,10 cents which is a year-on-year increase of 
8,8% and in line with the guidance provided after the six month 
period to 31 December 2015.

Vacancies and tenant renewals
Vacancies have increased marginally from 4,0% at 30 June 2015 to 5,3% at
year-end. Emira’s vacancy levels at a sector level are either in-line 
with or better than SAPOA’s national benchmarks. Specifically, Emira’s  
office sector vacancies are in-line with SAPOA national levels of 10,5%, 
retail sector vacancies at 2,8% are well below the national average 
of 5,3% and industrial vacancies of 2,4% are also lower than the national 
average of 4,0%. Emira continues to manage its vacancies through a 
combination of tenant retention and letting strategies and in some 
instances the potential sale of properties.

A total of 75% by GLA (or 77% by revenue) of expiring tenants were 
renewed and retained during the 12 months to 30 June 2016.

Vacancy profile by sector (% of GLA)
                                         June 2016 June 2015 June 2014
Office                                       10,5%      7,8%      8,8% 
Retail                                        2,8%      2,8%      2,7% 
Industrial                                    2,4%      1,4%      1,0%

Major leases concluded
The largest new leases concluded for the 12 months ending 30 June 2016
were at Gateway Landing in Pretoria (3 842m2), Universal Industrial Park 
in Durban (3 089m2) and Technohub in Midrand (2 753m2). The largest 
renewals were Defy at the Defy Appliances building in Denver (10 100m2), 
Mitek in Midrand (6 604m2), Salga at Menlyn Corporate Park in Menlyn 
(5 939m2), Spoor and Fisher at Highgrove Office Park in Centurion 
(5 814m2 - short term until September 2016) and Evapco in Isando (5 715m2).

Acquisitions
During the year Emira completed four acquisitions at a total cost of
R244,4m and a blended yield of 7,9%. The acquisitions include:
(i)   a 50% undivided share in Mitchells Plain Town Centre in the Western
      Cape for a purchase price of R77,6m at an initial yield of 9,3%;
(ii)  the remaining 40% of Ben Fleur Boulevard, a convenience centre
      located in Emalahleni, for R59,2m plus R4,0m for extra bulk, at an 
      initial yield of 8,8% or blended yield of 8,2%;
(iii) 1 West Street, a greenfield site of 4,2 hectares with 24 577m2 of 
      bulk commercial rights located opposite the Gautrain Station in 
      the new Centurion CBD for R17,2m; and
(iv)  a 50% undivided share in five buildings comprising Summit Place, 
      the P-grade Commercial development in Menlyn, Pretoria, for a total
      amount of R403,5m upon final completion, at an average yield of 
      8,1%. Summit Place A and Summit Place C, the two completed office 
      buildings in the Summit Place development, transferred in 
      December 2015 at a cost of R86,4m. The balance of Summit Place, 
      which comprises office and retail space, is being developed by 
      Emira and its partners with an expected final completion date 
      in January 2017. By 30 June 2016, R195,7m had been paid for the 
      land and development costs for Summit Place D, Summit Place E 
      and Summit Place G1.

Disposals
The strategy to dispose of non-core buildings continued during the year 
under review. The following three properties, totalling R284,5m, were 
sold and transferred out of Emira during the 12 months to 30 June 2016: 
Brandwag Shopping Centre and Kosmos Woonstelle; 1289 Heuwel Avenue; 
and 284 Oak Avenue. These three properties were sold at a combined 
forward yield of 6,5% and a combined 49,0% premium to book value.

At 30 June 2016, the Fund had committed to selling a further 18 properties 
valued at R835,0m, which have been classified as held for sale.

Emira will continue to rebalance its portfolio, through strategic disposals, 
to reduce its office exposure and additional initiatives are planned 
to further rebalance the sectorial exposures into other, more defensive 
sectors.

Refurbishments and extensions
Projects to modernise, extend and redevelop six buildings are currently 
underway totalling approximately R759,9m, the most significant of which
are the redevelopment of Knightsbridge Manor Office Park (“Knightsbridge”)
in Bryanston and Kramerville Corner in Kramerville.

The redevelopment of the prime-located Knightsbridge commenced in November
2015 and the development will offer 29 419m2 of prime P-grade office space 
on final completion. The R813,8m project is being undertaken in three phases, 
with the first phase set to be complete in November 2017 at a cost of R339m 
with 47% pre-let to WSP|Parsons Brinckerhoff. The new office park will 
attain a minimum 4-Star Green Star SA rating from the Green Building 
Council South Africa.

The major upgrade and refurbishment of Kramerville Corner is nearing completion. 
As a result of letting demand, the scope of the project was extended and it 
is expected to be completed by the end of September 2016 at a total cost of 
R85,5m with a first year yield of 9,5%.

The number of projects underway reflects the Fund’s strategy to continually 
upgrade and maintain the portfolio and extract value from existing bulk.

Gearing
Emira has diversified its sources of funding and now has banking facilities 
in place with all of the major South African banks. In addition, Emira 
continues to successfully access funding via the debt capital markets at 
competitive rates despite fears of liquidity tightening.

Total debt as at 30 June 2016 was R4,9bn with a weighted average duration 
to expiry of 1,7 years. The average duration of the debt has decreased 
slightly as a result of the passage of time, however active steps are 
underway to extend long dated term debt, which is expiring over the next
12 months. The debt expiry profile has been managed to ensure that the 
amount of debt expiring in any one period is manageable. At 30 June 2016, 
the Fund had R722,0m of undrawn, backup facilities which further reduces 
debt refinance risk.

Funding activities during the first six months of the financial year under 
review included:

                                                                   All-in
                                                            Amount   rate
Date                                                           (Rm)    (%)
19-Aug-15  Repayment of 4-year domestic medium term notes      500   7,53
19-Aug-15  Issue of 3-year domestic medium term notes          430   8,09
19-Aug-15  Issue of 5-year domestic medium term notes           70   8,28
24-Aug-15  Repayment of 6-month commercial paper               175   7,15
24-Aug-15  Issue of 6-month commercial paper                    42   7,38
24-Aug-15  Issue of 12-month commercial paper                  158   7,78
01-Sep-15  Extension of RMB 7th term loan to 3 years           500   8,23
01-Sep-15  Extension of RMB 8th term loan to 4 years           385   8,33
11-Sep-15  Drawdown of 2-year ABSA facility                    165   7,90
05-Nov-15  Repayment of 12-month commercial paper              250   7,25
05-Nov-15  Issue of 3-month commercial paper                    10   7,03
05-Nov-15  Issue of 6-month commercial paper                    70   7,48
05-Nov-15  Issue of 12-month commercial paper                  170   7,76

Funding activities during the second six months of the financial year 
under review included:

                                                                   All-in
                                                            Amount   rate
Date                                                           (Rm)    (%)
04-Feb-16  Repayment of 3-month commercial paper                10   6,77
04-Feb-16  Issue of 6-month commercial paper                    42   7,99
22-Feb-16  Issue of 6-month commercial paper                    30   8,13
23-Feb-16  Repayment of 12-month commercial paper              137   7,68
23-Feb-16  Repayment of 6-month commercial paper                42   7,24
23-Feb-16  Issue of 12-month commercial paper                  179   8,18
04-May-16  Repayment of 6-month commercial paper                70   7,83
04-May-16  Issue of 6-month commercial paper                    70   8,17
24-Jun-16  Drawdown of 12-month Investec facility               15   8,25

During the six months to 30 June 2016 the Fund concluded a R155m two-year 
secured facility with the Bank of China, a R200m two-year secured facility 
with Nedbank and a 12-month unsecured facility of R200m with Investec. 
These additional facilities together with a new R300m four-year secured 
facility concluded with Standard Bank post 30 June 2016, remain largely 
undrawn and provide the Fund with sufficient liquidity to take advantage
of opportunities as they arise.

Fixed interest rate hedges totalled R4,6bn at 30 June 2016, equating to
93,1% of the Fund’s total debt balance. The hedging percentage is expected
to be maintained at or around this level with further interest rate hedges 
to be acquired as new debt is drawn down on the Knightsbridge and Summit 
Place development projects.

In June 2016, Emira entered into a further AUD58,0m of cross-currency 
interest-rate swaps at a weighted average fixed rate of 2,1% for an 
average duration of 2,9 years, increasing its effective Australian 
dollar (“AUD”) denominated debt to 97,7% of its investment in Growthpoint 
Australia Limited (“GOZ”). The extent of the exposure to AUD debt will 
be managed accordingly as the rand versus AUD exchange rate changes.

Growthpoint Australia Limited
As at 30 June 2016, GOZ’s unit price was AUD3,15 resulting in Emira’s 
investment of 27 225 813 units, comprising 4,9% of the total units in 
issue, being valued at R940,4m compared with the initial cost price 
of R372,0m.

As outlined above, Emira has entered into cross-currency interest-rate 
swaps pursuant to which it is liable for AUD interest at a weighted 
average fixed rate of 2,1% and receives rand interest at the 3-month 
JIBAR rate. Emira plans to maintain its holding in GOZ and continue 
its active cross-currency interest-rate swap programme to provide 
international exposure and diversification, while maximising income 
from its holding.

Results
The recent acquisitions and the contractual escalations on the bulk of 
the portfolio, together with the good leasing progress and stringent 
cost control, resulted in the Fund achieving an increase in distributable
income during the year.

Excluding the straight-lining adjustments in respect of future rental 
escalations, revenue rose year-on-year by 5,6%. This was positively 
impacted by acquisitions and organic growth from the existing portfolio 
as well as increased recoveries of municipal expenses, offset by disposals
and rent reversions.

Rental income includes an accrual of R18,1m in relation to Worley Parsons 
with whom the Fund is in dispute regarding their premature vacation of 
their leased premises at Emira’s Corobay Corner building in Menlyn, 
Pretoria. This accrual represents the contractual rental due for the 
12 months to 30 June 2016, less rentals achieved on subletting portions 
of the area previously occupied by Worley Parsons.

Property expenses were well contained with the gross cost-to-income 
ratio unchanged at 34,4% (June 2015: 34,4%).

Administration expenses, which include staff costs and property management 
fees, increased by 7,4% to R88,5m (June 2015: R82,4m).

As previously disclosed, from 1 July 2015 lease commission costs are no 
longer expensed in full in the year in which they are incurred for 
distribution calculation purposes, but are rather spread over the life 
of the lease. This resulted in the distribution for the year ended 
30 June 2016 being R20,0m higher (3,92 cents per share) than it would 
have been had this change not taken place.

Income from the Fund’s listed investment in GOZ increased by 22,5% due 
to an increase in the distribution per unit received, the lower dividend 
withholding tax and the depreciation of the rand against the AUD.

Finance costs increased by 1,4% as a result of higher interest rates 
and the utilisation of additional debt facilities to fund new developments, 
refurbishments and acquisitions, and was partially offset by lower funding 
rates achieved on cross-currency interest-rate swaps.

Net asset value (“NAV”) decreased by 0,9% year-on-year, from 1 751 cents 
per share to 1 735 cents per share mainly due to a reduction in the value 
of the property portfolio as a result of increased capitalisation and 
discount rates.

Distribution statement

                                       Year ended  Year ended
                                           30 Jun      30 Jun       % 
R'000                                        2016        2015  Change
Operating lease rental income and
tenant recoveries excluding straight-
lining of leases                        1 780 516   1 686 670     5,6
Net property expenses                    (613 027)   (580 756)    5,6
Property expenses excluding amortised
upfront lease costs                      (633 052)   (580 756)    9,0
Amortised lease commissions                20 025           -   100,0
Net property income                     1 167 489   1 105 914     5,6
Income from listed property
investment                                 58 045      47 388    22,5
Administration expenses                   (88 472)    (82 379)    7,4
Depreciation                                 (233)       (217)    7,4
Net finance costs                        (390 915)   (385 190)    1,5
Finance income                             10 474      10 833    (3,3) 
Finance costs                            (401 389)   (396 023)    1,4
Interest paid and amortised borrowing
costs                                    (411 767)   (401,133)    2,7
Interest capitalised to the cost of
developments                               10 378       5 110   103,1
Dividend payable to shareholders          745 914     685 516     8,8
Number of shares in issue             510 550 084 510 550 084       - 
Dividend per share (cents)                 146,10      134,27     8,8

Disposals

Properties transferred out of Emira during the 12 months to 
30 June 2016
Property                             Sector Location          GLA (m2)
Brandwag Shopping Centre and Kosmos  Retail Bloemfontein
Woonstelle                           CBD                       12 328
1289 Heuwel Avenue                   Retail Centurion           2 049
284 Oak Avenue                       Office Randburg            3 787
                                                               18 164

                                      Book    Sale   Exit  
                                     value   price  yield   Effective 
                                       (Rm)    (Rm)    (%)       date
Property
Brandwag Shopping Centre 
and Kosmos Woonstelle                 159,0   250,0    6,5   Sep 2015
1289 Heuwel Avenue                     10,0    11,5    4,7   Mar 2016
284 Oak Avenue                         22,0    23,0    7,7   Jun 2016
                                      191,0   284,5    6,5

Vacancies

                                    Number of       GLA  Vacancy
                                    buildings  Jun 2015 Jun 2015 
                                     Jun 2015       (m2)     (m2)  %
Office                                     62   395 492   30 968 7,8
Retail                                     37   408 275   11 237 2,8
Industrial                                 46   373 292    5 284 1,4
Total                                     145 1 177 059   47 489 4,0

                                    Number of       GLA  Vacancy
                                    buildings  Jun 2016 Jun 2016 
                                     Jun 2016       (m2)     (m2)  %
Office                                     61   404 081   42 225 10,5
Retail                                     38   415 242   11 581  2,8
Industrial                                 45   366 666    8 910  2,4
Total                                     144 1 185 989   62 716  5,3

Valuations
Total portfolio movement

                                                     Jun 2015     
Sector                                                 (R’000)    R/m2
Office                                              5 660 604   14 313
Retail                                              5 139 666   12 589
Industrial                                          1 940 823    5 199
                                                   12 741 093

                                                     Jun 2016     R/m2
Sector                                                 (R’000)
Office                                              5 713 237   14 139
Retail                                              5 370 812   12 934
Industrial                                          1 880 830    5 130
                                                   12 964 879

                                                  Difference Difference 
Sector                                                    (%)    (R’000) 
Office                                                   0,9     52 633
Retail                                                   4,5    231 146
Industrial                                              (3,1)   (59 993)
                                                         1,8    223 786

Debt
Emira has a moderate level of gearing with interest-bearing debt to total
property assets of 35,4% as at 30 June 2016. The Fund has fixed 93,1% of 
its debt for periods of between 0,4 and 8,4 years, with a weighted average 
duration of 3,0 years.


                                   Weighted    Weighted
                                    average     average   Amount   % of   
                                     rate %        term      (Rm)  debt
Debt – Swap                             7,9   3,0 years  4 637,1   93,1
Debt – Floating                         8,8                344,8    6,9
Total                                   8,0              4 981,9  100,0
Less: Costs capitalised not yet                         
amortised                                                   (3,7)
Per statement of financial position                      4 978,2

Worley Parsons update
As previously advised, Emira is currently in dispute with Worley Parsons, 
a major tenant at Corobay Corner in Menlyn, Pretoria, regarding its lease 
obligations contracted for until February 2022. Worley Parsons vacated the 
premises on 31 May 2015. Settlement proposals were rejected by both 
parties and the case moved to arbitration. The matter was due to be heard 
in May 2016, however Worley Parsons submitted an amendment to its defence, 
which necessitated a postponement. The case is now expected to be heard 
at the end of November 2016. Emira remains confident of its legal position. 
The contractual income due by Worley Parsons for the current period, less 
sublease rental income received, has been accounted for in the 12 months 
to 30 June 2016. All portfolio statistics mentioned in this commentary are 
calculated as if Worley Parsons had remained in occupation at Corobay 
Corner in accordance with the terms and conditions of its existing lease.

Company secretary
As previously announced, Martin Harris retired as company secretary of the 
Company with effect from 1 July 2016 and Meredith Leyds was appointed as 
his replacement.

Corporate action
As announced on SENS on 28 July 2016, the Board of Directors of Emira
unanimously rejected the non-binding expression of interest received 
from Arrowhead Properties Limited (“Arrowhead”) to acquire all or the 
majority of the issued share capital of Emira in a ratio of 1,67 
Arrowhead shares for each Emira share. The Emira Board concluded that 
the proposal was not in the best interests of shareholders.

Prospects
Macro-economic conditions remain challenging with South African GDP growth
expected to be stagnant for the remainder of 2016. The continued economic 
pressure on tenants, together with the over-supply of commercial office 
space, is expected to negatively impact rentals.

As announced on SENS on 20 June 2016 the Fund forecasts a negative 
growth in its distributions per share of 2% for the year to 30 June 2017. 
The forecast negative growth is primarily as a result of increased 
vacancies in the Fund’s office portfolio together with expected negative 
rental reversions.

The Emira Board has embarked on a strategy to improve the Fund’s 
sectorial allocations, by reducing its office exposure, to ensure that 
the portfolio is better positioned for future periods.

Emira’s Board is conscious of the Fund’s share price performance over 
the last 12 months and the divergence between the Fund’s equity value 
on the stock exchange compared to its book value. Immediately prior 
to 30 June 2016 Emira commenced an on-market share buy-back strategy 
reflecting its confidence in its prospects relative to the share price. 
This and other strategies will continuously be evaluated in the 
forthcoming period.

This forecast has not been reviewed and reported on by the Company’s 
external auditors.

Dividend distribution declaration
The Board has approved and notice is hereby given that a gross final
dividend of 75,76 cents per share has been declared (2015: 69,62 cents), 
payable to the registered shareholders of Emira Property Fund Limited on
12 September 2016. The issued share capital at the declaration date is
510 550 084 listed ordinary shares. The source of the dividend comprises
net income from property rentals, income earned from the Company’s listed 
property investment and interest earned on cash on deposit. Please refer 
to the condensed consolidated statement of comprehensive income for 
further details.

Tax implications
In accordance with Emira’s status as a REIT, shareholders are advised 
that the dividend 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 
shareholders (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 shareholder. These qualifying 
distributions are, however, exempt from dividend withholding tax in 
the hands of South African tax resident shareholders, provided that 
the South African resident shareholders have provided the following 
forms to their Central Securities Depository Participant (“CSDP”) or 
broker, as the case may be, in respect of uncertificated shares, or 
the transfer secretaries, in respect of certificated shares:

a) a declaration that the dividend 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. Shareholders 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 dividend, if such documents have not already been 
   submitted.

Qualifying dividends received by non-resident shareholders 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 shareholder. 
Assuming dividend withholding tax will be withheld at a rate of 15%, 
the net amount due to non-resident shareholders will be 64,3960 cents 
per share. A reduced dividend withholding tax rate in terms of the 
applicable DTA, may only be relied on if the non-resident shareholder 
has provided the following forms to their CSDP or broker, as the case
may be, in respect of the uncertificated shares, or the transfer 
secretaries, in respect of certificated shares:

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 shareholders 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 dividend if such documents have 
   not already been submitted, if applicable.

Local tax resident shareholders as well as non-resident shareholders 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 dividend             Tuesday, 6 September 2016
Shares trade ex dividend                   Wednesday, 7 September 2016
Record date                                Friday, 9 September 2016
Payment date                               Monday, 12 September 2016

Share certificates may not be dematerialised or rematerialised between 
Wednesday, 7 September 2016 and Friday, 9 September 2016, both days 
inclusive.

By order of the Emira Property Fund Limited Board

Meredith Leyds
Company Secretary

Ben van der Ross                           Geoff Jennett
Chairman                                   Chief Executive Officer

Bryanston
17 August 2016

Reviewed condensed consolidated financial statements

Basis of preparation and accounting policies

These condensed consolidated preliminary financial statements have 
been prepared in accordance with International Financial Reporting 
Standards (“IFRS”) including IAS 34: Interim Financial Reporting, 
the SAICA Financial Reporting Guides as issued by the Accounting 
Practices Committee, Financial Pronouncements as issued by the 
Financial Reporting Standards Council, the JSE Listings Requirements 
and the requirements of the Companies Act of South Africa. 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 2015.

This report was compiled under the supervision of Greg Booyens CA (SA), 
the Chief Financial Officer of Emira.

These condensed consolidated preliminary financial statements for 
the year ended 30 June 2016 have been reviewed by PricewaterhouseCoopers 
Inc., who have expressed an unmodified review conclusion. A copy of the 
auditor’s review report is available for inspection at Emira’s registered 
office together with the financial statements identified in the auditor’s 
report. The distribution statement was not reviewed.

Condensed consolidated statement of financial position 
at 30 June 2016

                                                      Reviewed     Audited
                                                        30 Jun      30 Jun
R'000                                                     2016        2015
Assets
Non-current assets                                  13 085 752  13 274 255
Investment properties                               11 752 399  12 035 656
Fixtures and fittings                                   67 302      55 288
Allowance for future rental escalations                292 077     286 762
Unamortised upfront lease costs                         18 101      44 387
Fair value of investment properties                 12 129 879  12 422 093
Listed property investment                             940 364     796 930
Accounts receivable and prepayments                          -      39 177
Derivative financial instruments                        15 509      16 055
Current assets                                         373 709     247 809
Accounts receivable and prepayments                    301 312     181 726
Derivative financial instruments                        16 848      12 872
Cash and cash equivalents                               55 549      53 211
Investment properties held for sale                    835 000     319 000
Total assets                                        14 294 461  13 841 064
Equity and liabilities
Share capital and reserves                           8 857 648   8 940 015
Non-current liabilities                              3 969 252   3 463 985
Interest-bearing debt                                3 944 172   3 448 396
Derivative financial instruments                        25 080      15 589
Current liabilities                                  1 467 561   1 437 064
Short-term portion of interest-bearing debt          1 034 000   1 061 965
Accounts payable                                       396 250     362 070
Derivative financial instruments                        37 311      11 252
Taxation                                                     -       1 777
Total equity and liabilities                        14 294 461  13 841 064
Net asset value per share (cents)                      1 734,9     1 751,3

Condensed consolidated statement of comprehensive income

                                                      Reviewed     Audited
                                                    year ended  year ended
                                                        30 Jun      30 Jun
R'000                                                     2016        2015
Revenue                                               1 796 951  1 811 968
Operating lease rental income and tenant recoveries   1 780 516  1 686 670
Allowance for future rental escalations                  16 435    125 298
Income from listed property investment                   58 045     47 388
Property expenses                                      (637 805)  (581 752) 
Fee paid on cancellation of interest-rate swap
agreements                                                    -    (36 641)
Administration expenses                                 (84 612)   (86 341) 
Depreciation                                            (14 840)    (9 324) 
Operating profit                                      1 117 739  1 145 298
Net fair value adjustments                              (83 347) 1 113 841
Net fair value (loss)/gain on revaluation of 
investment properties                                  (201 028)   983 226
Change in fair value as a result of straight-lining
lease rentals                                           (16 435)  (125 298) 
Change in fair value as a result of amortising
upfront lease costs                                      24 778        996
Change in fair value as a result of property
(depreciation)/appreciation in value                   (209 371) 1 107 528
Revaluation of share appreciation rights scheme
derivative financial instrument                         (25 753)     6 350
Impairment charge                                             -     (6 673)
Unrealised gain on fair valuation of listed
property investment                                     143 434    130 938
Profit before finance costs                           1 034 392  2 259 139
Net finance costs                                      (394 306)  (351 137) 
Finance income                                           10 896     10 833
Interest received                                        10 896     10 833
Finance costs                                          (405 202)  (361 970)
Interest paid                                          (401 389)  (396 023) 
Unrealised (deficit)/surplus on interest-rate swaps      (3 813)    34 053
Profit before income tax charge                         640 086  1 908 002
Income tax charge                                            (6)    (1 777) 
SA normal taxation                                           (6)    (1 777) 
Profit for the year                                     640 080  1 906 225
Attributable to Emira shareholders                      640 080  1 910 187
Attributable to minority interests                            -     (3 962)
                                                        640 080  1 906 225
Total comprehensive income
Attributable to Emira shareholders                      640 080  1 910 187
Attributable to minority interests                            -     (3 962)
                                                        640 080  1 906 225

Reconciliation between earnings and headline earnings and distribution

                                                    Reviewed       Audited
                                                  year ended    year ended
                                                      30 Jun        30 Jun
R'000                                                   2016          2015
Profit for the year                                  640 080     1 906 225
Adjusted for:
Net fair value loss/(gain) on revaluation of
investment properties                                201 028      (983 226)
Headline earnings                                    841 108       922 999
Adjusted for:
Allowance for future rental escalations              (16 435)     (125 298) 
Amortised upfront lease costs                         24 778           996
Unrealised surplus on revaluation of
interest-rate swaps                                    3 813       (34 053) 
Revaluation of share appreciation rights
scheme derivative financial instrument                25 753        (6 350)
Unrealised gain on listed property investment       (143 434)     (130 938) 
(Credit)/charge in respect of leave pay
provision and share appreciation rights
scheme                                                (4 238)        3 962
Depreciation                                          14 563         9 107
Impairment charge                                          -         6 673
Fee paid on cancellation of interest-rate
swap agreements                                            -        36 641
SA normal taxation                                         6         1 777
Distribution payable to shareholders                 745 914       685 516
Dividend per share
Interim (cents)                                        70,34         64,65
Final (cents)                                          75,76         69,62
Total (cents)                                         146,10        134,27
Number of shares in issue at the end 
of the year                                      510 550 084   510 550 084
Weighted average number of shares in issue       510 550 084   508 199 272
Earnings per share (cents)                            125,37        375,09
The calculation of earnings per share is
based on net profit for the year of 
R640,1 million (2015: R1 907,2 million), 
divided by the weighted average number of 
shares in issue during the year of 510 550 084 
(2015: 508 199 272).
Headline earnings per share (cents)                   164,75        181,62
The calculation of headline earnings per share 
is based on net profit for the year, adjusted 
for headline items, of R841,1 million (2015: 
R923,0 million), divided by the weighted average 
number of shares in issue during the year of 
510 550 084 (2015: 508 199 272).
Diluted headline earnings per share (cents)           164,75        181,62

Condensed consolidated statement of changes in equity

                                                               Revaluation 
                                                                 and other
R'000                                                Shares       reserves
Balance at 30 June 2014 (as restated)              3 435 434     3 573 200
Participatory interests issued                       360 075             - 
Total comprehensive income/(loss) for the year             -             - 
Distribution to participatory interest holders -
September 2014                                             -             - 
Distribution to participatory interest holders -
March 2015                                                 -             -
Transfer to fair value reserve                             -     1 235 555
Balance at 30 June 2015                            3 795 509     4 808 755
REIT restructure costs                                (7 881)            -
Acquisition of non-controlling interest in STREM           -             - 
Total comprehensive income/(loss) for the year             -             - 
Transfer to fair value reserve                             -       (95 503) 
Dividend paid - September 2015                             -             - 
Dividend paid - March 2016                                 -             - 
Balance at 30 June 2016                            3 787 628     4 713 252


                                                         Non- 
                                          Retained controlling
R'000                                     earnings    interest       Total
Balance at 30 June 2014 (as          
restated)                                  305 506      (1 300)  7 312 840
Participatory interests issued                   -           -     360 075
Total comprehensive income/(loss)    
for the year                             1 910 187      (3 962)  1 906 225
Distribution to participatory        
interest holders - September 2014         (309 055)          -    (309 055)
Distribution to participatory        
interest holders - March 2015             (330 070)          -    (330 070) 
Transfer to fair value reserve          (1 235 555)          -           - 
Balance at 30 June 2015                    341 013      (5 262)  8 940 015
REIT restructure costs                           -           -      (7 881) 
Acquisition of non-controlling       
interest in STREM                           (5 262)      5 262           - 
Total comprehensive income/(loss)    
for the year                               640 080           -     640 080
Transfer to fair value reserve              95 503           -           - 
Dividend paid - September 2015            (355 445)          -    (355 445) 
Dividend paid - March 2016                (359 121)          -    (359 121) 
Balance at 30 June 2016                    356 768           -   8 857 648

Condensed consolidated statement of cash flows

                                                    Reviewed       Audited
                                                  year ended    year ended
                                                      30 Jun        30 Jun
R'000                                                   2016          2015
Cash generated from operations                     1 095 408     1 037 433
Finance income                                        10 896        10 833
Interest paid                                       (411 767)     (401 133) 
Derivative acquired in respect of share
appreciation rights scheme                                 -        (3 636) 
Fee paid on cancellation of interest-rate swaps            -       (36 641) 
Dividends paid to shareholders                      (714 566)     (639 126) 
Cash flows from operating activities                 (20 029)      (32 270) 
Acquisition of, and additions to, investment
properties                                          (695 282)     (350 926)
Acquisition of, and additions to, fixtures and
fittings                                             (26 781)      (17 681)
Proceeds on sale of investment properties and
fixtures and fittings                                284 500       326 732
Acquisition of subsidiaries, net of cash acquired          -      (448 279)
Cash flows from investing activities                (437 563)     (490 154) 
REIT restructure costs                                (7 881)      360 075
Interest-bearing debt raised                       2 620 327     2 512 808
Interest-bearing debt repaid                      (2 152 516)   (2 342 551) 
Cash flows from financing activities                 459 930       530 332
Net increase in cash and cash equivalents              2 338         7 908
Cash and cash equivalents at the beginning 
of the year                                           53 211        45 303
Cash and cash equivalents at the end of the year      55 549        53 211

Segmental information

                                            Office     Retail Industrial
Sectoral segments                            R'000      R'000      R'000
Revenue                                    746 978    781 292    268 681
Revenue                                    770 255    742 686    267 575
Allowance for future rental
escalations                                (23 277)    38 606      1 106
Segmental information
Operating profit                           443 441    483 808    173 784
Investment properties                    5 713 237  5 370 812  1 880 830
Geographical segments
Revenue
- Gauteng                                  539 883    526 333    181 568
- Western and Eastern Cape                 114 938     87 319     48 500
- KwaZulu-Natal                             59 277    123 985     38 613
- Free State                                32 880     43 655          -
                                           746 978    781 292    268 681
Investment properties
- Gauteng                                4 223 137  3 875 762  1 263 250
- Western and Eastern Cape                 921 600    590 450    369 150
- KwaZulu-Natal                            402 800    691 600    248 430
- Free State                               165 700    213 000          -
                                         5 713 237  5 370 812  1 880 830

                                               Administrative
                                                and Corporate       Total
Sectoral segments                                       R'000       R'000
Revenue                                                     -   1 796 951
Revenue                                                     -   1 780 516
Allowance for future rental escalations                     -      16 435
Segmental information
Operating profit                                       16 706*  1 117 739
Investment properties                                       -  12 964 879
Geographical segments
Revenue
- Gauteng                                                   -   1 247 784
- Western and Eastern Cape                                  -     250 757
- KwaZulu-Natal                                             -     221 875
- Free State                                                -      76 535
                                                            -   1 796 951
Investment properties
- Gauteng                                                   -   9 362 149
- Western and Eastern Cape                                  -   1 881 200
- KwaZulu-Natal                                             -   1 342 830
- Free State                                                -     378 700
                                                            -  12 964 879

* Includes income from listed property investment of R58,0 million less 
  general Fund expenses of R41,3 million.

Measurements of fair value

1. 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    Total
R'000                                  2016     2016     2016     2016
Group
Assets
Investments                         940 364        -        -  940 364
Derivative financial instruments          -   28 049    4 308   32 357
Total                               940 364   28 049    4 308  972 721
Liabilities
Derivative financial instruments          -   62 391        -   62 391
Total                                     -   62 391        -   62 391
Net fair value                      940 364  (34 342)   4 308  910 330

                                    Level 1  Level 2  Level 3    Total
R'000                                  2015     2015     2015     2015
Group
Assets
Investments                         796 930        -        -  796 930
Derivative financial instruments          -   14 401   14 526   28 927
Total                               796 930   14 401   14 526  825 857
Liabilities
Derivative financial instruments          -   26 841        -   26 841
Total                                     -   26 841        -   26 841
Net fair value                      796 930  (12 440)  14 526  799 016

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 fair values of the cross-currency interest-rate swap contracts are 
valued by discounting the future cash flows using the basis swap curve 
of the respective currencies at the dates when the cash flows will 
take place.

The AUD forward exchange contracts are valued by discounting the forward 
rates applied at year-end to the open hedged positions.

The call option contracts relating to the employee share scheme are 
valued using a Black Scholes option pricing model. The expected 
volatility of the unit price of the call options was 35,8% and the 
risk-free discount rate used ranged between 7,2% and 7,7%. Management 
considers the key input in the valuation to be the spot price. A 10% 
increase in the spot price results in an increase to the call options 
of R1,8m. A 10% decrease in the spot price results in a decrease to 
the call options of R1,4m. The call option contracts have been 
classified as Level 3. During the year R2,5m of the option premiums 
relating to these contracts were amortised and a fair value loss of 
R7,7m was recognised at year-end.

The forward contracts relating to the employee share scheme are 
valued using a Black Scholes option pricing model. The risk-free 
discount rate used ranged between 7,6% and 7,8%. Management considers 
the key input in the valuation to be the spot price. A 10% increase 
in the spot price results in a decrease to the forward contracts of 
R5,5m. A 10% decrease in the spot price results in an increase to the 
forward contracts of R5,5m.

2. Non-financial assets
The following table reflects the levels within the hierarchy of non- 
financial assets measured at fair value at 30 June 2016:

                                                        2016       2015
R'000                                                Level 3    Level 3
Assets
Investment properties                             12 129 879 12 422 093
Investment properties held for sale                  835 000    319 000

Fair value measurement of investment properties
The fair value of commercial buildings is estimated using an income
approach which discounts the estimated rental income stream, net of 
projected operating costs, as well as an exit value, using a discount 
rate derived from market yields. The estimated rental stream takes into 
account current occupancy levels, estimates of future vacancy levels, 
the terms of in-place leases and expectations of rentals from future 
leases over the remaining economic life of the buildings.

The most significant inputs, all of which are unobservable, are the 
estimated rental value, assumptions regarding vacancy levels, the 
discount rate and the reversionary capitalisation rate. The estimated 
fair value increases if the estimated rentals increase, vacancy levels 
decline or if discount rates (market yields) and reversionary capitalisation 
rates decline. The overall valuations are sensitive to all four assumptions. 
Management considers the range of reasonable possible alternative 
assumptions to be greatest for reversionary capitalisation rates, rental 
values and vacancy levels and that there is also an interrelationship 
between these inputs. The inputs used in the valuations at 30 June 2016 
were the following:
- The range of the reversionary capitalisation rates applied to the 
  portfolio are between 8,15% and 16,0% with the weighted average being
  10,43% (2015: 9,52%).
- The discount rates applied range between 13,0% and 18,0% with the 
  weighted average being 15,28% (2015: 14,41%).
- Changes in discount rates and reversionary capitalisation rates 
  attributable to changes in market conditions can have a significant 
  impact on property valuations. A 25 basis points increase in the 
  discount rate will decrease the value of investment property by 
  R206,8m (1,6%) and a 25 basis points decrease will increase the 
  value of investment property by R213,9m (1,7%). A 25 basis points 
  decrease in the reversionary capitalisation rate will increase the 
  value of investment property by R216m (1,7%) and a 25 basis points 
  increase will decrease the value of investment property 
  by R204,8m (1,6%).

Fair values are estimated twice a year by Emira’s internal registered 
valuer, whereafter they are reviewed by the executive directors and 
approved by the Board of Directors. One third of the portfolio is valued 
externally each year on a rolling basis.

Fair value measurement of investment properties held for sale
The fair value of investment properties held for sale is based on the
expected sale price.

Conversion to a corporate REIT
Emira Property Fund Scheme was successfully converted to a corporate REIT
– Emira Property Fund Limited – with effect from 1 July 2015. REIT 
conversion costs incurred during the year of R7,9m have been allocated 
against share capital. The management company, Strategic Real Estate Managers 
(Pty) Limited (“STREM”) has become a wholly owned subsidiary and the 
non-controlling interest of R5,3m has been reallocated to retained earnings. 
The necessary transfers from the old Emira Property Fund Scheme to the new 
Emira Property Fund Limited are nearing completion.

Subsequent events
Prior to 30 June 2016 the Emira Board approved a programme to repurchase 
Emira shares during Emira’s closed period. In terms of the approved programme, 
Emira has to date, subsequent to year-end, repurchased 2 165 632 shares at 
an average price of 1 391 cents per share.

Directors
BJ van der Ross (Chairman)*, GM Jennett (CEO), MS Aitken**, G S Booyens (CFO), 
BH Kent**, V Mahlangu**, NE Makiwane*, W McCurrie**, MSB Neser**, V Nkonyeni **, 
U van Biljon (COO), 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 Investors Services (Pty) Ltd, 
70 Marshall Street, Johannesburg, 2001
Date: 17/08/2016 10:58:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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