Broadcast Type: Interview; Tags: Improved, Vacancy, Levels, India, Eleven, Jump, Net, Property, Income, Emira, Property, Reported, Eighteen, Decline, Distributable, Earnings, Impact, Sale, Rural, Retail, Owner, Property, Fund, Slimmer, Income, Geoff Jennet
welcome back well despite improved levels vacancy and india eleven percent property jump in net income emira property has reported percent an eighteen decline in distributable earnings this is mainly due to the impact of its rural retail sale of owner you got property fund income from slimmer its u s investments monetary and tight policy when i joined by the company ceo jeff janet for greater insight interim on the period thank you so much time for your geoff now that's actually putting start off with the magnified glass on south were the highlights africa what and lowlights in period this reporting so i think the highlights our are that overall vacancy rate reduced down to four point one percent across our commercial portfolio being retail office and industrial the star on performer was the industrial side down where our vacancies are to just over half a percent i think that's a really so strong number then i think and the other one also just to sort it included in the residential this is on side we've completed are acquisition of now the scheme of arrangement of transcend the vacancies and in that portfolio together with bolton that the we then also own are in the low three sitting and a half percent and that includes specific units that we vacant kept in order to facilitate the sale so side i think from a south african that's been side strong i at the think if you look office vacancies where there's continual stress because of the oversupply i and the slow economic growth we've also approved there as well a little bit half from the twelve and a down to the twelve percent side retail still very strongly in the low three is so i think from the from that side still doing fine but still consistently the one that is there we've still got negative rental revisions of close to six can understand percent and you why because if you've got example a three for year rental growing list that is by seven percent per annum over three years the and the market only five growth rate is percent then you're gonna mathematically a six percent have drop every three years so that's and what we're still experiencing only going to and that's change when market conditions and gdp growth comes through of course the other one is load shedding our load shedding are still there costs even though how our recovery rate is high but fortunately that they as bad weren't as what we had for actually planned so so that's a little plus jeff of course the transcend arrangement was concluded and i just want to know your expectations the full flow on of that to your bottom line ja so at the moment it's little bit complicated a because you can't quite compare like for like in certainly with the change in the year end certainly but i mean it's going to be income a creative the because income yield that properties we earned from those are in excess of capital our cost of i'm so that's been that's a thing but good this but we're doing same basically the as what we've done under the which bolton is where we centralising certain units we're getting to sell them off and premiums it at in other words at lower yields then we'll use and that cash to lower cost of debt the which will then obviously to the bottom add line so that's a good thing so so i think he can start to see you'll that in financial forward periods going ja zooming into office your reduced vacancies have but only slightly and i'm wondering these levels if are the levels that expect to be we can on for a while so i think it's not going to change much from these that levels and until to get some you start meaningful economic growth so um if you just and go back a of years couple and so on and the height of covid them in that blew out significantly so i think it twelve percent wrong with twelve there's nothing percent draw obviously would like single digits but i think to the we're starting get more towards the bottom maybe or or even at the bottom are but we certainly and at the levels that are likely to persist around this level for the few next years women's well its cross over the u s i to a mean you talk about larger tenant failures there just just shed some light on that for us that and how has translated for emira ja so so in the u s portfolio there were were two particular there bankruptcies that impacted three us ludwig one was bed bath beyond one was earth the other fair and then party city so those three impacted us and and for me what that meant is that point six percent our two vacancy has increased point six to three percent vacancies number it's not a big it's about three and a half thousand square metres out of collectively fifty three hundred and thousand square metres so so it but that's the usual to true and that you're going have in a economy that actually bankruptcy embraces is only going to see that that's why it and your vacancy rate low in is so the low twos you can that going expect forward alright and of course rates are interest a big headwind for a lot of companies including a property companies course and of that affects your unabridged portion of debt what your is the weighting of that hedge portion and how much pressure did the high interest rate environment exert on that heads so our portions about thirty percent of our debt total which if you go six billion rands worth of total debt thirty percent that's one point of that eight billion rand that one point and on eight billion rand if you go back to the beginning of the comparative period in terms of june july twenty two and we've had three and a half percent increases you can understand at half percent increases three and a obviously that happens well gradually as though but three one and half percent off point eight billion is number is a meaningful and that's what what added to it so it's that's the extent we and i think is not going to change much because if you look at the banking what forecasts and people are predicting it's be cut by only going to maybes fifty two hundred to a hundred and twenty-five bips next year ja alright well thank you so time and much for your giving us insight into those numbers that came out of emira jeff that the ceo of was emira jeff jet it over moving