Broadcast Type: Interview; Tags: Joined, Jeff, Janet, Emira, Property, Fund, Jeff, Making, Time, Cnbc, Viewers, Jump, Straight, Forty, Point, Jump, Revenue, Year
up next i'm joined by janet the c jeff e o of emira property fund jeff thank you so much for me joining and making the time for cnbc viewers let's jump straight into the significant forty four point one jump in revenue at the same this year but time you look at a despite the increase is a decline per share of about in earnings please forty nine point three paint the picture for understand what us so we happened sure so it's quite as a property important company a retail investment real estate trust that we are particular judged by a metric we call distributable income per share the the traditional earnings per share into account always takes the movements on our balance sheet and that includes property revaluation revaluation up and property down so this period has been impacted that has been impacted by that and particularly by the estimated credit loss provisioning that we've made against one of our b we've loans that had in place so so we don't see that being a a meaningful measure terms of earnings per in judged share what we are on is our distributable income per share and as we share a year ago we had planned a target eighteen of a hundred and point four three cents per share this year we are and and nineteen arrived at a hundred point o two cents per share in addition to that we've declared our final dividend of fifty five cents full year which takes our dividend up to seventeen a hundred and point o two tagsent our share relative to where prices thank you geoff let's it down to the actual break performance so know you how did you manage from an operational point of view to go beyond expectations know how does you the strategy lead metrics into the that you were using to you know to measure how to improve performance despite being a very it tough year last year i think so the key thing here a mirror manages is how its properties we've been doing this for a long time great we've got a team we spend money on our properties and all of that has meant a vacancy that from perspective this time last year overall diversified our portfolio had a four point percent vacancy seven that's now sitting one at four point percent so that you that if you can only do are doing the right things you are letting your your spaces good we've seen improvements so across all of those individual sectors of office retail and industrial in addition to that our residential portfolio you will recall that we started to consolidate transcend ago a year that's the residential portfolio that we bought and that vacancy is only sitting at point six percent two good so both of those are measures which if your let properties are well them your income can grow and if you then manage your costs have side as we then then then you're going okay i think this to be year when we had signaled to everybody that a forty when you run on two percent loan to value we are at the moment as it's the of interest effect rates is significant to when it comes what that net distributable so we've income is and certainly seen close to two percent higher interest rate charges in year in in a and so that certainly had on that impact us in terms of of lowering that growth could what have been but notwithstanding if you that do the right things you are aware of what you're doing you set yourselves good targets you've got a team well that operates you do the basics certainly well and we do do that position where then you're in a you can deliver good consistent as results we here but we are still a tougher broader in economic and market conditions it does not look and for like it's letting up the year to come of your what are some strategies for growth you'll be that you believe putting in that d to enables you continue this type of performance ja zanele so great question because you would have in our results seen announced as well as that we've disposals that we've contracted for tune to the of about two point four billion rand in addition to close to hundred million of property transfers that happened in this last financial year and the question is going to do with that what are we the opportunity so we get to sell out of directly held south african assets that will drive our overall portfolio value down from just over twelve billion down to just below ten billion the question and then do is what are we going to with those funds and for us diversification is very important we've only got our nineteen percent offshore investments into the united states does very well which for us but want to increase we certainly that percentage exposure to offshore jurisdictions to stronger to stronger economies they a different growth have profile to what we have here in south africa so once those funds come in which will happen in the next six months you're then going to see private into a most most likely offshore jurisdictions where we enter despite growth to be better sub into sectors that we think are more undervalued and then that that our will then mean that offshore diversification will be greater certainly and we believe that that together with our south african remaining portfolio will collectively be drive able to meaning for growth in our trajectory of value of that we deliver of our shareholders through to all speaking of that last you mentioned i think point the the the market dynamics that come into play of what's your view the south african environment and where you see you you know additional growth opportunity your assessment in because i see that industrial residential no property this year as it you entered into you're starting is there room there because for growth maximised it did not look like it its value ja so our venture transcend into which is managed by i h s is in the lower to middle s m value orientated residential market and we've also the past in two years converted an called office building the bolton from an office building into residential and we've we we are those only owning properties that generate round about percent yield a nine we've gone to the extent now section policing of some of those properties we've sold off those and individual units you're and when selling off those individual units to individual buyers the you then better end up getting a price per unit at it that when you look collectively means that you've actually a building that got was generating a nine percent yield you get to trade about it out at twenty percent premium because of individual owners home wanting to buy their own individual and there's a market units for that we've sold five hundred and forty units twelve in the last months and and and that's your means to to recycle so we certainly terms of think in that strategy on the on residential the side that that's certainly value creative and that then gives you a cash go and buy the next bar to example building at for a nine percent yield and it then secondly takes time on and then sell it off an individual basis so so so that side in from the south african market see there being some scope we and we'll continue under that side you'll have seen industrial that our vacancies dropped out percent down two point seven twenty eight of our thirty two properties are fully fledged and so that's low number a particularly so there's certainly appetite the industrial there on side retail also vacancies low at the three down seven percent side and the offices vacancies have dropped down to ten point nine percent and so so those are all heading in the right direction so as as there are headwinds much in south africa and headwinds in terms of municipal costs increasing what you above can recover from your tennis we're we're okay with that and but that having said that's why we're also looking offshore for further diversification so that we can manage to the extent it that there's those headwinds continue you know i've watched the development bolton of the one thing that we don't recognise just how much is time it takes mean i watched cos i it for very was probably more long it than a year also interesting but what's is the strategic location of your your investments and explain it's hard for me to it but it's it's the periphery the middle class of sort of busy it's not areas but c b d classify how would you where you invest i just i have the words for it don't so so me i think it's quite important for you make that when your investment you assess around what's happening you and you can go right the middle of a particular into area and pay the highest price or outside you can go right the area and pay but often the lowest price it's actually somewhere the periphery that's just on that's in the residential side of in the semi sort suburban side and that you then get the so worlds and best of both and in the bolton and in certain some of our transition properties well those are located from that side that then enable you to have options and i think that that's very very important that you've got options that you bought cleverly you bought wisely terms of in of the position of the building and that you then willing to embrace strategies different like we have in terms sectional title of the units selling off title unit on the sectional basis which zanele as you said takes a long time but doesn't that hard road scare us because it's something that we do and we know how to do we do it very well and and does take but it time and then when it comes through again you benefit benefit and that's for the of all our stakeholders thank much for making you so us educated investors because have to invest we in something hopefully something we like and we see as well view that's my thank you for your time geoff janet the ceo of emira property fund let's take a quick break i'll be back shortly with you