Emira Property Fund expects competition to retain tenants to rise
Emira says the Omicron Covid-19 variant has created uncertainty, which could derail both domestic and global economic recovery
Andries MahlanguPicture: 123RF/ALAN BILSBOROUGHEmira Property Fund expects competition to either retain or attract new tenants, to persist among landlords, resulting in negative rental reversions where leases are renewed at lower rates.In an operational update on Wednesday, Emira said the emergence of the Omicron Covid-19 variant had created uncertainty, which could derail both domestic and global economic recovery.
Its negative rental reversions were at 12% in the four months to end-October, slightly better than 14% at the end of June, when the fund reported its year-end results. Rent remissions provided to tenants affected by lockdown restrictions as a result of third wave were R1.9m, from R33.60m in June.
Emira has 78 directly held properties valued at R9.9bn in SA and equity investments into property-owning companies valued at R2.5bn, which includes 11 grocery-anchored open-air convenience shopping centres in the US.The office portfolio accounts for 31% of Emira’s directly held assets, while retail accounts for 49% and industrial 18%. headtopics.com
Vacancies in its office portfolio shot up to 19.4% during the review period, from 17% in June, with the fund retaining just 66% of those tenants whose leases matured, while struggling to attract new ones. Negative rent reversions were at 15.5%.“The catalyst for change in the sector is economic growth, which will improve business confidence and result in the investment and an expansion of businesses, ultimately increasing the demand for space,” the company said.
However, vacancies within the retail portfolio held broadly steady at 4.3% from 4.1%, with the fund managing to retain 91% of tenants.The industrial portfolio also held up despite intermittent electricity interruptions. Vacancies held steady at 3.6% and 91% of tenants whose leases expired during the period were retained.Read more: Business Day »
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