South African real estate investment trust (Reit) Emira Property Fund on Wednesday declared an interim dividend of 70.65c a share for the six months ended December 31 - a 2.5% year-on-year increase.
The fund returned to positive distribution growth in the period owing to the significant leasing progress made, better use of capital, as well as stringent cost control.
"This was achieved despite continued tough trading conditions, where the ongoing oversupply of offices has required us to be more competitive by reducing rentals and increasing tenant incentivisation," the fund said in a statement.
Meanwhile, the fund reported a 5.6% fall in revenue, owing to the disposal of 15 properties and the deconsolidation of Enyuka Property Fund. However, this also resulted in a 10.2% decrease in property expenses.
Further, Emira's stable portfolio performed well, with a "pleasing" like-for-like growth of 7.9% for the six months, driven by contractual escalations and the filling of vacancies.
The fund also reported notably lower vacancies, having implemented an intelligent relocation initiative, resulting in a decrease from 7% at December 31, 2016, to 4.5% at the end of the period under review.
Urban retail sector vacancies have decreased to 2.2%, well below the national average of 4.2%. While industrial vacancies have increased marginally to 2.1%, it remained below the national average of 3.5%.
Emira's office sector vacancies have significantly improved, decreasing to 9.4% from 16.1% and the fund continued to "aggressively" manage its vacancies through a combination of tenant retention and letting strategies and, in some instances, the sale of noncore properties.
In line with its strategic priorities, a total of 77% by gross lettable area of expiring tenants were renewed and retained during the six months.