Emira Property Fund has made two further equity investments into grocery-anchored dominant shopping centres in Texas, in the US.
Emira has now assembled a portfolio of eight value-focused retail centre assets in the US.
CEO Geoff Jennett said the latest acquisitions strengthen the value and quality of Emira’s equity in the US retail portfolio, and that the acquisitions take the US portfolio’s value to $61-million, or more than R850-million.
Emira’s US retail property exposure is now almost 6% of its total portfolio, and places Emira on track to achieve its goal of having its US assets account for 8% of its total assets by June.
The JSE-listed real estate investment trust co-invests in the US with its in-country partner, the Rainier Group of Companies.
The seventh shopping centre to be included in its US portfolio is the 150 000 ft2 San Antonio Crossing, which is 100% let and 88% occupied by national tenants and has a 7.6-year weighted average lease expiry (WALE). It is shadow-anchored by Texas-based grocery chain H-E-B Plus!.
The shopping centre is located at one of the busiest intersections in the high-growth area of San Antonio, which has a population of 1.5-million people, a diversified economy, and was the fastest growing city in the US in 2016/17, Emira said.
San Antonio Crossing was acquired for $24-million at an 8.85% initial capitalisation rate.
Emira’s equity investment totals $4.15-million at an 11.2% initial yield. The property transferred in February.
The eighth shopping centre acquired by Emira’s US partnership is Wheatland Towne Crossing in Dallas, Texas. The 206 000 ft2 open-air, value-oriented centre is shadow-anchored by megaretailer Target, and is 99% occupied and 90% let to national credit tenants. The centre has a WALE of 4.4 years.
Wheatland Towne Crossing is situated at a major highway interchange in Dallas-Fort Worth, which is the fourth largest metropolitan area in the US, and the country’s largest inland metro.
The retail centre was acquired for $32.2-million at an 8.67% initial capitalisation rate. Emira’s equity portion of the investment is $6.3-million, made at an initial yield of 10.95%. The property transferred at the end of March.
“Both centres further our US investment strategy and are true to Emira’s criteria of investing in open-air, value-oriented retail centres with grocery stores as anchors or shadow anchors,” Jennett noted.
He added that Emira “will continue to grow [its] investment in the US together with [its] American partners on an incremental deal-by-deal basis, targeting assets that [Emira] believes are undervalued and that have secure income streams and the potential for capital appreciation over time”.
At December 31, 2018, Emira’s directly held assets comprised 104 properties valued at R12.5-billion.