Geoff Jennett, CEO of Emira, says: “Our latest acquisitions strengthen the value and quality of Emira’s equity in its US retail portfolio and take its value to $61m, or more than R850m.”
Emira’s US retail property exposure is now almost 6% of its total portfolio. This places Emira on track to achieve its goal of 8% of its total assets in the US by June 2019. The JSE-listed REIT co-invests in the US with its in-country partners, the Rainier Group of Companies.
The seventh shopping centre to be included in its US portfolio is the 150,000sqf San Antonio Crossing in Texas. The centre 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 well 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 USA in 2016/17.
San Antonio Crossing was acquired for $24m at an 8.85% initial capitalisation rate. Emira’s equity investment totals $4.15m at an 11.2% initial yield. The property transferred in February 2019.
The eighth shopping centre acquired by Emira’s US partnership is Wheatland Towne Crossing in Dallas, Texas. The 206,000sqf open-air, value-oriented centre is shadow-anchored by mega-retailer Target. It 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 $32.2m at an 8.67% initial capitalisation rate. Emira’s equity portion of the investment is $6.3m, made at an initial yield of 10.95%. The property transferred at the end of March 2019.
“Both centres further our US investment strategy and are true to Emira’s criteria of investing in open-air, value-orientated retail centres with grocery stores as anchors or shadow-anchors,” notes Jennett.
He adds, “We will continue to grow our investment in the US together with our American partners on an incremental deal-by-deal basis, targeting assets that we believe are undervalued and have secure income streams and the potential for capital appreciation over time.”