Tech constructs of the SA REIT landscape

A look into who is faking #IT and making #IT in this new tech age

Part 2 of 5: Emira Property Fund

Welcome back to our series of five articles on the keywords SA REITs should consider more often in this day and age.

IARs are produced every year in the listed property industry. This is mandatory. The info in IARs allows the public to have a view as to why they should buy, hold or sell that company’s particular share on an exchange. They are, in essence, there for everyone to have a view on how that particular company has done over the last year, with the results they produce and – especially in the REIT space – dividends declared.

However, they are also there to have a look into what strategy that particular REIT will effect over the next year and in the years to come. The IARs allow participants in the marketplace to decide whether there is upside or downside in buying, holding or selling that particular stock.

Let’s use an example:

  • Said company has produced okay results, but has declared no dividend. Why?
  • Said company said in its IARs that it would rather use that money to reinvest in projects that it believes will created more profit in the future.
  • Said project is all about the exploration of Mars and minerals on the planet that go for a pretty penny on earth.
  •  Now, you read their annual reports and decide for yourself whether the project and the profits from such a project are achievable.

We would like at this point to shout out as LOUDLY as we possibly can: “YOUR CALL!”

But, we would remind you that one of the most impressive share performances on Planet Earth over the last five years was a little company called Tesla. You get the picture, right?

IARs tell a story of past performance, but are also there to tell a story of future performance. And, are there to entice you into a buy, hold or sell, depending on your beliefs as to whether that particular company can produce the goods.

SA REITs produce these bad boys every year,   and we proposed in our series of articles to analyse REITs with a Proptech magnifying glass. We kicked off the  proceedings with Accelerate Property Fund – and it was quite a journey.

At this point we’d like to state that, yes, our analysis of them was harsh, but as we proceed in this series of articles you will see that that harshness is not isolated… it’s systemic, it’s across the board. REITs are not taking Proptech seriously!

Also, we would like to point out that our bias is pro-Proptech and that we accept that those who do not agree with the future of Proptech, may view our comments in a different light.

Onward with our journey… to perhaps a happier place when it comes to Proptech and attitudes to it.

This month let’s look at Emira Property Fund.

 Now, we have analyzed these guys before []and to be completely frank, we were impressed. But, for the sake of the analysis let’s complete the loop.

Emira Property Fund:

Proptech – occurred 0 times:

  • The word ‘Proptech’ was not mentioned in Emira’s IARs. Is this a problem? We think not as they address many elements of Proptech in the rest of the verbiage in their IAR;
  • So, not a shocker, but interesting as to why they do not. Is it an association issue that organisations are not matching the word with the action? Or is it a case of we act rather than talk about it?

Technology etc. – occurred 22 times:

  • Emira, unlike Accelerate, have called a spade a spade (see paragraph below). How? Well, Emira concede the fact that technology and its capabilities have now changed how retailers do their business.
  • Emira (quoted from IAR 2020): “Due to the national lockdown, many shoppers became cautious of visiting retail centres, and their buying behaviour notably changed as a result. Likewise, the enforced practice of social distancing influenced the way consumers shop. With a reduced average number of visits to shopping centres and retail outlets, consumer spend per visit increased.This change in consumer behaviour had a direct effect on retail sales. In response, retailers had to rapidly adjust the way they do business by fast-tracking their online shopping and delivery offerings through improved capabilities and technology.”
  • In the paragraph above, technology is mentioned as being an enabler to change. Whereas Accelerate only mentioned that it could be a disruptor – disruptor in the sense that it may disrupt their business model. Emira are therefore ahead of the game on this.

(Isn’t it amazing how words can identify frailties in strategy?)

  • Emira have throughout their IARs spoken about how they have invested in technologies to track consumption of energy and water as well as new initiatives such as LED light technology to green their portfolio. This proves that they understand how tech can influence greening decisions… and ticks a box when it comes to Proptech.
  • Lastly, Emira have identified technology as a skill set that is needed on their board, through employing a non-executive in this position. This is, in our opinion, a game-changer as the skill set of the executive team member (G. Booysens) is matched with the non-executive (Jasandra Nyker), and hence there are two  members of the executive that can effect technology projects (as displayed below).  Whether this entails using tech to green their portfolio or investing in intangible assets, as an executive you can use a person on the team as a sounding board for tech projects. That’s savvy, right? Nice one Emira!

Innovation etc. – occurred 3 times:

  • The more prevalent occurrences of the word:
    • “In the current environment, lease periods are becoming shorter, with lower annual escalations. To mitigate these effects, Emira’s team structure includes broker consultants who maintain the key relationships with external brokers and facilitate leasing to tenants across the portfolio. The team put together innovative leasing deals for both new and existing tenants. For the year under review, Emira’s weighted average lease expiry (“WALE”) for its direct portfolio is 2,7 years (June 2019: 3,0 years; Dec 2019: 2,9 years).”
    • “Emira’s Intelligent Relocation programme  is an innovative leasing incentive package, offered on selected buildings to new tenants seeking quality office and industrial space. The incentives allow tenants to relocate easily by choosing a deal that is best suited to them — one that offers competitive rentals, attractive benefits in prime locations and makes relocating an intelligent choice.”
  • Our commentary on Emira’s innovation:

Interesting… innovation was mentioned only three times with the lion’s share under the auspices of leasing specifically. We believe this is because Emira have already, in prior years, showcased their innovative ways of interacting with external brokers in the network. To see more details on this, please see the article written about this [The Rise of the Phoenix].

Note: nothing is mentioned re. innovation and strategy. This showcases what the term ‘innovation’ means to the two companies we have now looked at.

Accelerate = innovation re. strategy for portfolio diversification vs Emira = innovation re. leasing strategies. Please note, we are not making an observation as to which one is better, we are simply showcasing what innovation means to each company. 

Why oh why not connect innovation with the word technology? Is there a gap in one’s business strategy here?

Our thoughts: DEFINITELY.

We will see from the analysis below that other REITs mention buying in intangible assets to make their business models more flexible. But more on this later. It is even more curious as to why no visible correlation exists between property, innovation and tech = Proptech.

Social Media – occurred 5 times:

  • Emira states: “The rise of social media has seen a growing influence on the world of business. To stay up-to-date, relevant and in touch with brokers, consumers and communities, Emira has accounts on Instagram, Facebook and Twitter.”  Great, so you can catch up on Insta!
  • To this end they state in their IAR that they engage with the tenants, property managers and external brokers both directly and indirectly. Indirect methods of contact include electronic and social media. (We note this specifically because the article we wrote for Emira was reposted on LinkedIn by Emira itself. Big ups!)
  • Lastly, a sweet spot is Emira’s ability to link social media with the external broker network. They surely are the preferred landlords to work with in South Africa. Why? Because they are constantly in contact with their brokers. How do they do this? Through their app.

Also note their broker incentive programme and how it is advertised through social media platforms.


While the above-mentioned words weren’t found too often in Emira’s IARs, it is not a shock to us. Why?

Because, much of Emira’s attitude to innovation and technology has been dealt with in prior IARs, and they deal with it in their day-to-day operations already. In other words, it is not something they need to explicitly state in their financial statements over and over again. Thus the words aren’t mentioned too often. They have already been doing it [and we’ve been noting  it –] for quite some time already through the launch of their app years back.

It is therefore our opinion that Emira is on the right path with respect to their attitude to Proptech  and innovation. Why? Because they are on the path already.

Going forward we take aim at: Growthpoint, Hyprop and Redefine.

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