Emira Property Fund (JSE: EMI) has announced a strategic investment in the Luxembourg-headquartered Polish property developer and investor DL Invest Group, marking a significant milestone in the South African REIT’s international investment strategy. With a €55.5 million investment, Emira has acquired an effective 25% initial stake in DL Invest Group, which has a gross asset value (GAV) of approximately €730 million and a net asset value (NAV) prior to Emira’s investment of approximately €278 million. Emira’s equity interest has a face value of €101.5 million. Additionally, Emira has secured the option to acquire a further interest for €45.5 million, which, if exercised, would result in Emira holding 45% of the issued shares of DL Invest Group.

This initial strategic move immediately increases Emira’s international investments to 32% of its portfolio—19% in the US and 13% in Poland—while 68% remains in South Africa, further strengthening its investment diversification.

Geoff Jennett, CEO of Emira Property Fund, highlighted the importance of timing and partner selection:
“We’ve taken the time to find the right partner, and for us, this is the right way to enter this economy at the right time. This method of capitalising on opportunities in the growing Polish economy aligns with Emira’s co-investment model, which the market is familiar with, where we mitigate risk as a minority partner with solid protections paired with an established local specialist seeking similar outcomes, resulting in informed investment decisions and improved returns.”

DL Invest Group: A Strong Player in Polish Real Estate

DL Invest, a wholly owned subsidiary of the DL Invest Group, has been active in the Polish commercial real estate market since 2007. It boasts a robust portfolio of circa 50 properties, including:

• Logistics facilities (75%)
• Small retail parks (15%)
• Mixed-use office/retail spaces (10%)

With a strong multinational tenant base, DL Invest Group manages these assets with approximately 232 employees, showcasing the strength of its founder-led private company. This capital injection from Emira will support DL Invest Group’s logistics warehouse development pipeline, positioning the business to reach €1 billion in value.

Attractive Returns and Strategic Involvement

For Emira, the investment is structured to yield an attractive Internal Rate of Return (IRR) of approximately 20.9% in Euros over five years, with an annual cash yield of at least 7.2%, escalated by the Harmonised Index of Consumer Prices for the European Area (HICP) between 2% and 4%. The investment will be funded through Emira’s balance sheet, using available debt facilities and proceeds from recent disposals.

Emira will secure a director’s seat and an observer’s seat on the DL Invest Group board, ensuring active participation in strategic decisions. This partnership blends Emira’s listed property expertise with DL Invest Group’s on-the-ground experience in Polish real estate, creating strong synergies and a promising collaboration. Emira has committed to an initial investment period of five to six years, with the potential to extend the partnership beyond that timeframe.

Jennett concluded:
“For Emira, taking a stake in DL Invest Group provides security of sector, country, company, and returns. We are excited not only about the diversification for Emira but also about co-operating with DL Invest Group to maximise what we can achieve by playing to our strengths together.”

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