Octodec Investment says Emira' Property Fund's offer undervalues its shares

Octodec Investments, the JSE-listed REIT that owns properties in the main metroppolitan areas of Johannesburg and Tshwane, said its directors did not intend to sell their shares to Emira Property Fund, as Emira’s offer undervalues its shares.

Emira announced on April 13, 2026, that it had acquired through an owned subsidiary, Freestone Property Investments, some 53,698,356 Octodec shares, representing a 20,17% shareholding, for R891,77 million, in a series of off-market transactions.

Emira also said it plans to acquire a further 39,2 million shares in Octodec for R16,75 per share cash, which, if accepted, will bring its stake to 34,9% in Octodec. This would be below the 35% threshold, where Emira would be obliged to make a similar offer to all of Octodec’s remaining shareholders.

Octodec’s directors said on Wednesday they were informed by Emira of the acquisition only shortly before Emira published the details of its share purchases, and they “were not formally engaged by Emira in advance of its launching the voluntary offer.”

The board said, however, they would seek to engage with Emira, as a significant minority shareholder, “in the ordinary course and subject to the board's fiduciary duties.”

Emira CEO James Day said in the announcement however, that as a significant minority shareholder, “Emira will seek to engage with Octodec on initiatives to create value within the portfolio.” Emira’s offer closes on May 8.

JSE and A2X-listed Octodec has a portfolio of some 219 residential, retail, office, and industrial properties valued at R11,2 billion. Emira holds retail, industrial, and office properties in South Africa, and a stake in SA Corporate Real Estate. It also holds shareholdings in six grocery-anchored centres in the US, and a 45% stake in an industrial and logistics centre development company in Poland.

Octodec’s board said they noted that Emira considers its investment in Octodec "to be consistent with its investment strategy of deploying capital into meaningful, value-accretive opportunities, specifically by acquiring strategic, cornerstone stakes in listed and unlisted property companies at discounts to the reported value of their underlying property portfolios."

The directors said they believe that Emira’s voluntary offer “undervalues Octodec, with the offer consideration being at a significant discount to the reported net asset value.”

As such, the directors who were shareholders did not intend to dispose of any Octodec shares under the voluntary offer.

Last August, at the end of Octodec’s 2025 financial year, its net asset value was R24.55 a share, which had increased from R23.97 a share the previous year.

Octodec’s directors said they continue to actively dispose of non-core properties to reduce gearing and deploy capital into yield-enhancing initiatives, “which the board is confident will successfully reposition Octodec over the medium- to long-term, creating and delivering sustainable value to its stakeholders.”

Octodec expects to publish its interim results for the six months to February 28, 2026, on May 12, and further updates were expected to be disclosed on its iniatives, the board said.

Emira’s share price has fallen since April 13, when it first announced its offer, from R15 to Wednesday’s R14,67. Octodec’s share notched up to R17 since April 13, when it closed at R16,75.

In its last financial year to August 31, 2025, Octodec increased distributable income per share by 8,2% on the back of a resilient portfolio performance. A final dividend of 72,5 cents per share was declared, taking the total dividend for the year to 134,5 cents, a 7,6% increase on the prior year.

Octodec joined the FTSE/JSE All Property Index (ALPI) and the SA Reit Index in March, which the South African Multifamily Residential Rental Association said was evidence of the growing relevance of multifamily residential rental property as a core real estate asset class. Residential generates 35% of the group's rental income across some 9,300 units.

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