Strategy
Merger integration
Redefine’s aim is to consolidate the expanded portfolio as quickly as possible to ensure the economies of scale and cost savings will be realised from early in the 2010 financial year. Accordingly, the business has been restructured to increase efficiencies. The company will also formally change its name from Redefine Income Fund Limited to Redefine Properties Limited, and intends to transfer all properties from subsidiary companies to Redefine Properties Limited.
Investments in listed securities
In addition to investments in fixed properties, Redefine is invested in strategic listed property securities. Investments in other listed property companies will be actively pursued for strategic purposes or if there is an opportunity for corporate action.
Growing income
The company’s primary objective is to grow income for its investors. Distributions are paid on a quarterly basis. Growth in income and distributions will be achieved through:
- Organic growth from the core property portfolio;
- Increased distributions from strategic listed securities;
- Yield enhancing acquisitions and disposals;
- Development or redevelopment of properties to add value to the portfolio; and
- Containment of costs.
Managing risk
Redefine has increased the size of its portfolio which significantly reduces risk due to:
- The number of properties owned;
- Their location throughout South Africa;
- The spread between office, retail and industrial; and
- The large number and quality of tenants within the portfolio.
The investment committee, a sub-committee of the board, approves all acquisitions and disposals based on a stringent technical and financial due diligence process.
Redefine has a conservative debt profile, with a current loan to value ratio of 26%. The company actively pursues the lowest cost of finance and fixes interest rates as low and for as long as possible.
The company’s lease expiry profile reflects that approximately 29% of the lettable area expires in the next financial year. The company has leasing teams internally and at its property managers and also makes use of independent brokers. The strategy is to secure large A-grade tenants where the likelihood of renewal of leases are high.
Offshore strategy
Redefine has invested in offshore property companies to further diversify risk and to provide a hedge against rand weakness. Its initial offshore investment was through Ciref. As a consequence of the merger with Madison, Redefine has acquired a 34% holding in Corovest Fund Managers Limited, the asset manager of Ciref plc and Wichford plc. The strategy is to continue increasing its offshore holdings.
Re-engineer Property Management
Following the merger, Redefine is researching alternative and more beneficial ways of property management. The re-engineered process will result in considerable financial savings and efficiencies from mid 2010.
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