Redefine’s ISIN will change to ZAE000143178, while the short name (Redefine) and share code (RDF) remains unchanged.

The name was changed to more clearly describe the essence of the core business and its underlying assets, but the company is still focused on growing income for investors. 

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Redefine Joint CEO, Wolf Cesman, says the decision to internalise the property management function – which is currently outsourced to Broll Property Group – emerged from a process arising from consolidating and integrating the business since the merger with ApexHi and Madison last year.

“The new structure will necessitate set-up costs and increases in both staff costs and direct expenses, but greater direct control over the operational management of the properties as owner and landlord is the objective,” he says.

Other benefits include the streamlining of business process, which will improve turnaround times in service delivery and efficiency, and reinforcing direct relationships with tenants.

The property management division will be established under the leadership of David Rice, Redefine’s director responsible for operations.

Rice says the size and scope of Redefine’s property portfolio, which comprises more than 400 properties in nine provinces, necessitates a hands-on property management approach. “The design and implementation of the sophisticated IT system required to administer the property portfolio is already well underway. Through automating reporting, the IT system will provide efficient, usable and accurate information to the business, allowing staff to manage property rather than paperwork,” he says.

Pieter Strydom, currently an asset manager at Redefine, has been appointed to head the property management division and Redefine financial manager, Aaron Suckerman, will head the finance and administration division. Rice says the company will recruit the highest caliber of experienced management and staff to make up a dedicated and committed quality team.

The process to move the property management in-house to be located at the group’s head office in Rosebank has been set in motion and is expected to be fully implemented by the end of November 2010.

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Redefine acquired Linpac Packaging – an industrial property in Cape Town – for R100-million, and an Edgars retail property in Johannesburg for R105-million.

Agreements have been signed to purchase the Deneys Reitz office building in Sandton for R127-million and Cornerstone House, an office complex in Crown Mines, for R182-million. These acquisitions are subject to Competition Commission approval. 

Redefine executive director, Mike Flax, says the company’s acquisition strategy is to focus on A-grade properties with values in excess of R50-million, located in core markets. “We foresee the average acquisition price exceeding R100-million, which will enhance the quality of the portfolio, increase the average property value and diversify the fund’s income base across different asset classes and core markets,” he says. 

Redefine added to its industrial portfolio, with the acquisition of the Linpac Packaging complex in Montague Gardens for R100-million. The complex consists of four high quality buildings with a combined lettable area of 34 000m². The complex is currently let on a triple-net lease for a period of 10 years, with an initial yield of 10,6%. 

Redefine acquired a 16 867m² retail building let on a triple-net lease to Edgars as the head lease tenant for 10 years at an initial yield of 10,9%. 

The Deneys Reitz building is being acquired on an initial yield of 10% and provides 8 300m² of office space in the heart of the Sandton business district, diagonally opposite the JSE. Deneys Reitz will continue to occupy the building until October 2010, when it relocates to newly developed premises. Redefine is planning to upgrade the building once the tenant vacates, and is confident it will be re-let once the upgrade is complete.

Cornerstone House is being purchased for R182-million with an initial yield of 13,1%. The modern, state of the art office building offers 12 000m² of office and ancillary space on a stand-alone site within the De Beers business complex near Crown Mines. The property fits the profile of properties in the Redefine portfolio. The lease with the single tenant expires in 2015, with a perpetual option to renew.

Flax says that aligned with the acquisition strategy, Redefine will also look to gradually dispose of non-core properties that do not hold strategic value. “Some of the properties valued at less than R50-million will be sold, as well as properties located in non-core markets with declining growth prospects, or properties geographically located in markets that do not allow for ease of on-site management,” he says.

Since 1 September 2009, Redefine has transferred four non-core properties with a value of R52 million on an aggregate yield of 9,3% and has disposed of a further five non-core properties for R109,2-million. Two vacant industrial properties in Epping, namely Premquip building and Meditek were sold for R17,3-million and R19,4-million respectively. In the office portfolio, Stansure House in Braamfontein was sold for R20,5-million, Union Club in Durban was sold for R12-million and Northstate in Johannesburg was sold for R40-million.

“The properties posed probable risk in terms of prolonged and increased vacancies, or in areas of decreasing economic growth potential, and offered no feasible redevelopment opportunities. The properties were all sold in excess of book value,” says Flax.

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This post-merger distribution reflects a 28,8% increase on the comparable period distribution of 13 cents per linked unit which was pre-merger.

Redefine joint CEO Wolf Cesman says the increased distribution reflects the benefits of the merger for Redefine unitholders and is in line with its forecast.

Net property income exceeded budget and management contained property expenses at 19,8% of revenue.

Cesman says property fundamentals continue to reflect tough economic conditions, but the Redefine portfolio has weathered the downturn satisfactorily. “Arrears are slowly improving and remain well below the sector average, and the portfolio is achieving rental increases of about 11% on renewal,” he says.

During the quarter Redefine acquired R520-million in properties at an average yield of 11,27%, and has disposed of R130-million in properties at an aggregate yield of 6,5%, which is expected to impact positively on the portfolio for the remainder of the financial year.

Income from Redefine’s listed securities portfolio has met expectations.

At the company’s annual general meeting held today, a resolution was passed for its name to change from Redefine Income Fund Limited to Redefine Properties Limited, with effect from 1 March 2010. “Redefine Properties better reflects the core business and corporate identity,” says Cesman.

Redefine’s ISIN will change to ZAE000143178, while the short name (Redefine) and share code (RDF) will remain unchanged.

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The 18 200m2 centre will receive a facelift with new tiling, ceilings, shopfronts, paint and lighting to create a more attractive and fresh shopping experience.

The renovation of the centre commenced in February 2010, and should be complete by the end of March 2010, minimising disruption to tenants and shoppers.

To compliment the new look, the centre’s name has changed to Vaal Walk.

Redefine leasing executive Grant Silverman says the upgrade of the centre is expected to attract more shoppers to the centre, which is anchored by national fashion retailers such as Edgars, Jet, Mr Price, Foschini, Exact, PQ Clothing and other retailers such as Crazy Store.

“The upgrade gives retailers the opportunity to take up some of the vacant space in the centre, and we are expecting renewed interest from prospective tenants,” he says.

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