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Press archive

Accolades for Redefine Properties' integrated report
07 September 2016

Redefine Properties' commitment to best practice stakeholder reporting was rewarded once again at the 2016 Ernst & Young's Excellence in Integrated Reporting Awards today when it was ranked 5th in the top 10 companies. Redefine Properties' report was singled out as an excellent example of how a property company can tell its value creation story. This is the second year in a row that Redefine Properties finds itself in the impressive list of firms heralded for their integrated reporting. Last year, Redefine was ranked 6th in the top 10 of the JSE's Top 100 companies.Leon Kok, Financial Director, Redefine Properties, says "We regard the integrated report as a formidable tool to communicate with our stakeholders." "The report is an outcome of our ongoing efforts to enhance communication with our stakeholders in a forthright manner that addresses prospects and challenges and remains for us, a benchmark for disclosure and accountability." "The integrated report offers our stakeholders a window into how we are creating value both inside and outside of the company. The key benefit to integrated reporting is the way it's deepened our sustainability focus and helped embed greater levels of integrated thinking throughout our organisation." According to the adjudicators, the report highlights and provides a comprehensive view of risks and is complemented by a number of risk heat maps that provides an understanding of the short to long term risks facing the company. The report also provides an excellent description of the companies' business model that includes primary business activities as well as the outcomes. "We are delighted to receive recognition that our integrated reporting journey is on the right track and it motivates us to continue improving our stakeholder communication," says Kok in conclusion.

Office rentals in key nodes still offer exciting potential despite the challenges, says Redefine
07 September 2016

Johannesburg – 1 August 2016: The weaker economic outlook continues to add pressure on office rentals, but JSE-listed diversified real estate investment trust Redefine Properties (JSE: RDF) says a well located office block with the right offering "should let"."It is unlikely the current economic conditions are going to change any time soon and this means the outlook for the office rental market remains gloomy. Secondary properties in particular remain under significant pressure to retain and gain tenants. But this should not mean there is no opportunity in this office space either," says Redefine's chief operating officer, David Rice.Redefine's strategy three years ago to improve the profile of its office portfolio by acquiring modern properties in better nodes, redeveloping and upgrading existing properties places it in a stronger position today."We are now far more invested in areas such as Sandton and Rosebank than previously, for example, and have sold off what we deemed to be secondary properties and will continue to do so," says Rice.Today Redefine's exposure to these suburbs is approximately R6 billion.Redefine's new home, Rosebank Towers, a 25 000sqm office block, has been pre-let with rentals upwards of R200/sqm, reflecting the interest in the Rosebank node.As a result Redefine will shortly begin the demolition of Rosebank Mews and develop a premium grade, 4 star, green-rated office block of approximately 18 000sqm with an abundance of parking, access to the Gautrain, restaurants and retail outlets .In addition, Redefine is focusing, as a priority, on upgrading the quality of buildings in these and other popular nodes.   "We expect rental growth in Rosebank to continue whereas most nodes are not experiencing real rental growth."There is no doubt the landscape for office space is changing and we need to be able to deliver on these future needs. Facilities that allow an office worker to get on with their day-to-day lives with as little hassle as possible will continue to be in demand; as will the right geography and access to facilities," says Rice.The need for better utilisation of space is increasing as the space per person in the working world shrinks. This is not just an SA phenomenon as major moves in this direction take place globally with many big companies reverting to open plan environments, without dedicated workspaces - even for their executives.Demand for serviced offices is a trend that needs to be taken seriously. In line with its continuous pursuit of quality, Redefine has therefore partnered with a flexible workspace solutions company to grow its exposure in this area of the market.This partnership sees Redefine developing  approximately  5 000 square metres across seven sites where it plans to be able to offer flexible workplace solutions. "We hope this will be the first of many developments along these lines. Demand for serviced offices and flexible leases will also increase as more staff members work remotely," says Rice.In addition the jury is out on future parking requirements in office blocks and whether the current requirement will be reduced in time.The need for greener space and for older properties to be retrograded via green star ratings will increase, as more companies are required to report on their broader impact on the environment."Our aim is for all new offices to have at least a four star green rating and are already making progress on rating existing buildings and hope to be able to certify a number of them by the end of the next financial year," says Rice.A good relationship with tenants, their representatives and brokers remains crucial as these and other trends unfold and those companies that fail to maintain these high levels of trust and delivery will struggle.A sharp focus on operational efficiency, diversity, core portfolio quality, the fine tuning of structures and strong relationships with key stakeholders will continue to drive growth and open the door to opportunities in the office space."It need not all be doom and gloom - but future success will require a very clear strategy to be mapped out and delivered upon. The right product will still work and achieve good value despite the challenging economic environment," concludes Rice.

Redefine reaps rewards from diligent focus on implementation of its strategy
07 September 2016

Johannesburg, South Africa – JSE-listed diversified real estate investment trust Redefine Properties (JSE: RDF) has delivered a strong performance during the half year to end February 2016 despite the stiff headwinds facing South Africa's economy and ongoing political uncertainty.A 6.9% increase to 41.7 cents a share in the distribution for the six months to end February 2016 has been declared. In rand terms distributable income rose 29.4% to R1.9bn. The company maintains its guidance of 6-7% distribution growth for the full 2016 year on the back of its well-diversified asset base and the continuing execution of its key strategic priorities.While economic uncertainty and financial market volatility is ongoing, a sharp focus continues on operational efficiency and managing relationships with key stakeholders, including local government. CEO Andrew Konig says these are "challenges we are up to".Konig says in the period under review management focused on "how we can do things even better." This was targeted at creating efficiencies and also resulted in a realigning of structures to cope with new demands and beefing up of the senior management structure as part of a broader asset and property management strategy.The bulk of Redefine's local strategy is centred on existing properties and on servicing its significant development pipeline. Leases covering 282 070 sqm were renewed at an average rental increase of 4.3%, with the retention rate at a pleasing 83%.During the review period, the company completed projects totalling R1.8 billion representing investment of R700m, outgunning acquisitions for the period of about R400m. Disposals amounted to R1.2 billion, while new development projects with an approved value of R1.1 billion are currently in progress."We have successfully recycled capital domestically to part-fund development as well as new acquisitions," explains Konig.Net arrears improved to R34m from R42m at end 31 August 2015 and the company's financial director Leon Kok says one of the core tenets of Redefine's business model is its prudent management of cash. "Cash management is critically important and we have also put a greater emphasis on the quality of tenants at inception of leases," says Kok.High debt funding costs are expected to constrain future development in the property sector locally, but a rerating of Redefine's share price has offset the increase in the costs of debt.The major disposal during the six months related to Redefine's R2.2 billion government tenanted office portfolio, it has been the company's stated intention to dispose these of assets. During the period it entered into an agreement with Delta Property Fund which acquired approximately 60% of this portfolio valued at R1.3 billion, in return for Delta shares.Opportunities for select industrial development remains on the agenda - as an example, Redefine entered into a joint venture with Pivotal and Abland whereby Redefine acquired a 45% interest in S & J land earmarked for an industrial precinct to be serviced and developed in phases based on demand. S&J land comprises a 160 hectare (1.6 million sqm) prime industrial parcel of land located in Germiston, Johannesburg.On the retail front, a new development phase includes the Stoneridge Shopping Centre, a 51 917 sqm open-air lifestyle shopping centre located in Edenvale, Johannesburg.A core ongoing strategy is to exploit attractive offshore yield spreads, where debt can potentially be locked in for five years at exceptionally low rates. The company's offshore portfolio is set to grow from 21% currently to 24% once the company's ground-breaking Polish deal kicks in later this year.Redefine has broadened its offshore footprint via an initial 75% investment into a 1.2 billion euro high-yielding commercial platform comprising 18 properties in the rapidly-expanding and exciting Polish market. The initial stake will reduce to 49.9% as a result of a placement of shares with investors.Anti-trust clearance has been received for this deal and the company anticipates the acquisition to be fully implemented on June 1 and to add accretive income in the last quarter 2016 at an additional one cent of distribution per share.Apart from the Polish deal, the company is also in the process of establishing a limited investment presence in Spain and further diversification in student accommodation in Australia."Local property fundamentals remain challenging, with issues like electricity price increases and the impact of drought conditions still permeating the industry. But we continue to deliver on our strategy of diversifying, growing and improving the quality of our core property portfolio, while ensuring that we focus on our people, the fine-tuning of our management structures and delivery to all our stakeholders," concludes Konig.

Seeing is believing
07 September 2016

Following our acquisition of Echo's developed property portfolio comprising 10 retail centres and eight office developments in major cities in Poland, one of the first things we did was invite the investment community on a road trip to the country to view the properties and get insight on the property fundamentals and growth potential in Poland. Over the past two decades the Polish economy has continued to gather momentum, growing steadily at over 3.5% on the back of the highest allocation of structural funds by the European Union. It's also seen interest and investment from the West, the East and now from South Africa. According to CBRE, retail business is one of the fastest growing sectors of the Polish economy and ranked as the 19th most attractive market globally for retail brands. Our recent acquisition gives us a good spread over Poland's retail geography and affords us over 457,400 sqm of total lettable area in major Polish cities. Our retail assets are let out to leading retailers with strong turnover growth and international brands like Samsung, H&M, IKEA, Carrefour, Zara amongst others. Office space is mainly leased to blue chip tenants. Adrian Jardine, Equity Analyst at Avior Capital Markets who has been cautiously watching South African REIT's foray into offshore markets returned impressed with Redefine's approach to the market. He says, "The acquisition is good and so is the scale. Equally impressive is the quality of the core portfolio and the in-country team." "I am really excited about the development pipeline which will unlock value for shareholders. I am equally charmed by the Polish economy's fairy tale like story," he concluded. Leon Allison, Fund Manager at Peregrine Capital, said for him the biggest positive was the country's macro environment which continues to be positive and headed in the right direction with good growth prospects in the medium to long term. "While any change in government introduces a level of uncertainty, the risks seem manageable." "Poland has the assets to drive growth including an educated workforce; affordable labour, strategic location and first world infrastructure." "Although I am not a fan of office assets as long term strategic play and would prefer they sell into the investment market, retail is good enough to work with," he added. Bandi Zondo, Equity Research Analyst (Real Estate) at Standard Bank says the acquisition of Echo's portfolio is one of the better deals Redefine has concluded in a long time. The key upside is the platform and development pipeline as well as the local team's skill and strength. "It is a huge opportunity for Redefine to unlock value in their portfolio both domestically and internationally," Zondo said. The local team made a lasting impression on Keillen Ndlovu, Head of listed property funds at Stanlib who said, "The trip was better than expected and from my meetings with them it is clear that they are very knowledgeable, run a sound business and are an operationally strong and diverse team." "We don't see this often but the team's forthrightness and disclosure during site visits, where we even got to see competitor projects is praiseworthy." "While concerns are part and parcels of deals this size, the portfolio of both existing and potential looks good and carries immense potential." "In my view, the appetite for retail property is likely to prevail from what I have seen. Also Business Process Outsourcing by multinationals continue to head towards Poland and that is another comforting factor." "I do foresee challenges in the office market with lots of supply coming through so securing best tenants with long term leases will be key. Poland has been strong in 2015 and based on the macro environment is expected to have a strong 2016 as well. Romania has been courting investors and getting attention, but Poland is probably going to continue to grow the fastest given its diverse market." Evan Jankelowitz, Fund Manager at Sesfikile Capital returned very satisfied with the competency and depth of the management team in Poland. "The assets - both property and people are first rate and the potential in both extensions and developments are significant." "While risks in property are inherent, on the face value this is a redefining deal," says Evan. The Poland tour visited the cities of Warsaw, Wroclaw, Krakow, Szczecin, Poznan and Kalisz.

The tale of a few cities
07 September 2016

If you haven't already heard about Katowice, Kielce or Kalisz, chances are the zloty hasn't dropped yet. In 2015, Poland's Business Process Outsourcing (BPO) and Shared Services Centres (SSC) employed over 150,000 people, the largest employer in the country after mining. A number of reasons work in tandem to favour the fortunes of Poland's emerging cities - economic stability, highly qualified pool of graduates and first world infrastructure. Many global corporations and ICT firms are increasingly setting up operations in Poland's regional cities for cost efficiencies and access to labour pools. Even the iconic Fiat 500 is manufactured in Katowice. So if you haven't been paying attention till now, it is time to polish up. The rapid proliferation of the business services industry in Poland is manna for the property sector. Forecasts by the Association of Business Service Leaders in Poland predict the sector will employ over 250,000 people by 2020. Accommodating the bulging sector and those who serve it presents a basket of opportunities for Redefine. As these cities continue to grow the number of jobs and attract blue chips corporations like Microsoft, Intel and Citigroup - the war on talent will simply drive more people to the regional cities in search of jobs. Retail benefits from lower unemployment figures as rising disposable income encourages social life and spending. While prime shopping centre rental fees remain highest in Warsaw, yields are increasing slightly in the agglomerations of Poznan, Krakow, and the Tri-City, while remaining stable in the other markets. The retail segment was the most active of all commercial real estate sectors: projects worth approximately Euro 2.261 billion changed hands last year, the highest result since the record-breaking 2006. Jones Lang LaSalle (JLL) reported last year that an increasing number of retailers were being more selective with regard to expansion in new locations with the quality of any new retail project high on the check-list. The inflow of foreign brands in 2015 was slightly lower than in 2014, with only 18 new international entries (as compared to 24 in the previous year). It is however prudent to note that this temporarily lower activity did not stem from any lack of attractiveness of the Polish retail market, but rather from the search for good franchise partners. The most anticipated fashion debut on the Polish retail market last year was that of Superdry (from the UK). We look forward to the next few years as the market anticipates debuts by other international brands like Forever21, Banana Republic & FCUK. Amazon recently moved the unglamorous industrial property sector centrestage when it opened fulfilment centres in Wroclaw and Poznan to service mostly the German market. Upgrading of transport links to the rest of Europe has given Poland the necessary license to market itself as Europe's mid-point and lure operators to build warehouses as well as business outsourcing centers. Poland's power play in warehousing, a lifeline to e-tailers, has meant that vacancy rates have been consistently declining. Big online retailers like Amazon vie for distribution space closer to population centers to make deliveries quickly. Our right of first offer on over Euro 500m projects, with more than 80% of newly constructed GLA provides additional growth and value upside backed by developer guarantees from Echo. It is also an honour to report that this acquisition has landed Griffin Real Estate, the Investor of the Year accolade at the 8th EuropaProperty CEE Retail Awards for its investment success in 2015. Griffin won for its role in Redefine's acquisition of a majority stake in Echo Investment, the largest transaction on Poland's commercial real estate market in recent years. Poland's emergence from the ashes of communism to first class investment opportunity over the last few decades is as good a confidence builder as it is a value builder. Healthy fundamentals across retail, commercial and industrial space point to a revival in fate of Poland's regional cities and may well extend to its smaller cities.And for that reason using the word regional cities or tier-2 cities in Poland's context can sometimes be a misnomer. If Warsaw has dominated the news and economic narrative as the capital city, Poland's regional cities are attracting significant capital of their own.

Warsaw to Wroclaw - Retail & Office driving opportunities
07 September 2016

Statistics on real GDP growth from the European Union show Poland will continue its solid pace of 3.5% growth both in 2016 and 2017. Comparatively, the Union as a whole is expected to grow at a more sedate 1.9 % to 2%, proving once again that our timing couldn't have possibly been better.The inaugural fDi Magazine's Polish City of the Future 2015/2016 ranking lists Lodz, Poland's third biggest city as having the best strategy for attracting foreign direct investment followed by Katowice, Wroclaw, Gdansk and Krakow. It is no surprise that companies like Amazon, Google and Hewlett-Packard find the lure of Poland's regional cities almost irresistible.Long overlooked by investors in favour of Warsaw, Poland's regional cities are increasingly finding favour with businesses only too happy to locate their back office functions in Europe's most vibrant economy. With many developed markets barely scraping together respectable GDP figures, developing markets like Poland offer the best opportunities for companies looking to globalise and for Redefine to provide that space.As the Polish economy goes from strength to strength, our investment in retail and commercial property in key cities from Warsaw to Wroclaw should provide real value and good returns from this high quality portfolio enjoying an average occupancy rate of 95%.It is squarely a long term investment and we view the country as a reliable high-yield investment market with holding comprising of over 450,000 sqm of lettable area. A significant upside of this acquisition is the right of first offer on over Euro 500m worth of newly developed properties from the large retail and office development pipeline of Echo.Furthermore, Redefine's 25% participation right in these developments gives it access to the exciting growth potential of a pipeline of properties via profit share if these properties are sold to third parties.Among the anticipated trends that we might witness in 2016, it is worth mentioning the high level of demand for retail and office space in regional cities that lends us that scale. It is not just Warsaw that offers value but many of the country's regional cities that are flirting with potential.The pace of investment especially in Warsaw and moreso in other regional cities particularly in office space can be attributed to international companies outsourcing parts of their business to Poland. While it might have started off as a pre-dominantly call centre hub, many international firms are now considering Poland for R&D, SCC and ICT operations.Poland's move away from managing simple outsourced tasks from its infancy days to delivering more sophisticated technology solutions has attracted the likes of Samsung, who have established the largest R&D facility outside of China. Furthermore its education system which ranks in the Top 5 in Europe has the trust of global financial giants like BNP, Citi and HSBC who are banking on Poland's highly qualified graduates.Poland is also becoming a popular destination for warehousing because of its central location which makes it an ideal gateway into Western Europe. Amazon's three distribution centres in the country, two in Wroclaw and one in Poznan roughly the size of Sandton City and the adjacent Nelson Mandela Square put together suggest that even in the age of online transactions, fulfilment still depends on brick and mortar structures.Moreover with Amazon looking to launch its own air freight services to fully control its logistics chain; it is this space that is likely to dominate investment activity.Student accommodation is another growing sector with rental yields of between 8% - 9%. One of the main reasons for this is the excellent education system on offer in Poland. A number of students from many parts of the world come to Poland's schools and universities keeping this sector abuzz with activity.While Credit Suisse in its Global Wealth Report 2015 confirms that the number of dollar millionaires in the world dropped slightly on the back of weak exchange rates, the number of millionaires in Poland is set to increase from 44,000 in 2015 to 77,000 by 2020, indicating a growing potential for luxury housing.There is more to Poland's attractiveness than is described here - for us it has been the timing. Having now planted the South African flag, we will now keenly focus on the set of opportunities that will drive shareholder value. Our strategy for Poland is what we use at home - we're not landlords, we're people.

In pole position
07 September 2016

Poland is on track to join the G-20 list of the largest economies in the world by 2022 on the back of its impressive and vertical growth. Already the largest economy in Central and Eastern Europe (CEE), Poland has more than doubled its GDP since 1990 from approximately USD 312 billion to over USD 716 billion in just over two decades. And if you thought this stable and booming economy was reason enough to put out the wodka, it seems Poland is in no hurry to celebrate as it continues to work hard attracting foreign investment much to the chagrin of other CEE markets. The return of big deal making is also supercharging the Polish property market which is slowly inching towards the heady highs of 2007. Poland is a good news story and there are many reasons that underpin it's emergence as an investment destination of choice in Europe, particularly the country's strategic location providing a gateway to emerging markets of CEE. Following the cooling of trade relations between Germany and Russia, it is no surprise that Poland is now Berlin's most important trade partner in Eastern Europe. In the backdrop of this exciting growth and imminent opportunities, we at Redefine Properties have chosen to significantly broaden our offshore footprint via an initial 75% investment into a 1.2 billion euro high-yielding commercial platform comprising 18 properties in the rapidly-expanding Polish market. Poland also remains the only country in the EU that emerged unscathed from the recession due to a high domestic demand. This in part can be attributed to high levels of education amongst its student populace, who in turn contribute to economic activity and spend. Unemployment, which has been one of the vexing problems of the Polish economy for many years, has dropped to under 10% from previous highs of between 20%-30% just a decade before. It wouldn't be far-fetched to attribute some of Poland's growth to entrepreneurship and hard work while most of it comes from market oriented reforms. The catchment of a younger, educated and employed population contributing to retail spend fits into our overall acquisition strategy of this portfolio. Echo owns a portfolio of office and retail space in Poland. Retailing is fundamentally a consumer oriented activity and therefore this acquisition has the size and the scale to make a significant contribution to our holdings. Poland's political and economic landscape mimics those of countries in Western Europe with yields looking much more attractive on the back of fairly lower investment. Polish retail real estate is particularly attractive as Poland has several large regional cities like Wroclaw, Poznan and Szczecin amongst others. Poland's medium-sized and smaller cities like Kielce, Kalisz, Jelenia Gora and Belchatow are also witnessing a real boom in leasable space driven by the country's continuing economic growth, declining unemployment, and highly-educated workforce. We are seeing a surge in demand in the Business Processes Outsourcing sector (BPO) in cities like Katowice, Poznan, Gdansk, Lodz and Tri-City. Poland's tech sector advantage compared to Asia comes not only from its proficiency in English language and the moderate labour costs but also the well qualified workforce leading to companies being only willing to locate their R&D centres in Poland. Poland has been on our map for quite a while and we have shown restraint in making deals in the market for a long time. We were waiting for the right assets and the right time and it's only fair to suggest - good things come to those who wait.

Single largest offshore property deal by a South African property company
07 September 2016

Redefine Properties significantly expands offshore footprint following record setting 1.2 billion euro Polish commercial property deal. Johannesburg, South Africa, 01 March 2016 - South African Real Estate Investment Trust (REIT) Redefine Properties is significantly broadening its offshore footprint via an initial 75% investment into a 1.2 billion euro high-yielding commercial platform comprising 18 properties in the rapidly-expanding and exciting Polish market. The deal, which will be financed via debt and equity at a proposed 60% gearing at the property level, is the largest ever real estate investment transaction in Poland. It is also the largest ever single transaction of income generating real estate assets in Central Eastern Europe. Echo Investment is a recognized market leader in the Polish and Central and Eastern Europe commercial and residential property development and investment space, having completed over 115 real estate projects in 37 cities and 4 countries. Redefine's executive Chairman Marc Wainer calls the deal "a game-changer" for Redefine. "It significantly advances our international strategy - it has the scale, the right partners and the ability for growth to take a major part of our business to the next level. The 18 properties tick all the boxes from an investment perspective and allows us to take advantage of what will be positive yield carry," he says. The return profile is attractive generating total distributable income of 46 million euro. "These are all high quality properties with average portfolio occupancy rate of 95% and a large share of modern and sizeable properties," says Wainer. Poland is the largest country and market in Central and Eastern Europe with a population of around 38m and GDP growth of about 3.5% a year. Importantly, it has a large, stable and liquid real estate market which has become increasingly attractive to foreign investors over the last few years due to its high growth potential and scalability. A significant benefit of the agreement - which is still subject to the approval of the European Commission, is further complemented by a right of first offer on over ?500m worth of newly developed properties from the large retail and office development pipeline of Echo, with more than 80% of the projects expected to be delivered within the next 2 years. Furthermore, Redefine's 25% participation right in these developments gives it access to the exciting growth potential of a pipeline of properties via profit share if these properties are sold to third parties. "This provides us with a unique path to the leading pure play Polish commercial real estate platform with significant further growth and value upside potential," says Wainer. The deal was made possible after Echo made a strategic decision to split its high yielding platform from its development and residential business and to find a buyer for the commercial real estate platform in which it will retain a 25% stake. "This deal moves the needle as economic growth is driving demand for office space in Poland and opportunities in retail are even more exciting as disposable incomes have improved in lock-step with economic growth," says Wainer. With rand weakness persisting and inflation on the rise in South Africa, Redefine believes offshore driven tail winds are anticipated to offset the domestic head winds. The low interest rate environment in certain overseas markets will be exploited by taking advantage of the positive yield spreads that are currently available. Apart from the Polish deal, the company is also in the process of establishing an investment presence in Spain and diversification into student accommodation in Australia. "Although 2016 is proving to be a tenant's market across all domestic sectors, it is not all doom and gloom for us at Redefine as our geographic diversification now really begins to work for us," concludes Wainer. About Echo Investment: Founded in 1994, Echo Investment is a recognised market leader in the Polish commercial and residential property development and investment space with a strong regional footprint. It has completed over 115 real estate projects in 37 cities and 4 countries, with a total area of more than 1 million m2 of which around 446,000m2 is retail and 291,000m2 office space. Currently its portfolio includes 138,000m2 of real estate projects under construction and 136,000m2 in preparation with additional land bank of over 200,000m2 for retail and office space in Poland. It has presence in four real estate sectors including housing, shopping, outlets and entertainment centres, office buildings and hotels. About Redefine Properties: Redefine is a diversified Real Estate Investment Trust (REIT) and is classified as one of the Top 40 companies listed on the Johannesburg Stock Exchange. Redefine manages a property asset base with a market value of approximately R65 billion, comprising local and international property investments. Media Contacts: Jaclyn Lovell Communication Specialist, Redefine Telephone: 011 283 0072 Mobile: 084 618 5584 E-mail: JaclynL@redefine.co.za

Antoinette Coetzee named Redefine Properties Retail Asset Manager
07 September 2016

Redefine Properties has appointed Antoinette Coetzee as its new Retail Asset Manager. She has held the position of retail analyst at the company for the past three years. Coetzee brings with her a firm grounding in listed equity analysis in the retail, beverage and luxury goods sectors and will now oversee the management of Redefine's vast retail portfolio. Her new responsibilities include strategic planning for the retail property portfolio with a dedicated focus on driving increased returns and exploiting opportunities to reduce risk and improve the retail portfolio. Andrew Konig, CEO of Redefine Properties, says: "For the past three years, Antoinette has been a key member of our property management team and we believe that her valuable research skills and broad retail knowledge will add value to our retail portfolio." Before joining Redefine, Coetzee (33) spent eight years as a buy-side and sell-side analyst. She holds a BCom (Hons) in Investment Management from the Rand Afrikaans University (now known as the University of Johannesburg). When not overseeing Redefine's vast retail footprint, Coetzee enjoys a good Irish whiskey, travel, yoga and photography.

Redefine strikes a R1.3 billion deal with Delta for the strategic disposal of 15 government-tenanted properties
07 September 2016

Redefine Properties, whose stated intention has been to dispose its government tenanted office portfolio currently valued at R2.2 billion, has entered into an agreement with Delta Property Fund to dispose approximately 60% thereof valued at nearly R1.3 billion, to Delta in return for Delta shares. Andrew Konig, CEO of Redefine, says that apart from realising a significant milestone in Redefine's investment strategy to improve the overall quality of its property portfolio, Redefine will in effect be switching the management of a large part of its government-let properties to proven managers in this area. Commenting on the transaction, Konig says: "In addition to substantially reducing Redefine's direct exposure to government-tenanted office properties, this deal has several added benefits for our stakeholders. Redefine's shareholding in Delta will enable Redefine's participation in a broader government-tenanted portfolio with less risk, potential dilution in distributable income is manageable through an orderly exit from Delta, plus Redefine stands to benefit from a potential rerating of Delta as a consequence of the transformative nature of this transaction." Redefine is a listed SA REIT (Real Estate Investment Trust) and the second-largest listed property company on the JSE by market value. Redefine property assets under management are valued at approximately R64.5 billion. Delta is a black-owned REIT that specialises in managing properties with a sovereign underpin. Redefine will have representation on the Delta board while holding 5% or more of Delta's issued shares. The portfolio acquired by Delta comprises 13 commercial buildings and two parkades, leased to national and provincial government tenants in Johannesburg, Pretoria and KwaZulu-Natal. The consideration will be settled in full by Delta through the issue of 162043079 shares. Redefine will be entitled to Delta share distributions from the effective date of the transaction, which will be no later than 1 March 2016, when transfer is expected, or the fulfilment of the usual conditions for a transaction of this nature. Konig confirms that Redefine will dispose of the balance of its government-tenanted portfolio on a deal-by-deal basis.

Redefine strikes a R1.3 billion deal with Delta for the strategic disposal of 15 government-tenanted properties
07 September 2016

Redefine Properties, whose stated intention has been to dispose its government tenanted office portfolio currently valued at R2.2 billion, has entered into an agreement with Delta Property Fund to dispose approximately 60% thereof valued at nearly R1.3 billion, to Delta in return for Delta shares. Andrew Konig, CEO of Redefine, says that apart from realising a significant milestone in Redefine's investment strategy to improve the overall quality of its property portfolio, Redefine will in effect be switching the management of a large part of its government-let properties to proven managers in this area. Commenting on the transaction, Konig says: "In addition to substantially reducing Redefine's direct exposure to government-tenanted office properties, this deal has several added benefits for our stakeholders. Redefine's shareholding in Delta will enable Redefine's participation in a broader government-tenanted portfolio with less risk, potential dilution in distributable income is manageable through an orderly exit from Delta, plus Redefine stands to benefit from a potential rerating of Delta as a consequence of the transformative nature of this transaction." Redefine is a listed SA REIT (Real Estate Investment Trust) and the second-largest listed property company on the JSE by market value. Redefine property assets under management are valued at approximately R64.5 billion. Delta is a black-owned REIT that specialises in managing properties with a sovereign underpin. Redefine will have representation on the Delta board while holding 5% or more of Delta's issued shares. The portfolio acquired by Delta comprises 13 commercial buildings and two parkades, leased to national and provincial government tenants in Johannesburg, Pretoria and KwaZulu-Natal. The consideration will be settled in full by Delta through the issue of 162043079 shares. Redefine will be entitled to Delta share distributions from the effective date of the transaction, which will be no later than 1 March 2016, when transfer is expected, or the fulfilment of the usual conditions for a transaction of this nature. Konig confirms that Redefine will dispose of the balance of its government-tenanted portfolio on a deal-by-deal basis.

Redefine appoints new director and advances its board strategy
07 September 2016

Redefine Properties has announced that Robert Robinson has been appointed as an independent non-executive director to the Board of Directors of Redefine. Robert brings with him a wealth of business and property experience gained over his 35 years with Sasol, where he initially excelled as an economist and then went on to take up various senior roles within Sasol Limited and later the Sasol Pension Fund. Robert retires from Sasol in December 2013. He holds an M.Com (Economics - Cum Laude). His appointment continues Redefine's strategy to continuously advance the skill and experience base of their board. "We welcome Robert's appointment to Redefine's Board and look forward to benefitting from his broad experience" says Marc Wainer.

Redefine delivers full-year results ahead of market guidance and further strengthens its portfolio
07 September 2016

Redefine Properties today reported distribution growth of 7.3% to investors for the year ended 31 August 2013, outperforming expectations. Redefine's net asset value increased by 8.6%. Marc Wainer, CEO of Redefine, attributes this solid performance to the continued success of Redefine's strategy which has expanded its local property portfolio through the acquisition of prime quality assets, and rigorous cost control, which have combined to produce strong income growth. "Redefine's primary objective is to achieve sustained income growth for investors and we have delivered, and surpassed, our market guidance for the 2013 financial year. We're pleased to report a positive set of results that shows a transformed and strengthened balance sheet for Redefine," says Wainer. Wainer notes Redefine's restructured property portfolio is well positioned to show continued improvement. "Despite the challenges facing the sector - a subdued trading environment, disproportionate increases in rates and taxes, and continued financial market volatility - we anticipate that Redefine's distributable income will grow at a similar rate in the coming year," says Wainer. Redefine began trading as an SA REIT (Real Estate Investment Trust) on the JSE on 1 September 2013. It manages a R41 billion portfolio of diversified property assets. The company's local investment assets comprise 251 properties valued at R24 billion and a R6 billion portfolio of strategic listed property securities, while Fountainhead Property Trust, in which Redefine recently raised its interest to 61,9%, has an R11 billion property portfolio. Redefine is internationally diversified through its 32,3% direct interest in Redefine International PLC, which is now listed on both the London and Johannesburg Stock Exchanges. Redefine also has a direct holding of 12.4% in ASX-listed Cromwell Property Group, as well as a further 13.7% indirect holding through Redefine International. Benefiting from strict cost controls and the internalisation of its electricity cost recoveries during the year, Redefine's operating cost ratio reduced to 20% of total revenue, from 23.7% in the prior year. "We continued to improve the quality of the core property portfolio during the year. Redefine's average value per property is now approaching R100 million, compared to R80 million a year ago," says Wainer. Redefine achieved this with R1.3 billion of quality acquisitions at an average yield of 7.2%, approved developments in progress of R2,6 billion at an average yield of 8% and redevelopments underway of R619 million at an average yield of 9%. It also concluded tactical disposals of R366 million with a yield of 10,8%. "Besides increasing the average value of our properties, we've also created a portfolio of younger buildings, reducing maintenance and repairs costs," says Wainer. Redefine's strengthened portfolio also helped improve vacancies in lettable space from 5,8% to 5,3%. Redefine achieved an 80% tenant retention rate and a positive rental reversion of 6%. Wainer confirms that Redefine will substantially complete the refinement of its portfolio of property assets in the coming year. Redefine is well advanced in disposing 26 government-tenanted office properties valued at R2,2 billion through a new listing and subsequent to the year end has concluded agreements, subject to the usual conditions precedent, to acquire properties for an aggregate consideration of R3.4 billion. In line with the property sector BEE scorecard, Redefine will also seek to improve its rating in the coming year. It also aims to continue embracing technology for communication internally and with all external stakeholders. Moreover, it intends to simplify its linked unit capital structure to ensure compliance with REIT legislation. On the funding front, Redefine plans to reduce its already conservative loan-to-value ratio of just below 40%. Displaying solid credit metrics, Redefine Moody's rating was unchanged and it continues to broaden its funding sources across the bond, debt and equity markets. After year end, Redefine became the first South African listed property company to launch an American Depositary Receipt Programme. "Redefine will continue to pursue revenue enhancing opportunities and seek new and innovative ways to secure the potential for long-term capital appreciation for our investors," says Wainer.

Redefine raises R1.3 billion in accelerated offering
07 September 2016

Redefine Properties has announced it increased its R1 billion equity raise, through an accelerated bookbuild that opened this morning, to R1.3 billion after strong demand resulting in an oversubscription of 1.5 times. The offering was priced at R9.60 per Redefine linked unit. The proceeds of this placement will be used to fund acquisitions which Redefine has agreed, subject to customary approvals, that total R3.4 billion. This includes Redefine's R727 million acquisition of a 51% stake in Maponya Mall in Soweto. Andrew Konig, Financial Director of Redefine Properties says: "The strong demand for Redefine shares is reflective of the market's confidence in Redefine's prospects and performance and supports the acquisitions, which will advance our strategy to grow our portfolio as-well-as improve the quality of our properties."

SA listed property will keep a close eye on sovereign risk, quantitative easing and interest rates in 2014
07 September 2016

South Africa's listed property sector can expect another interesting year in 2014 according to Redefine Properties CEO Marc Wainer, who predicts interest rates will be one of the most important underlying forces for the sector. "The direction interest rates take could have a dramatic impact on the prices of listed property stocks and ultimately the yields at which properties trade," explains Wainer. He cautions that 2014 could be a volatile year for pricing in the listed property sector given the uncertainty about the effects of quantitative easing, as we don't know what the US Federal Reserve's policy is yet, and the impact it will have on bond yields. "However, there still appears to be strong appetite from investors and from the bond market for South African property stocks," says Wainer. But, Wainer notes that biggest threat to the South African economy in 2014 is the potential of a downgrade of South African sovereign risk. "Should this happen there will be a massive sell-off of South African bonds by international investors. The repercussions for the South African economy, the listed property sector included, could be dire," says Wainer. When it comes to levels of activity in the listed property sector, Wainer believes property acquisitions and developments will be slow in 2014. "We can expect some consolidation between smaller funds as well as a few more listings, particularly those with an international flavour." Looking at property market fundamentals, Wainer predicts retail property will continue to outperform other subsectors thanks to strong demand for space from South African and international retailers alike. On the other hand, an oversupply of offices will mean further underperformance from this subsector. According to Wainer, the listed property sector will also continue to identify new opportunities 2014. "Increasingly South African property companies seek ways to diversify their investments into sub-Saharan Africa or other offshore jurisdictions," points out Wainer. "The yields available are better than in South Africa and there's strong appetite from investors for counters offering a rand hedge component." Not only will the sector consider new territories, but also new investment categories. Wainer explains: "There is much exploratory work underway to improve non-lettable area income, as well as interest in new property subsectors like residential, health care and storage among others."

Redefine makes firm offer to acquire annuity
07 September 2016

In a joint announcement on the JSE's SENS today, Redefine and Annuity Properties informed the market that they have agreed that Redefine will acquire the entire issue capital of Annuity by way of a scheme of arrangement, and Annuity's asset and property management companies. According to Redefine's offer, Annuity linked unitholders will receive 57.752 Redefine linked units for every 100 Annuity linked units. As a result, Redefine will issue 136.6 million linked units, for which it has unitholder approval. Redefine will also acquire the management companies for a cash consideration of R103 million. The offer represent a premium of around 9% to Annuity's 30-day clean volume weighted average price (VWAP) and the transaction has been priced at a yield of 8.5%. Shareholders representing approximately 79% of the issued share capital of Annuity have provided support for the transaction through irrevocable undertakings and letters of comfort. "We believe that this transaction will be beneficial to both Redefine and Annuity unitholders," says Marc Wainer, CEO of Redefine Properties. "For Annuity, the transaction maximises the long-term interests of its linked unitholders and protects value in a volatile environment by swapping into a diversified large-cap REIT at a premium." "For Redefine, the acquisition of Annuity's R2.1 billion property portfolio has been priced at an attractive yield in an environment of scarce investment opportunities. The portfolio is a good match for Redefine, with about 80% of its properties fitting Redefine's investment criteria, of which 30% are key retail assets. It also includes quality office and industrial assets with long leases." Redefine, a SA REIT, is the second largest listed property company on the JSE, by market capitalisation, with a R24 billion property portfolio spanning 3.125 million square metres of space across 251 properties. It is also invested in a R6 billion portfolio of listed property securities, which includes investments in Fountainhead Property Trust and, providing superior geographic diversification, through Redefine International PLC and Cromwell Property Group. The transaction is subject to fulfilling various conditions precedent, including approvals by Annuity linked unitholders and the usual regulatory approvals. Should the transaction go ahead, Annuity linked unitholders will receive a special distribution for the five-month period to 28 February 2014. The acquisition will be effective from 1 March 2014 and Annuity linked unitholders will be entitled to the Redefine income distribution for the period commencing 1 March 2014. "The proposed transaction is an effective growth course and enables Redefine to substantially advance its investment strategy in a single transaction," concluded Wainer.

Redefine continues to deliver ahead of market expectations
07 September 2016

Redefine Properties today reported continued growth in its financial results for the six months ended 28 February 2014, exceeding market guidance. Redefine achieved a 13% increase in distributable income, which translates into an increase of 8% in distribution per linked unit for the period of 36.4 cents. The sustained expansion of Redefine was mainly attributable to enhanced portfolio fundamentals and operating efficiencies, significant Rand hedge gains and good results from international investments. Redefine unitholders have for the first time been given the option to reinvest their cash distribution in return for Redefine units. "The Rand hedges in our portfolio made a strong contribution to results with our offshore assets comprising 14.7% of our total property base generating 19.3% of the total distribution," says Marc Wainer, CEO of Redefine. "Currently, property investment potential in some international territories is looking attractive relative to many local opportunities." Despite a challenging domestic trading environment, with disproportionate increases in utility costs and ongoing financial market volatility, Wainer notes Redefine is well focused on managing the variables within its control. "We are on track to deliver similar growth in distributable income per linked unit for the second half of 2014." Redefine is a JSE-listed SA REIT with a market capitalisation in excess of R30 billion and controls a diversified portfolio of property assets of R44.5 billion. The company's local investment assets comprise 253 diversified directly held properties valued at R25.4 billion, while Fountainhead Property Trust, in which Redefine has a 65.9% equity interest, has an R11.8 billion retail-focused property portfolio. Redefine is geographically diversified with R6.6 billion invested offshore. The 32.9% stake in Redefine International P.L.C which is listed on both the London Stock Exchange and JSE, is valued at R3.4 billion. Redefine has a R3.2 billion presence in the Australian property market through a direct 50% interest in North Sydney's landmark tower, Northpoint, and holds 12.8% in Cromwell Property Group, which is listed on the ASX - and an indirect holding of a further 13.4% through RI PLC. Benefiting from its internalisation of electricity recoveries, Redefine's operating costs were contained to 19% of total revenue, compared with 20% at the 2013 half year. "We made excellent progress in our strategy of repositioning and improving the quality of our portfolio. Redefine's average value per property is now close to the R100 million mark," says Wainer. "Where possible, when we acquire properties, we aim to secure fully repairing leases with premium tenants." The continuing portfolio improvement was achieved with strategic acquisitions, prudent disposals and value-enhancing developments and redevelopments. The strategy also helped improve vacancies in lettable space to 4,9%. Redefine concluded property acquisitions totalling R2 billion during the period, the largest of which was it's stake in Maponya Mall which transferred subsequent to the half year. "There are a limited number of suitable, attractively priced assets available for acquisition in the domestic market right now. So, development provides an important area for growth, especially given that we own a number of existing well located properties" says Wainer. "Redefine has adopted a renewed focus on redevelopment, with R700 million already in progress. We have also secured a new development pipeline covering 157,000sqm in gross lettable area, or R2.8 billion in development cost. This allows Redefine to grow its portfolio with high quality assets at investment yields that are earnings enhancing." With the structural change in listed property yields, Redefine has reconsidered its position on its Government-tenanted properties and put the sale of this portfolio on hold. "In terms of Government policy, Redefine is having leases renewed for three-year periods whereas previously many of these properties were on monthly tenancies or one-year leases," explains Wainer. Redefine identified attractive opportunities, in line with the increase in corporate activity in the REIT sector over recent months. Shortly after the period end, it reached an agreement to acquire the entire issued capital of Annuity Properties by way of a scheme of arrangement together with its asset and property management companies at a cost of R103 million. Annuity unitholders will receive 57,752 Redefine units for every 100 Annuity units held, which places a R2.1 billion value on the portfolio. The transaction is effective from 1 March 2014 and is subject to various conditions precedent. During the period, Redefine increased its equity interest in Fountainhead to 65.9%. Redefine and Fountainhead are at an early stage of engagement about the possible terms of a potential merger. Redefine also disposed of its remaining holding in Hyprop during the review period. The company's credit rating by Moody's remained unchanged during the period. Redefine's debt represented 37.6% of the value of its property assets and the average cost of funding is 7,8%, marginally lower than a year ago. Interest rates are fixed on 81% of its borrowings for an average period of four years. To make investing in Redefine more accessible to international investors, it successfully launched an American Depositary Receipt Programme in September 2013.

Redefine gets the Green light on annuity deal
07 September 2016

Redefine Properties today announced that it has received unconditional approval from the Competition Commission to conclude the acquisition of the entire issued share capital of Annuity Properties as well as Annuity's asset and property management companies. Annuity unitholders also gave their approval for Redefine to acquire the entire issued share capital of Annuity by way of a scheme of arrangement on 13 May 2014. These approvals mean the transaction can now be finalised. Annuity's R2.1 billion property portfolio has been priced at an attractive 8.5% income yield in an environment of scarce investment opportunities. This acquisition will be effective from 1 March 2014 and Annuity linked unitholders will be entitled to the Redefine income distribution from this date. Marc Wainer, Redefine CEO, comments: "The Annuity portfolio significantly advances Redefine's investment strategy in a single transaction. It provides excellent synergies, with 80% of its properties meeting Redefine's investment criteria of which 30% of the portfolio comprises retail assets, which furthers Redefine's objective for increased exposure to this sector."

Redefine announces restructuring of its board and top management
07 September 2016

Redefine Properties today announced a restructuring and realignment of its board of directors and executive management. With immediate effect, Marc Wainer has been appointed Executive Chairman of Redefine, succeeding Dines Gihwala who resigned for personal reasons during June. Andrew Konig, Redefine's financial director, has been promoted to the position of CEO, succeeding Marc. Independent non-executive director, Bernie Nackan has been appointed as lead non-executive director in line with the King Codes of Good Practice where there is a non-independent chairman. Konig comments: "Marc has played a central leadership role in Redefine, and we will continue to benefit from his visionary skills, vast property experience and significant deal making expertise". Mike Watters, CEO of Redefine International, joins the board as a non-executive director. "Redefine International PLC remains a key international investment for Redefine. Given its strategic importance, and Mike's wealth of property and corporate finance experience, he will be an asset for Redefine's board," notes Wainer. Commenting on the board changes, Wainer says: "The new board structure positions Redefine to continue meeting challenges and exploiting opportunities with a strong management team and board. We're delighted to appoint Andrew as CEO - his skills, expertise, experience and knowledge of the group are invaluable to take Redefine forward". David Rice continues in the vital role of Chief Operating Officer and Mike Ruttell as Executive Director responsible for development. A new financial director will be appointed in due course. Marc will retain a key strategic role in growing and diversifying Redefine's property asset base and will support group investor relations, as well as provide mentorship to Andrew who will manage the daily activities of Redefine with a continuing focus on its finance and funding operations. The company now has five non-executive directors. Nackan continues as Chairman of the Remuneration and Investment committee, Gunter Steffens has been appointed to the Audit & Risk and Remuneration and Nominations committees and David Nathan has been appointed Chairman of the Audit & Risk and Social & Ethics committees. Nackan's choice to fill the lead non-executive role reflects his length of service as an independent non-executive director to Redefine, his active role on board committees, being a non-executive director of Fountainhead Property Trust as well as Redefine International PLC and his extensive record on corporate and industry boards.

Redefine's Matlosana Mall on track to open in October
07 September 2016

The 65,000sqm super-regional Matlosana Mall in Klerksdorp, is on schedule to open on 23 October this year. It will bring broad retail variety shoppers in Klerksdorp and its surrounds in a modern, conveniently located shopping centre. Matlosana Mall is owned by JSE-listed Redefine Properties with Abacus Asset Management as thevelopment and leasing managers. Its appealing retail mix includes 145 stores, led by anchor rilers Checkers, Pick n Pay, Woolworths, Edgars and Foschini, as well as fashion, lifestyle anport retail plus entertainment and restaurants. It is already around 90% let, with the remain leases under negotiation. The mall will have an estimated completion value of approximately R1 billion. This investmentom Redefine is also driving growth of a vibrant new node, with residential development, convence, and value shopping planned adjacent to the Centre. Key to the mall's role as a development catalyst for the area is its excellent accessibility m the N12 highway. Redefine's Development Director, Mike Ruttell, explains that Matlosana Mall is conveniently ped at the eastern entrance to the town and strategically positioned as the catalyst of the N1evelopment corridor. As part of the development, Redefine is constructing two access points from the N12 highway cest to Klerksdorp, and an extra third lane for the highway adjacent to the mall's boundary.See access points and road works have always formed part of the mall's viability," commented Ruttell. "After some initial delays, all approvals and wayleaves were put into place by working close together with SANRAL, the city and adjacent infrastructure developer Isago." The two Matlosana Mall highway access points are due for completion shortly before the mall opens. The easy access to the mall also makes it convenient for shoppers from surrounding towns,ally for those in the growth node that stretches between Klerksdorp and Stilfontein and is marked as a vital economic growth area in the region. "In addition to making it easy for this community to go shopping in a modern, quality mall meets all their retail needs under one roof, the infrastructure being created by the mall make it easier for residents to get where they want to go," says Ruttell. "We believe the development of Matlosana Mall will have far-reaching positive consequences for the community." Besides offering the very latest in retail, the mall's cutting edge design also incorporate to practice green building principles, which are being implemented as far as possible, include energy-efficient lighting. In addition to considering its environmental impact, Matlosana Mall will also create some temporary jobs during the 19 months of construction, and then 1,500 permanent jobs when the Mall opens. "We're looking forward to Matlosana Mall's grand opening in October. The mall is tailor-made, its growing community, with an excellent location, contemporary design, great retailers available parking. Together these create a new and exciting shopping experience," says Ruttell. " same time this quality super-regional shopping mall asset is tailored to meet all Redefine Investment criteria and creates positive social, economic and environmental impacts."

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