Redefine Properties today announced a distribution of 38.14 cents per share for the second half of 2014, which combined with the first-half distribution of 36.4 cents per share results in growth of 8.5% on a full year basis, delivering performance ahead of market guidance. The results mark Redefine's first full year trading as a REIT (real estate investment trust), and its debut dividend distribution, with its new all share structure effective from 29 August 2014. This year also saw Redefine's introduction of a distribution reinvestment option for shareholders. To optimise in an evolving business environment, Redefine made changes to its senior management, and refined its strategic focus. And, for the first time, Redefine's asset base exceeded the R50 billion mark, with its property income earning asset base valued at R51 billion. Andrew Konig, CEO of Redefine, attributes Redefine's strong performance to the disciplined execution of its strategy, quality acquisition.
Redefine Properties' Matlosana Mall in Klerksdorp, North West, opened its doors for the first time today, delighting crowds of shoppers who came to enjoy the grand opening of this landmark shopping centre and be among the first to experience its exciting retail and restaurants. Measuring a sizeable 65,180m2, this super-regional mall brings world-class shopping to the Klerksdorp region and adds a tailor-made quality retail asset to Redefine's property portfolio. Leading JSE-listed REIT Redefine has invested approximately R1 billion to develop the high-quality Matlosana Mall. Its developer and leasing manager is Abacus Asset Managers. The super-regional shopping centre features a compelling selection of 145 exciting stores and tempting restaurants, which pleased shoppers on Matlosana Mall's public debut. Redefine's Development Director, Mike Ruttell, comments: "Matlosana Mall is a significant project that meets all the criteria for a top-notch super-regional shopping mall. Most importantly, it meets a real need for wide-ranging, quality retail in this community." He adds: "Matlosana Mall's excellent location, easy access, ample parking, modern design, superb retailers, and great dining and entertainment choices all add up to an appealing new shopping experience for the under-retailed consumer market of Klerksdorp and beyond." The mall features the flair of many of South Africa's best loved retailers, including anchor tenants Checkers, Pick n Pay, Woolworths, Edgars and Foschini.Shoppers were spoilt for choice on opening day with a vast variety leading national brands and independent retailers across a wide diversity of shopping categories. Shoppers were welcomed to a vibrant show of fashion, lifestyle, goodies and gadgets, as well as an exceptional line-up of groceries and a strong selection of fun, fast-foods and restaurants. Ruttell adds: "While the mall brings together the best retail in South Africa under a single roof, one of the most important considerations in selecting the tenant mix has been matching it to consumers. Matlosana Mall's shops and restaurants have been chosen with the needs and desires of its shopper profile in mind." This is only one of the ways that Redefine's Matlosana Mall has prioritised positive impacts on its community. In fact, Redefine set out to ensure that the development of Matlosana Mall resulted in valuable impacts for its surrounding community right from the start. Redefine's investment has also created employment, with the development employing some 3,000 people and 102 different subcontractors on its safe site, during the 18-month construction of the mall. It also significantly improved road infrastructure, with two access points from the N12 highway having been constructed as part of the mall's development. The highway has also been widened to three lanes adjacent to the mall. This makes it easy for shoppers from surrounding towns to enjoy a day at the mall, and offers additional benefits to local residents, making it easier for them to get where they want to go. The valuable added potential of this investment is even more significant when considering that Matlosana Mall is conveniently placed at the eastern entrance to the town, as the catalyst of the N12 development corridor. This growth node stretches between Klerksdorp and Stilfontein and is earmarked as a vital economic growth area in the region. It is driving the progress of a vibrant new node around it, with residential development, convenience, and value shopping planned adjacent to the centre. Matlosana Mall is also environmentally responsible, using green building techniques and technology. Its cutting-edge design also incorporates best practice green building principles, including energy-efficient lighting. It is also boosting the local economy by keeping consumer spend within the region, and shoppers no longer have to travel unnecessarily to get the retail brands, ranges and products they want. Ruttell concludes, "Matlosana Mall is a wide-ranging and appealing experience for all its shoppers. It is also an excellent opportunity for Redefine to grow its retail portfolio with a quality super-regional shopping mall tailored to meet all our investment criteria." Interesting facts: For its construction, Matlosana mall used nine million bricks.The mall was also built with 33 000m3 of concrete, which is equivalent to 55 000 baths of water. Matlosana Mall's roof is the size of 15 rugby fieldsThe extreme length of the building is 1km, from Checkers at the Klerksdorp end to Pick n Pay on the Stilfontein side. Its glittering shopfronts span 3km, which is equal to 1,820 people standing next to each other with arms stretched out. The mall offers approximately 2,842 parking bays, and nearly 1,000 cars can be parked undercover in the mall's 31,000m2 lower parking level.
You can't get a job without experience and you can't get experience without a job. University and school leavers across South Africa face this frustrating predicament as well as a disheartening tough job market. The good news is Redefine Properties is solving this dilemma for smart young graduates, and setting their careers in motion to a brighter future. Redefine is recruiting graduates and school leavers from designated groups fresh out of university and school. It gives bright young stars, who have successfully completed studies in various disciplines such as legal, human resources, internal audit, finance and property related fields, as well as school leavers who may not have the financial means to further their education, the opportunity to gain one year of hands-on business experience with a paid learnership that will give their careers a powerful kick-start. Redefine's learnership programme will enter its third successful year in 2015 and has created an exceptional opportunity for promising graduates with their sights set on a career in the country's exciting and growing listed property sector. Starting with a humble five learners in 2013, the programme grew to 18 learners in 2014 and is expected to expand even further next year. Renske Coetzee, Redefine's Head of Human Resources, explains this learnership programme has far-reaching consequences for the graduate, Redefine, the property sector and the economy in general. Coetzee comments: "South Africa faces a shortage of skills and suitably qualified and experienced individuals.This also impacts the property sector, where we have access to only a small pool of quality employees.Our learnership programme creates an exciting opportunity for youngsters, and it also grows the number of qualified and skilled people entering our sector." "We believe our learnerships go a long way to create a better future for South Africa, the property sector and the next generation of business leaders." As one of South Africa's leading and largest JSE-listed property companies, Redefine is in a unique position to have deep and lasting positive impacts on boosting skills in the sector with its learnerships. By creating this opportunity, Redefine is also placing itself in the best position to become home to South Africa's most promising, skilled graduates. Half of the learners in this year's programme have been offered further work contracts with Redefine. Successful candidates benefit from structured learning which will earn them a recognised qualification in business administration, customised to the property sector and Redefine.They'll also get practical, on-the-job training in all facets of property management and be managed, coached and buddied by Redefine's experienced employees and managers. The sought-after learnership opportunities contribute to Redefine's positive impact on society and sustainability. At Redefine, we're people, not landlords and this sustainable human resources initiative furthers this position," says Coetzee. "We're real people who want to add value to our clients, our youth, our communities and our industry and we strive to be a preferred employer. We are committed to social responsibility and positive growth in all sectors in our society." Redefine is a component of the JSE Socially Responsible Investment (SRI) Index for its commitment to environment, society, governance, sustainability and climate change. It also debuted on the Dow Jones Emerging Market Sustainability Index in September 2014.
Redefine Properties is pleased to announce that it has been selected as an index component of the Dow Jones Sustainability Indices (DJSI) in recognition of Redefine's corporate sustainability leadership in the property industry. Redefine will be included in the Dow Jones Emerging Market Sustainability Index from 22 September 2014. The index is composed of emerging market sustainability leaders as identified by RobecoSAM through a corporate sustainability assessment.The index aims to represent the top 10% of the largest 800 companies in emerging markets based on long-term economic, environmental and social criteria. Redefine is one of only five companies in the real estate sector across a dozen emerging markets included in the index.It joins 17 other South African companies in the index of 86 components from 37 industries in 12 countries, including the likes of Woolworths, Standard Bank, Nedbank, Netcare, Barloworld and AngloGold Ashanti. Andrew Konig, CEO of Redefine Properties comments: "We have come a long way in our sustainability journey and, more and more, we are putting our commitment to sustainability into action.Our inclusion in the DJSI supports this and can give investors confidence that sustainability is a business imperative for Redefine." He explains the index serves as a benchmark for investors who integrate sustainability considerations into their portfolios. "This puts Redefine in a strong position to attract funds from capital owners who want to invest in sustainable businesses." Inclusion as a component of the DJSI is evaluated with the RobecoSAM Corporate Sustainability Assessment, which strives to identify the most sustainable companies in the world. Redefine's results outperformed the Emerging Markets Index's real estate industry average overall, as well as for all three dimensions measured: economic, environmental and social. RobescoSam Sustainability Investing considers climate change and energy efficiency of great importance for the real estate industry as buildings are responsible for about one third of global greenhouse gas emissions.Moreover, low-energy buildings that use innovative materials reduce the impact of volatile energy prices on the cost of management and ownership of a property.This results in high demand for green buildings. It also notes that, in addition to environmental issues, social responsibility and social integration are gaining importance in this industry. In the current volatile economic environment, community engagement and investments in areas surrounding properties are receiving increased attention to maintain asset values high and remain the preferred property owner for tenants.
Redefine Properties yesterday announced the appointment of Leon Kok as the company's Financial Director, effective 01 October 2014. Commenting on the appointment, Redefine CEO Andrew Konig said: "Leon is an accomplished executive with significant financial and operational expertise and will be an exceptional addition to our team. "As Financial Director, his significant business, financial, corporate and corporate strategy experience will add a valuable perspective to Redefine's board of directors. We look forward to benefitting from his insight and experience." A Chartered Accountant with an excellent blend of operational experience, sound business acumen and technical accounting knowledge, Leon joins Redefine from a 13-year career at Peermont Global Limited, last being Chief Operating Officer for this owner and operator of hotel, casino and convention properties since 2007. Prior to this Leon completed his articles and remained with KPMG until 2000 whereafter he moved to Brait SA as Group Financial Manager and then to Emperors Palace as Chief Financial Officer until 2006. Earlier this year, Redefine announced changes to its board of directors that reflect an important pivot in the focus of management and bolstered existing management with the addition of high quality industry experience. "The appointment of Leon supports Redefine's continuing evolution and strategy to focus on the diversity of experience and skill sets required to deliver and enhance value for shareholders," added Konig.
Redefine Properties will put green building in the spotlight and help steer South Africa's green journey into a bright future at the Green Building Council of South Africa's (GBCSA) 7th Annual Convention in Cape Town this week. By sponsoring two keynote speakers for the convention, Redefine is sharing the latest thought leadership with the property industry and delegates from many other fields of business that attend the event. Mike Ruttell, Redefine's Executive Director for Development, comments: "Green building plays a key role in our own sustainability journey.Because of our focus on minimizing the energy consumption of our buildings, managing the environmental impact of our properties, and building highly attractive and productive work spaces, Redefine aims to design all our new build developments to achieve a minimum 4-Star Green Star SA rating in line with the GBCSA assessment criteria." As a keen member of the GBCSA, the company has set goals for greening its buildings. These objectives include keeping up with the latest in renewable energy developments and other suitable and economically viable green alternatives. To do this, Redefine taps in to the latest thinking from the leading minds in sustainability, and it will share some valuable insights and benefits by sponsoring Anton Musgrave and Dion Chang as speakers at the GBCSA Convention. Anton Musgrave will call on his background in property to focus attention on driving sustainable growth and long-term relevance in a changing world.Musgrave is a futurist, business strategist, entrepreneur, and will discuss the strategic thinking and future innovative growth imperatives needed to endure as the world around us evolves. Innovator, creative thinker and trend analyst Dion Chang, will also speak on sustainability as a key consideration for tracking trends.His trend analysis firm Flux Trends specializes in tracking shifting social dynamics and understanding the consumer mind-set. The focus is translating global trends, including green building, to ensure relevance for South African business. With its hands-on approach to green building, Redefine has already achieved a 4-Star Green Star SA rating from the GBCSA for the design of its 90 Grayston Drive Premium Grade office development, which has positioned itself among South Africa's most innovative and recognizable buildings. Redefine has also submitted its development of the Webber Wentzel Head Office at 90 Rivonia Road Sandton for a four star green star rating, with features such as sustainable use of concrete and steel, photovoltaic cells on the roof, ice-storage air-conditioning system, a ventilated fade that reduces air-conditioning requirements, intelligent light switching, and utility meters on each floor. Redefine also has a number of quality green buildings and green star submissions in the planning phase. New buildings aren't Redefine's only focus on its green journey. Redefine is also in the process of transforming the "The Towers" (previously known as Standard Bank Centre) in Cape Town.This building is just several blocks away from Cape Town Convention Centre where the Green Building Conference takes place. The new flushed glazed system Further, across its portfolio, Redefine has also targeted installing energy efficient lighting, occupancy sensors and timers, switching off unnecessary equipment after hours via building management systems, and installing variable speed drives for air- conditioning plant. The theme for this year's GBCSA Conference is "It's time for Africa to Bringing it home". Ruttell says, "Redefine is pleased that, as we continue on our green journey, we'll be among those at the forefront of this important shift in ensuring the built environment is in harmony with the natural environment on our continent. Our green buildings benefit both our tenants and our environment by utilizing latest technology across the designs, drawing less from power the grid, reducing our carbon footprint, and therefore optimizing operational costs for our tenants."
The partnership between Buskaid Soweto String Project and Redefine Properties won the Development category of the 17th Annual Business Day BASA Awards announced last night. The awards are presented by Business and Arts South Africa (NPC) in partnership with Business Day and Hollard. They recognise and promote excellence and innovation in business support for the arts. Buskaid helps young black musicians in South African townships. Currently, there are around 115 children and young people enrolled in the Buskaid Music School and many more who dream of joining.In addition to providing a musical education, it promotes life skills, knowledge transfer, as well as full- and part-time employment to 35 dedicated performers and teachers. "We are thrilled that Buskaid's incredible work has earned such an esteemed recognition," says Marijke Coetzee, Redefine Properties' Head of Marketing and Communications. "Buskaid provides so much more than a music education, it shares life skills and opportunities for disadvantaged children to become tomorrow's leaders. It gives its young members a brighter future. We are proud to be associated with Buskaid." This far-reaching partnership supports Buskaid's vision that all township children will be given the opportunities to channel their creative energies and talents through learning and playing classical music to the highest international standards. Redefine, Buskaid's major sponsor, has played a key role in supporting its teaching and its growth. The seeds for Buskaid were first planted when British viola player Rosemary Nalden MBE, founder of Buskaid and Director of the Buskaid Music Academy in Soweto, heard a BBC radio interview in 1992 highlighting the difficult plight of young string players in Diepkloof. Compelled to take action, she enlisted a support of 120 of her professional colleagues who took part in a simultaneous 'busk' at 16 British Rail stations to raise money. She had no idea that by doing this she would come spend to so much time in South Africa to pursue her passion.Unfolding from Buskaid, Rosemary responded to requests from the local Diepkloof community and established the Buskaid Soweto String Project in 1997 to develop musical talent and the gift to perform in disadvantaged children from the area. "Buskaid has enjoyed a fruitful partnership with Redefine over several years. Even when the company went through a major merger and changes, their support has being steadfast, generous and grown," says Rosemary."This continued sponsorship has allowed Buskaid to provide an ongoing, sustainable and growing development programme. Redefine is at the heart of the project's collaborative community of sponsors." Marijke, who oversees the Redefine's CSI initiatives, believes it's important to have a good idea of the real needs of a project, and has gained a greater understanding of how Redefine can support Buskaid by visiting the school and connecting with its young musicians. From these visits and discussions several exciting projects and new focuses have emerged, including Buskaid's successful 10-day UK tour in July 2014. With sold-out performances and standing ovations wherever they went, Redefine sponsored a tour of the UK for the young musicians of The Buskaid Soweto String Ensemble. Marijke says: "This sponsorship was a natural extension of our continuing support of Buskaid." Under the Redefine banner, these young ambassadors showcased the talent and potential of our country and their flair for performing on an international stage in five concerts, delighting audiences with classical pieces, pop songs and township jives. The tour culminated in a flash-mob performance in London's bustling Trafalgar Square on Nelson Mandela International Day on 18 July, making international news headlines (see the video on Buskaid's YouTube page). "Through Redefine's sponsorship of, and work with, Buskaid, we actively make a positive contribution to our communities and the arts, for now and for the future," says Marijke. "By creating new horizons for its members, Buskaid inspires residents of Soweto, music lovers from across South Africa and audiences around the world." Buskaid's annual concert, sponsored by Redefine, takes place on Saturday, 6 September 2014 at the Linder Auditorium, St Andrews Road, Parktown at 7.30pm, and is set to inspire, delight and move audiences with a musical and visual showcase bursting with talent and featuring a wide range of music. Tickets are available from Computicket and more information can be obtained from Anne Bull at Buskaid on 011 442 9676 or www.buskaid.org.za.
The offer by Redefine Properties to acquire the assets of Fountainhead Property Trust fell somewhat short of the required 75% consent from Fountainhead unitholders at a general meeting this morning. The acquisition by Redefine and the subsequent winding-up of Fountainhead will therefore not be implemented.As a related party, Redefine was unable to vote its majority stake in Fountainhead. Andrew Konig, CEO of Redefine, commented: "Although there was a high level of voter support for the transaction, above 71% but it fell short of the 75% required. While we are disappointed by the result, it was not a completely unexpected outcome due to the fact that Fountainhead had been trading above the swap ratio since the transaction was announced. In addition, Redefine could not vote its majority stake, which amplified the support required to achieve the approval threshold. "An unfortunate consequence of this outcome for Fountainhead is that it will have to absorb transaction costs of R7.3 million." "As far as we are concerned it is business as usual going forward for both Fountainhead and Redefine."
Redefine Properties today announced two significant events that advance its growth strategy. Redefine has agreed to acquire a portfolio of 28 industrial properties from leading steel supplier Macsteel for R2.7 billion with a 12 year triple net lease. It has also secured a lease with IBM South Africa for approximately 10,300 m2 of offices in Redefine's newly completed green office building at 90 Grayston Drive, in Sandown, central Sandton. Commenting on these transactions, Marc Wainer, Executive Chairman of Redefine Properties, says: "These deals further our objective of accommodating leading businesses in a diversified portfolio of larger property assets with low-risk, high-quality, inflation-beating income streams." Wainer notes: "We are pleased to add Macsteel and IBM to Redefine's stellar list of quality tenants." The Macsteel transaction represents an attractive initial yield of 8.7% for Redefine that escalates at 8% per annum, with a further five year renewal option. The Macsteel portfolio covers a total rentable area of some 560,000 m2, with a small office component of around 12% of this area.The buildings are located across eight of South Africa's provinces, with 75% of this space concentrated in Gauteng. "This transaction will transform Redefine's industrial portfolio, increasing it from approximately R5 billion to R7.7 billion, lifting the weighted average lease period from 2.5 years to 5.5 years and will bolster the defensive component of the portfolio," added Wainer. This acquisition boosts Redefine's exposure to industrial property, better balancing its diversified commercial property portfolio. The Macsteel acquisition is subject to approval by the competition authorities and is expected to be effective by 1 November 2014. At Redefine's newly redeveloped premium-grade 90 Grayston office property, IBM will occupy (from 1 April 2015) just more than 55% of the 16-storey building on a 10-year lease.A further 1 500 m2 has also been let resulting in confirmed occupation of 66%. Strategically placed in the heart of Africa's business hub, Redefine's redevelopment of this property has earned it a Green Building Council of South Africa 4-Star Green Star SA rating which has positioned it among South Africa's most innovative and recognisable buildings. "90 Grayston is ideally suited to multinational businesses like IBM and will provide it with many unique advantages. This building is now de-risked and is one of Redefine's largest office developments to date and is tailored to meet our portfolio strategy."concluded Wainer.
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."
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 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 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.
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.
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 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."
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 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.