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.