Redefine in talks to get listing approved

Redifine Property St George's shopping centre in UK.Photo Supplied

Redifine Property St George's shopping centre in UK.Photo Supplied

Published Oct 31, 2012

Share

Roy Cokayne

REDEFINE International (Redefine) is in discussions with the Reserve Bank and the Treasury to get regulatory approval for a simplified ownership and listing structure.

The group, in consultation with its tax advisers, is also reviewing the possibility of converting to either a UK real estate investment trust (REIT) or South African REIT.

Mike Watters, the chief executive of the property investment company with dual listings on the London Stock Exchange and JSE, said yesterday that its ownership and listing structure was complicated and “somewhat unwieldy”.

He said it had been in discussions with the Reserve Bank and the Treasury for the past six months about approval for a simplified ownership and listing structure.

The Redefine International Property Group comprises Redefine International (RIPLC) which is listed on the London Stock Exchange, and Redefine Properties International (RIN) which is listed on the JSE.

RIN has a 65.7 percent shareholding in RIPLC.

However, Watters said RIN had 35 percent of the combined entity and Redefine would like to have a single entity with a dual listing in much the same structure as competitors such as New Europe Property Investments and Capital and Counties Properties.

Watters said Redefine had been arguing it was not any different to these companies and the Reserve Bank would not be protecting foreign exchange by allowing Redefine to simplify its structure because it had allowed the company to buy assets outside South Africa.

“They [the Reserve Bank] have not said no but have also not given their approval and are dragging their heels but we will continue to lobby,” he said.

Watters said the main reasons for wanting to convert to a REIT were that it had effectively become the industry standard and if a company wanted to attract institutional funds it needed to offer the structure these funds needed and for tax purposes.

He said the UK government was trying to ensure offshore firms like Redefine came into their REIT regime but believed South African REIT legislation was imminent. The company could not convert to a REIT in both the UK and South Africa because it cannot be tax resident in two countries.

Watters was hopeful it would be able to make an announcement about both its conversion to a REIT and a simplified ownership and listing structure by the end of the first quarter next year.

Redefine International yesterday reported a 6.5 percent growth in distributable earnings to £4.40 (R61) in the year to August.

The company’s adjusted net asset value at year-end was £36.20 a share, 16 percent lower than in February.

Capital raisings undertaken after year-end by Redefine Properties International raised more than R1bn and £127.5 million before costs.

“It [the group] is in a strong position to take advantage of distressed property offerings,” Watters said.

Redefine Properties stock declined 2.19 percent to close at R8.92 on the JSE yesterday.

Related Topics: