Johannesburg - JSE-listed Redefine Properties said yesterday that it would broaden its offshore footprint after it declared an interim dividend and raised its revenue.
The firm said it had broadened its offshore footprint through an initial 75 percent investment into a e1.2 billion (R20.4bn) high-yielding commercial platform comprising 18 properties in the rapidly expanding Polish market.
Read: Redefine Properties: Talks progress on offshore assets
It said the initial stake would be reduced to 49.9 percent as a result of a placement of shares with co-investors.
The co-investors will be unveiled later this year.
Chief executive Andrew Konig said the acquisition would be implemented fully next month. He said the core offshore strategy would be to exploit the attractive offshore yield spreads, where debt funding could be locked in for five years at low rates. He said the offshore portfolio would grow from 20 percent to 25 percent once the company’s groundbreaking Polish deal kicked in.
“Local property fundamentals remain challenging, with issues like electricity price increases, illiquid capital markets 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,” Konig said.
Redefine has a 30.1 percent stake in the London and Johannesburg-listed Redefine International. In Australia, it owns half of Northpoint Tower valued at R6.5bn, and 25.5 percent of Australian Securities Exchange-listed Cromwell Property Group.
The company grew its distributions a share by 6.9 percent to 41.7c in the six months to February compared with the previous corresponding period.
Distributable income increased by 29.3 percent to R1.9bn in the same period.
Konig said operating margins were maintained despite the tough trading conditions. He said Redefine had seen its local operations increasing distributable income by 22 percent to R1.5bn and the international portfolio was up by 66.8 percent to R402m.
“The income-producing assets under management increased by R4.8bn to R67.8bn with overall total assets now standing at R74.5bn,” he said.
The board declared a dividend of 41.7c per share, up by 6.9 percent from the previous period.
“We have successfully recycled capital domestically to fund development as well as new acquisitions,” Konig said.
The company’s diversified, local property portfolio was valued at R54.3bn and the group’s international real estate investments, valued at R13.5bn represent 19.9 percent of total property assets and provide geographic diversification into the UK, German and Australian property markets.
Konig said the bulk of Redefine’s local strategy would be centred on existing properties and servicing its significant development pipeline.
He said leases covering 282 070 square metres were renewed at an average rental increase of 4.3 percent, with the retention rate at 83 percent.
During the period, Redefine also concluded an agreement with Delta Property Fund, which acquired about 60 percent of this portfolio valued at R1.3bn for 162 million shares at an issue price of R7.75 a share.
The firm has also completed projects totalling R1.8bn in the period, representing investment of R700m, outgunning acquisitions of about R400m.
Disposals amounted to R1.2bn, while new development projects with an approved value of R2.3bn are in progress.
Redefine shares fell 3.25 percent yesterday to R11.62.
BUSINESS REPORT