CAPE TOWN - Tight balance sheet management and the pursuit of delivering sustained value was providing property group Redefine with a buffer against economic challenges, chief executive Andrew Konig said yesterday.
Weak business sentiment, load shedding, “confidence-zapping” policies and uncertainty about prospects were constraining domestic growth prospects and impacting the outlook for the local property sector, he said in a pre-close briefing.
Global macroeconomic and political uncertainty, the coronavirus and climate change risks were additional factors weighing on prospects, he said.
“A robust balance sheet remains a critical lever to absorb the risks as weak local property fundamentals are likely to prevail in the medium term,” he said. “Redefine is on track to deliver sustained value and ensuring it is well insulated from the storm.”
Redefine shares yesterday plunged 6.5percent to close at R5.90.
Distributable income per share for the 2020 financial year was set to be between 5-7percent lower than 2019, with recycling activities also having a dilutionary effect on earnings.
“Our emphasis on managing and improving recurring income continues, with non-recurring income being phased out. We have also (started) to dispose of non-core assets,” to lower the loan-to-value ratio, he said.
Solid progress had been made with disposals, which it announced last year. This would also simplify and streamline the property asset platform. Non-core asset sales across the portfolio were targeted at R8billion.
The sale of local assets, sale of a 48.5percent interest in European Logistics Platform and the sale of interests in student accommodation were among the major non-core assets currently on the agenda.