Redefine Properties has increased its holding in Ciref Plc - the AIM listed property investment company - to 61% in a series of transactions utilising cash transfer capacity of South African institutions, commonly referred to as asset swap.

Redefine joint CEO Marc Wainer says Redefine subscribed for £30-million of Ciref shares by following a rights issue which it funded by way of £9,5-million in cash via asset swap and by exchanging its entire holding of 204,3 million shares in Wichford Plc, which resulted in Redefine increasing its stake in Ciref from 29% to 55%.

Redefine has acquired a further 23 million Ciref shares for £12-million cash via asset swap increasing its stake in Ciref to 61%. 

The proceeds will be partially utilised by Ciref to acquire a 13% shareholding in Cromwell Group, a highly regarded property trust listed on the Australian Stock Exchange.  Redefine introduced the Cromwell transaction to Ciref.

The increased investment in Ciref is in accordance with Redefine’s stated objective of channeling international property investments through Ciref.

In an unrelated transaction Redefine increased its stake in Corovest Fund Managers Limited, the asset manager of Ciref and Wichford from 34% to 76%, at a cost of £13-million.

”The additional investments in Ciref and Corovest are in line with Redefine’s offshore strategy of investing a portion of its assets internationally. Where there are markets in distress, which is currently the case in the UK, Europe and Australia, there are pportunities for accretive acquisitions at yields superior to those that can be sourced in South Africa. 

“Ciref will take advantage of such opportunities and we will continue to build on the close relationship that has been forged and maintain an active interest in Ciref and Corovest,” says Wainer. “

Additional info on Ciref aquisition of Cromwell in December 2009

Ciref is now pleased to announce that, following satisfaction of required regulatory approvals, it has agreed the acquisition of a strategic stake in Cromwell Group, a listed Australian Property Trust (ASX:CMW) ("Cromwell"), through the subscription in cash for 104,750,000 new stapled securities (a 13.04% shareholding) in Cromwell. Accordingly, the suspension in trading of Ciref's shares will be lifted with immediate effect.

Cromwell is a stapled security consisting of an Australian Real Estate Investment Trust and a successful Australian property funds management business. The Cromwell group has a track record for developing high quality, high yielding investment products and delivering strong returns to investors.

Cromwell holds an AUD1.2 billion portfolio of Australian commercial property. With a 99.8% occupancy level and a heavy weighting towards government and blue-chip tenants this portfolio provides a stable income stream that contributes the majority of the Group's operating earnings. For the year ended 30 June 2009, rental income and recoverable outgoings was AUD112.5 million (2008: AUD89.7 million) with 51 per cent of rental income underpinned by government or government owned / funded entities, and a further 31% underpinned by listed companies or their subsidiaries.

The total distribution per security for the year ended 30 June 2009 was AUD0.09. As at 30 June 2009, Cromwell had gross assets of AUD1,308 million. For the year ended 30 June 2009, Cromwell reported a loss after tax and minority interests of AUD113.5 million (2008: profit of AUD119.9 million). The 2009 financial year was impacted by a number of non-cash one-off items including a loss from fair value adjustments and write downs of AUD150.1 million (2008: gain of AUD30.1 million). Adjusted profit from operations was AUD63.8 million (2008: AUD70.8 million).

Further information on the Cromwell Group can be found on its website: www.cromwell.com.au.

The subscription price is AUD0.70 per new Cromwell share (which compares with the closing Cromwell share price of AUD0.74 on 18 December 2009). Total consideration for the investment is £42.5m which is to be financed through the issue of 23 million new Ciref ordinary shares at 52p per share to Redefine Income Fund Limited (as announced on 22 December 2009), a bridging loan of £15m and internal cash resources.

In due course, Ciref intends to refinance the bridging loan and restore its cash resources with a further issue of new Ciref shares. A further announcement will be made in due course.

Commenting on the acquisition Ciref Chairman Gavin Tipper said "This investment, which is expected to be earnings enhancing for Ciref, further develops Ciref's position as an international property investment company.

Although the investment is in a geographical area outside of the Company's traditional investment location, this is an exciting opportunity to invest in a high quality, high yielding property portfolio which should significantly enhance the quality of Ciref's future earnings".

No statement in this announcement is intended as a profit forecast and no statement in this announcement should be interpreted to mean that the earnings per Ciref ordinary share for the current or future years would necessarily match or exceed the historical published earnings per Ciref ordinary share.