Redefine acquired Linpac Packaging - an industrial property in Cape Town - for R100-million, and an Edgars retail property in Johannesburg for R105-million.

Agreements have been signed to purchase the Deneys Reitz office building in Sandton for R127-million and Cornerstone House, an office complex in Crown Mines, for R182-million. These acquisitions are subject to Competition Commission approval. 

Redefine executive director, Mike Flax, says the company’s acquisition strategy is to focus on A-grade properties with values in excess of R50-million, located in core markets. “We foresee the average acquisition price exceeding R100-million, which will enhance the quality of the portfolio, increase the average property value and diversify the fund’s income base across different asset classes and core markets,” he says.

Redefine added to its industrial portfolio, with the acquisition of the Linpac Packaging complex in Montague Gardens for R100-million. The complex consists of four high quality buildings with a combined lettable area of 34 000m2. The complex is currently let on a triple-net lease for a period of 10 years, with an initial yield of 10,6%.

Redefine acquired a 16 867m2 retail building let on a triple-net lease to Edgars as the head lease tenant for 10 years at an initial yield of 10,9%.

The Deneys Reitz building is being acquired on an initial yield of 10% and provides 8 300m2 of office space in the heart of the Sandton business district, diagonally opposite the JSE. Deneys Reitz will continue to occupy the building until October 2010, when it relocates to newly developed premises. Redefine is planning to upgrade the building once the tenant vacates, and is confident it will be re-let once the upgrade is complete.

Cornerstone House is being purchased for R182-million with an initial yield of 13,1%. The modern, state of the art office building offers 12 000m2 of office and ancillary space on a stand-alone site within the De Beers business complex near Crown Mines. The property fits the profile of properties in the Redefine portfolio. The lease with the single tenant expires in 2015, with a perpetual option to renew.

Flax says that aligned with the acquisition strategy, Redefine will also look to gradually dispose of non-core properties that do not hold strategic value. “Some of the properties valued at less than R50-million will be sold, as well as properties located in non-core markets with declining growth prospects, or properties geographically located in markets that do not allow for ease of on-site management,” he says.

Since 1 September 2009, Redefine has transferred four non-core properties with a value of R52 million on an aggregate yield of 9,3% and has disposed of a further five non-core properties for R109,2-million. Two vacant industrial properties in Epping, namely Premquip building and Meditek were sold for R17,3-million and R19,4-million respectively. In the office portfolio, Stansure House in Braamfontein was sold for R20,5-million, Union Club in Durban was sold for R12-million and Northstate in Johannesburg was sold for R40-million.

“The properties posed probable risk in terms of prolonged and increased vacancies, or in areas of decreasing economic growth potential, and offered no feasible redevelopment opportunities. The properties were all sold in excess of book value,” says Flax.