Redefine to invest in development projects

Posted On Tuesday, 02 August 2011 02:00 Published by eProp Commercial Property News
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Redefine Properties is investing more than R680m in development projects as it enhances its portfolio and disposes of stock that no longer fits its portfolio profile.

Keillen NdlovuSA’s second-largest property group, Redefine Properties, is investing more than R680m in development projects as it enhances its portfolio and disposes of stock that no longer fits its portfolio profile.

Redefine group development manager Mike Ruttell said yesterday that the R680m related to development projects that had already been approved for the next financial year, and would "no doubt" increase as new projects were passed by the company’s investment committee.

Stanlib’s head of property funds, Keillen Ndlovu, said Redefine’s assets were largely viewed as inferior by the market. "It is great to see management aggressively embarking on improving the quality of the portfolio, more so at decent yields of 9,25%-13%," Mr Ndlovu said.

The group has sold 22 properties valued at R499m since September. They were sold at a yield of 9% and a surplus on book value of R78m.

It plans to sell 150 properties worth R2,9bn and acquire income-producing properties worth more than R3bn. Mr Ruttell said the yields on the new projects vary from about 9,25% — where projects were being undertaken for long-term investments or to maintain asset value — to 13%, which was yield-enhancing for the portfolio as a whole.

The largest project, valued at R336m, is the new distribution centre for Pepkor Retail in Isando, Gauteng. The project, begun in April last year, includes the development of an additional 66475m² of warehousing and distribution infrastructure that would link to the existing 40038m² distribution centre by an overhead conveyor system.

Mr Ruttell said the project was expected to be completed in June next year and be ready for trading in September next year. "On completion, the distribution centre will offer a total of 106513m² and will be the largest industrial property in the Redefine portfolio." Also in Gauteng, Redefine’s R40m extension to the Jewel City precinct in the Johannesburg CBD, which started in November last year, was on track for completion in November next year.

In Cape Town, Redefine is embarking on a R77,5m refurbishment of Shoprite Park Parow. The project, which is due to begin this month, includes a refurbishment of the entire 33352m² centre and the establishment of a China Town retail offering, consisting of 62 Chinese shops, a refurbished Shoprite Super Store, 7100m² of line shops, upgraded malls and a new facade to the building. Redefine is also investing R32m on phase 2 of CTX Business Park in Airport Industria near Cape Town International Airport.

In Burgersfort in Mpumalanga, Redefine is developing a 32000m² shopping centre, Tubatse Mall, in partnership with Abacus Asset Management, for ultimate ownership by Redefine. The centre will be developed at a combined capital cost of R520m.

In Hammanskraal, Redefine is developing a new 3437m² Shoprite store and new taxi rank at a capital cost of R36,6m.

Last modified on Thursday, 24 April 2014 17:32

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