Fitch Ratings-London/Johannesburg-03 November 2006: Fitch Ratings has today affirmed Redefine Income Fund Ltd's ("Redefine") National ratings at senior secured 'A-(zaf)(A minus)', senior unsecured 'BBB(zaf)' and at 'BB(zaf)' for its subordinated debentures. The Outlook remains Stable.

The affirmation reflects a 23% increase in Redefine's operating income for the year ended 31 August 2006 (FY06), an improved operating margin and continuing borrowing discipline. The affirmation also takes into account Redefine's proposed bid for 100% of Spearhead Property Holdings Ltd, ("Spearhead") a Cape Town-based property loan stock company.

Fitch considers that the acquisition of Spearhead will broaden Redefine's owned property portfolio and give it greater exposure to the Cape Town property sector, where Redefine has historically been under-represented. Importantly, Fitch notes that the transaction is expected to be yield-enhancing for Redefine. However, the transaction may result in higher debt (depending on how many Spearhead unitholders choose the cash versus the Redefine equity offer) and may push up loan-to-value gearing to near Redefine's internal limit of 45%. The relatively large acquisition will take time to settle and comes with a number of substantial development projects totalling about ZAR600 million, which are on-going. The operating environment has also become more volatile, with three interest rate increases totalling 1.5% this year and with at least another 0.5% rise expected in the next few months.

Redefine's bid for Spearhead was approved by shareholders on 27 October 2006 and finalisation of the transaction is dependent on approvals from the competition authorities and High Court sanction, which are expected on 9 and 10 November 2006, respectively.

Spearhead has a portfolio of properties valued at ZAR1,288m (at 30 June 2006), situated in the greater Cape Town area, with roughly 80% of the portfolio split between office accommodation and retail space (by revenue) and the remainder in industrial properties.

Redefine has grown its non-current assets (listed securities and property portfolios) by 53.5% (including fair value changes) in FY06. Listed securities include investments in Hyprop Investments, ApexHi Properties 'A' and 'B' units and Sycom Property Fund. The property portfolio retained its strong profile, mostly A-grade properties with good tenants, long-term leases (55% of leases expiring in 2010 and beyond) and an overall vacancy factor of 2.7%. Acquisitions of non-current assets totalled a relatively high ZAR2,054m, funded through linked unit issues, increased net debt (ZAR947m) and asset disposals. Loan-to-value gearing was marginally higher at 41.2% (40%).

Redefine is a Johannesburg-based property loan stock company, which has a unique hybrid structure generating rentals from owned commercial properties and receiving income distributions from a portfolio of JSE listed property loan stock companies and property unit trusts.

Contact: Alistair Crosbie, Marie du Plooy, Johannesburg, Tel: +27 11 516-4900.

Media Relations: Mayra Cunningham, London, Tel: +44 20 7417 3557.

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