Listed property loan stock company Redefine Income Fund is forecasting distribution growth of 19% for the year to August next year.

The growth, which is expected to be significantly above the expected average from the listed property sector, would see Redefine delivering a distribution of 50,62c a linked unit, compared with 42,7c a linked unit for the year to August this year.

Redefine, which was one of the top performers this year in terms of distribution growth, on Wednesday announced a first-quarter distribution of 11,8c a linked unit for the period to November this year.

The company said this included income from Spearhead Property Holdings from July to this month.

In July Redefine announced it had made a takeover bid for Cape Town-based listed property company Spearhead in a deal valued at R1,3 billion.

The acquisition has since received all the necessary regulatory approvals.

Redefine CEO Brian Azizollahoff said that apart from the additional income from Spearhead, the strong first quarter distribution growth was "influenced by a noteworthy growth in income from its portfolio of listed counters and its acquisition of CBS Property Portfolio linked units".

He said the strong forecast growth had a "lot to do with the acquisition of Spearhead" and that this "vindicates our decision to acquire Spearhead".

"It's yield enhancing," said Azizollahoff.

He said Redefine had acquired 12-million units in CBS during the first quarter, giving the group more than 7% of CBS.

Azizollahoff said Redefine thought CBS had a "good portfolio" of properties and that the interest in CBS would be yield enhancing for Redefine.

"CBS management is (also) sound," he said.

Azizollahoff said that following the acquisition of Spearhead, about 60% of Redefine's property portfolio consisted of fixed property, with 40% consisting of investments in listed property stocks.

Following the Spearhead transaction, Redefine is the second-largest property company by assets in the listed property sector, with assets worth R8,1 billion.

Growthpoint Properties is the sector's largest company by assets, with properties worth more than R15 billion.

With a market capitalisation of about R5,5 billion, Redefine is now the fourth-largest listed property company in terms of market capitalisation.

Angelique de Rauville, MD of Investec Listed Property Investments, said Redefine would "definitely be a top quartile performer in terms of earnings growth".

De Rauville said this was likely to translate into unit price appreciation.

Business Day
 
 

 
 
Publisher: I-Net Bridge
Source: I-Net Bridge