Redefine boosts property sector

Posted On Friday, 05 October 2001 03:01 Published by eProp Commercial Property News
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Property loan stock company Redefine Income Fund produced headline earnings of 35c a linked unit out of revenue of R215-million during an extremely busy year which ended August.

Property-Housing-ResidentialThe performance under review represented an income yield of 13% and capital growth of 34% on the review period's closing price of 270c a linked unit.
Such high returns are boosting the profile of the listed property sector of the JSE Securities Exchange SA, making it an important investment asset class.
The year ended August saw Redefine grow its portfolio to become one of the largest listed property vehicles on the JSE, with assets worth R1,6-billion.
Redefine's portfolio was also being restructured to reduce exposure to the retail property sector in favour of the office sector. Its exposure to retail property was reduced from 38,1% to 23%.
The restructuring partly came through the sale of 18 properties for a total of R177-million. Most of these were acquired as a portfolio by another property loan stock company, ApexHi, in exchange for ApexHi A and B class linked units.
Redefine is the only hybrid property loan stock company on the JSE, meaning it invests directly in properties and in listed property vehicles like ApexHi.
The group strives to maintain a 50-50 split between its direct property holdings and listed property securities. Recent transactions have, however, left the group with a 67% bias to securities. 'Restoring the preferred 50-50 investment relationship provides a solid opportunity to restructure and increase the property portfolio at yields more in keeping with Redefine's forward planning,' said CEO Peter Penhall.
The group's revenue for the year under review was derived evenly from its hybrid asset base with directly owned properties contributing R107,2-million and investments in listed property firms producing R106,9-million of total revenue.
'It has been a year of solid progress with steady achievement of our goals.'
As a result, he said, there had been a shift in the market's initial caution about the pioneering hybrid nature of Redefine 'to one of ready acceptance'.
He said strong management of the balance sheet sharply reduced the company's exposure to property portfolio debtors during the financial year.
He said the property portfolio lease profile was extremely sound, with 30% of current leases expiring after financial year 2006.
The net present value of contractual rental income from this long-term lease profile equated to 105c a linked unit. About 90% of Redefine's listed securities portfolio was held in six prominent counters: ApexHi, Capital, Grayprop, Hyprop, Marriott and Sycom.
In total, the group is invested in 14 listed property companies with a total market value of about R902-million.
The group aimed to raise its portfolio to R2-billion in the near future.
Redefine's linked unit price closed unchanged at 275c yesterday.

Last modified on Saturday, 26 April 2014 15:31

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