Johannesburg, 14 March 2024 – JSE-listed real estate investment trust Redefine Properties (JSE: RDF) has successfully raised R781 million via a public bond auction, driven by strong demand from funders and healthy liquidity in the debt capital markets. Redefine's bond issue was oversubscribed by 1.77 times, receiving R1.4 billion in bids that resulted in an allocation of R781 million across the five- and seven-year tenors at an auction held on 11 March. Five-year notes of R377 million were placed at a margin of 149bps, and seven-year notes of R404 million were placed at a margin of 165bps, both over a three-month Johannesburg Interbank Average Rate (JIBAR). The issue was launched through Redefine’s JSE-approved R30 billion domestic medium-term note programme, with the nominal R377 million and R404 million in unsecured floating rate notes set to mature in 2029 and 2031 respectively. "We are pleased that we were well supported by our funders in the debt capital market, with robust demand received from institutional investors," said Ntobeko Nyawo, Chief financial officer at Redefine. "The longer-dated seven-year bond in particular attracted substantial interest with just over R400 million issued at the lower end of the market pricing guidance. The bond issuance will extend Redefine’s debt maturity profile and further diversifies our debt sources," he continued. Nyawo explained that the proceeds from the bond will be used to repay upcoming bond maturities during FY24 and as such, Redefine’s loan-to-value ratio will remain unchanged. Redefine’s portfolio, valued at R96.8 billion (FY22: 88.9 billion) is anchored in South Africa through directly held and managed retail, office, and industrial properties and is complemented by a strong presence in retail and logistics property assets in Poland. By volume, Redefine’s shares are among the most actively traded in the SA REIT sector, making it a highly liquid, single-entry point for investors to gain exposure to the South African and Polish real estate markets.
Johannesburg, 27 February 2024 – Real estate investment trust (REIT) Redefine Properties (JSE:RDF) stated today in its pre-close update for the half-year ending 29 February 2024 that the business has started the year on a positive note. Despite a challenging macroeconomic backdrop, operating metrics across the board are showing improvement. CFO Ntobeko Nyawo said positive operational metrics across the company's South Africa portfolio have supported organic growth and delivered a consistent operating profit margin of 78% (FY23: 78%)."Market recovery and demand for A- and P-grade office space in South Africa continues in select nodes as a result, office rentals are gradually recovering on the back of improved activity in key nodes like Sandton," COO Leon Kok explained. "The effect of increased asking rentals is being monitored to ensure that Redefine's rental rates remain competitive in the sector."Demand for new industrial developments in prime locations remains high, particularly for racked warehousing. As such, Redefine is focusing on renting out rack and shelving systems to increase tenant retention and revenue.The company's investment at Brackengate 2 Business Park, one of the Western Cape's prime business precincts, is growing with a warehousing and complementary office space development recently completed for the Herholdt's Group, a distributor of solar energy and electrical equipment. The Massmart DC wheeling project at Brackengate is being targeted for commissioning in October this year. This is a component of Redefine's strategic investment focus on resource-efficient green initiatives and creative solutions to reduce reliance on municipality supplied services and secure a stable energy supply. Kok added that the group is very excited about its solar PV pipeline that includes installations of 27,2MWp currently in progress and feasibility studies being undertaken on future projects that could add additional capacity of 10,7 MWp of renewable energy supply."We continue to incorporate ESG into every aspect of the business by embracing and encouraging stakeholder collaboration in order to broaden the scope of our environmental initiatives," Kok said.To this end, Redefine is currently investigating ways to increase the efficiency of diesel usage and standby power system recoveries across all its retail assets.While operational momentum is continuing across the retail portfolio, high interest rates and disposable income pressures have hindered sales growth. As such, tenant retention and vacancy reduction are key priorities for management. Redefine is in collaboration with retailers to increase exposure to essential services and value-focused brands – these occupy 37% of retail gross lettable area and are forecast to improve to 40% in the short term. "While Redefine's improved operating metrics have been offset by higher interest rates, there is optimism that interest rates have reached the zenith of the current tightening cycle," Nyawo commented. "It is anticipated that rates will begin to ease during the second half of 2024. This would be positive for the investment return profile of our business."Aside from interest rates, other macroeconomic challenges have also softened, such as South Africa's energy supply crisis and Poland's energy cost crisis. Meanwhile, Poland's political transition is predicted to benefit the country's economy overall and commercial real estate, in particular.Redefine, through its Polish logistics platform European Logistics Investment (ELI) with an income generating asset platform valued at EUR966 million, is maximising investor returns through strategic portfolio management and development. This includes recycling non-core assets to fund new developments at attractive yields.The report notes that the warehouse market in Poland is seeing green shoots of recovery after a marked slowdown in the first half of 2023, based on the expectancy of interest rate cuts in the second half of 2024. CEO Andrew König said, "Regarding the Polish market's potential, we are still optimistic. Exposure to Polish retail and logistics provides stability to our portfolio. The retail market in Poland is at the final stage of recovery from the pandemic, including sectors that suffered most (entertainment and gastronomy), which are now finally also on a growing path."He said, however, that there are some clouds on the horizon that could unsettle this optimism. "National and global elections, continued parastatal frailty in South Africa, and geopolitical instability are issues that we will keep our eye on. But we won’t allow these variables, which are largely out of our control, to distract us from what matters most. We simply need to remain laser-focused on the execution of our strategic priorities, to adapt to an ever-changing landscape." Liquidity risk management is still crucial and Nyawo said that "Redefine's low risk debt maturity profile, with less than 14% of our debt maturing per year up to FY27, supports its long-term value creation prospects".He added: "Refinancing of FY24 debt maturities is progressing well, with affirmation of support from funders and healthy liquidity levels in the debt capital markets. In Poland, we are proactively focusing on Henderson JV, which EPP owns 30%, as it has a higher loan-to-value level of c.60%."Looking ahead, König said Redefine will remain focused on conservative balance sheet management to enable sustainable growth as market dynamics continue to evolve. "We aim to build a quality, diversified portfolio that delivers sustainable risk-adjusted returns, while investing in and transforming our human capital to enable creativity and foster innovation. In opting for the upside, the one thing we shouldn’t be surprised about is that there will be surprises in 2024 and that within each surprise lies an opportunity."The company said it is pleased to maintain its earnings guidance DIPS range of between 48c and 52c in a challenging operating context.
By Fiona Arthur, Procurement category manager at Redefine Properties14 February - When it comes to property development and management, a component that has gained attention recently has been the business of waste. As many organisations prioritise sustainability and sustainable business practices and integrate them into their operational strategy, waste gathering and disposal have become key factors in lowering emissions and minimising our environmental impact. Many buildings around South Africa, ones that comprise property companies’ portfolios, are confronting how they deal with the waste generated by tenants. Recognising this, property owners are stepping up to facilitate and coordinate greening and recycling initiatives on behalf of their tenants. This proactive approach enables tenants to meet their green objectives effortlessly, allowing them to focus on their core business activities. By taking the lead, property companies not only improve their environmental footprint but also add significant value to their services, fostering a collaborative effort to make buildings greener. This starts by addressing how we, and the rest of the country, deal with waste. The state of South Africa’s landfills It’s easy to not think about what happens to your waste after you throw it in the bin and it’s out of sight. While many countries around the world have made progress regarding how they deal with waste, South Africa has been on the back foot. We face a growing challenge, as industry experts report our country’s landfills nationwide are filling up at an alarming rate. Many landfills are being filled beyond permitted volumes and many have since closed putting additional pressure on the existing landfills, with municipalities unable to deal with the problem due to a lack of skills, funds and machinery. This is also despite South Africa having some of the best legislation in the world regarding waste management. However, landfills are not a quick and easy fix to meeting South Africa’s disposal requirements. It takes several years to build a landfill – it can take at least nine to 12 months to obtain environmental approval – and even when it reaches the end of its lifecycle, it’s subject to a recommended post-closure monitoring period of up to 30 years. So, what other options do we have? Separate at the source Properties will generate waste during their lifespan, depending on how long people or businesses occupy them. The first step in dealing with that is knowing what makes up the volume. According to waste stream audits conducted on Redefine properties as part of our rationalisation process, 61% of generated non-recyclable waste was found to be organic (food, biodegradables, etc.). A third of all food produced globally goes to waste, contributing to 8% of annual global greenhouse gas emissions. Organic waste has 25% more global warming potential than other grades of waste, like paper or plastic, due to the Co2 and methane gases it emits as it decomposes making it a prime focus area. If organic waste is not separated, it can contaminate recyclable materials such as cardboard and paper and impact the ability to recover these materials. The key to managing a property’s waste stream is to separate at the source. If you can separate organic waste at the source, you increase the amount of waste you can repurpose or recycle. According to our estimates, in doing this, companies can increase their recycling rates by up to 80% per property. Provided companies get buy-in from tenants, especially businesses such as restaurants and others in the food industry, they can substantially minimise the amount of waste that goes to landfills. It's not just about being sustainable. There is a financial incentive for such initiatives. Managing waste upstream proves to be more cost-effective than managing it downstream. Companies could hire sorters and pickers to handle the waste for them, but that is throwing unnecessary money and labour at the problem. Additionally, by handling waste management processes internally, companies can pass the resulting savings onto their tenants. Furthermore, in the broader economic sense the recycling of waste to recover and then reprocess materials into new products, known as a circular economy, can help the local economy, as we stand 80% of recycled material is used within South Africa. Waste management and disposal in the 21st century A prime example of effective, internal waste management can be found at Blue Route Mall, located in the Tokai suburb of Cape Town. After conducting an audit, engaging with food industry tenants to determine potential volumes, and following a trial period with waste management company Don’t Waste, Blue Route Mall was officially recognised by the City of Cape Town as an entity that produces a significant amount of waste, a status termed 'waste generator.' This designation came complete with a tailored waste management plan, reflecting the mall's substantial role in waste production and its commitment to responsible waste handling. Waste is collected twice a day from all of the mall’s tenants. The waste is then weighed, and a record of each tenant’s weight is kept. Staff check the waste to ensure there is no contamination. Each tenant adheres to a waste segregation plan with colour coding and bin labelling for each type (cardboard, food, dry mixed recycling, and general waste). Don’t Waste manages on-site waste operations (including sorting and processing), maximising the recovery of recyclable items, while minimising that which is sent to landfills. The comprehensive approach at Blue Route Mall exemplifies the broader movement towards sustainability in property management, highlighting the importance of collective action. This initiative underscores the potential of sustainable practices to drive significant environmental benefits and foster a culture of responsibility.Redefine Properties' commitment to retrofitting its properties with internal waste services by Q2 2024 amplifies this ethos, demonstrating a unified effort towards a more sustainable future. South Africa's vibrant potential for sustainability innovation is evident, and by continuing to invest in responsible practices, we can unlock new opportunities that benefit both the economy and the environment. The journey of Blue Route Mall serves as a powerful reminder of the impact achievable when we embrace sustainable solutions, reinforcing the idea that real change comes from not discarding, but rather recycling our innovative ideas into effective actions.
By Scott Thorburn, Redefine National asset manager, office7 December 2023 – Although attention has been drawn to the swift post-COVID recovery of Cape Town's commercial real estate sector, Gauteng – the nation's economic engine – is faring better than some may have thought, with occupancies coming down and rentals on the rise in quality buildings in a number of nodes. Many office buildings in sought-after locations in Gauteng that weren’t fully let prior to the arrival of the pandemic are now fully let or have minimal vacancies and are showing gradual rental growth.In contrast to many other parts of the world, there has been a noticeable increase in businesses across the country returning to the physical workplace, albeit with a new set of requirements. This is contributing to a high volume of deals, although smaller in nature, in key nodes, such as Bryanston, Sandton, Rosebank, Midrand, Greenstone and Struben’s Valley, where vacancies in the Redefine portfolio are currently lower than at pre-COVID levels.Demand for quality spaces in key locations It's reasonable to assume that normal property fundamentals have returned to Gauteng as demand has increased. Tenants are seeking high-end buildings in prime locations with easy and convenient access to services and facilities.Companies are willing to spend more to create a better work environment for staff. One that’s comfortable, accessible, and has nearby amenities that will help attract workers back to the office. Although companies are occupying smaller spaces, the properties they choose to occupy are of high quality and offer, or are close to, excellent amenities.As organisations are looking for quality buildings, it is imperative to refurbish lower grade properties in prime areas to turn them into more premium assets. These quality buildings in sought-after nodes have very high occupancy levels. Ongoing refurbishments of lower grade properties will help reduce the province's overall office sector vacancy.Increased occupancies bode well for rentals and valuationsThe decrease in vacancies and rise in occupancies is definitely encouraging for Gauteng's rental growth. When discussing rentals, one might assume that the rand per square metre (rand/sqm) rate in Cape Town is higher. However, aside from the Waterfront node, rental rates are actually modest in the Mother City, even with the low supply and high demand.While some of the best, fully occupied buildings in Sandton are fetching around R230/sqm, an iconic P Grade building in one of Cape Town's sought-after nodes might struggle to reach a rate of R190/sqm. However, commercial rentals in Cape Town have seen sharp increases in the last six months and will continue to firm, resulting in this rental gap narrowing.Property values measured at rand/sqm are strongly influenced by rental rates, which reflects the strong performance of the key nodes in Gauteng, while Cape Town generally has lower rand/sqm valuations. The highest-value areas in the Redefine portfolio are Sandton and Rosebank. These nodes continue to perform well for Redefine.Upsides exist in Gauteng's office sectorThe post-COVID performance of Cape Town's office property sector has been nothing short of extraordinary. The city experienced a perfect storm on the back of new organisations opening for business, a recovering local Cape Town economy, businesses’ calls to return to the office, increased loadshedding leading to more people needing to work in the office, and an influx of international call centre operations. Not to mention, the relatively superior service delivery provided by the City of Cape Town.Nonetheless, Gauteng can still be considered the financial hub in commercial property. Of course, Gauteng has its own set of problems that impede the sector's expansion in the province, which is experiencing not only a lack of municipal effectiveness and ever-increasing rates but also low economic growth.The lack of service delivery can be managed and tempered with a proactive approach by property owners. For instance, Redefine, alongside other property companies operating in the sector, has invested and been involved in city improvement districts (CIDs) in nodes such as Sandton, Rosebank, Illovo, Parktown, Braamfontein and Bryanston for a number of years.Where these CIDs are in place, the improved cleanliness, security, and quality of facilities in the area are noticeable, especially when one compares the state of the environment when leaving the CID areas. Water and electricity supply remain a risk across the country – not only in Gauteng. Property owners have mitigated this risk by ensuring standby supplies to properties; however, this solution is only effective for short-term supply issues. Sticking to age-old fundamentalsThe approach that real estate firms in Gauteng should take is to never compromise on quality. If your building is empty, invest money in renovations. If you plan to buy, be aware of where to buy and make your purchase in the right node with the right amenities in close proximity. Being ahead of the curve in an area is the opportunity.Although the office market in Cape Town will undoubtedly continue to grow and present opportunities as new developments materialise, buildings are renovated, and rental rates rise, Gauteng should not be disregarded. If the province can realise economic growth and sort out service delivery issues, it is not unfathomable that the improvement in the commercial property fundamentals and the increase in returns in Gauteng can be as dramatic as that of Cape Town in the past 12 months.
7 December 2023 – With the negativity and resultant despondency that currently dominate the country's narrative, I believe this is a very important moment for organisations. It calls for a real and authentic connection with staff. There are concrete issues affecting us in various ways, but there is also an upside to almost everything. It’s crucial to engage in open dialogue around what we can do to make things better for our most important asset: our people.I set out on a mission that people who oversee a CEO's diary may find insurmountable: getting to know and interact with every single Redefine employee. In a series of small group sessions, I personally engaged with everyone in the company about what's keeping them up at night, the power of positive thinking, and the importance of sharing ideas to turn challenges into opportunities.These sessions illuminated our employees' abilities and capabilities, the obstacles they encounter both in and beyond the office, and the strategies we could implement to build resilience and foster positivity. Here are the five key things I discovered:Redefine is a tapestry of people with unique gifts and talentsExpressing and embracing who you truly are, and being your authentic self, is the ultimate differentiator in a people-focused company like Redefine. Being authentic not only makes us consistently present in our own way but also makes being who we really are less stressful. Authenticity facilitates diversity of thought, which is the foundation of innovation. It also enables Redefine's values to be lived through our responses.Declutter and pay attention to what really mattersThe pace and complexity of the world, business, and our personal lives contribute to increased stress levels and impact productivity, down time, and quality time with those nearest and dearest to us. By eliminating unnecessary distractions (such as reducing time spent on social media or tending to emails), focusing on what matters most, being honest about what you truly need or love, and setting realistic expectations, we can reduce the amount of physical and mental clutter. Then, we create a more organised, stress-free, and productive living and working environment.Everyone has a different perception of realityIt’s nearly impossible to realise our strategy, purpose, vision and mission, which form the foundation of everything we do, if we do not have complete clarity on them. Clarity is created through transparency, inclusiveness, simplification and attainable goals. This keeps us focused on the important things and prevents us from being side-tracked by uncontrollable factors, which allows us to accomplish our strategic goals and discover our true purpose.Wellness is predicated on maintaining balanceWork-life balance is essential for wellbeing, satisfaction, and avoiding burnout. Prioritising tasks, learning to say “No”, focusing on quality rather than quantity, and setting healthy boundaries alongside realistic personal and professional expectations are easier said than done. But these actions are very necessary to maintain a sustainable equilibrium between work responsibilities and personal life.It's time to focus on positivity Our sessions, which were held under the theme 'opting for the upside’, were centred on identifying the good despite of the bad things that surround us. By talking to colleagues about mindfully choosing to adopt a positive mindset, focusing on the variables under our control, and spotting the opportunity in every challenge, I began to realise how negative I had become in my thinking, my communication, and my approach. This was impacting my leadership mindset.This self-awareness led me to realise that opting for the upside is more than just a theme: it is a movement, a call to action for each of us to accept life as it comes and make the most of every circumstance. So, we decided that opting for the upside would be the theme for our annual integrated report and, by implication, part of our FY23 results. In presenting our results to investors, it became clear that opting for the upside is a much-needed boost for the real estate industry.As we navigate the path ahead, we want to thank our staff for their continued support and commitment to Redefine's growth and ongoing success, recognising that the power of diversity and the diversity of thought within our team are essential drivers of our innovation and resilience.
Monday, 6 November 2023. Real estate investment trust Redefine Properties (JSE:RDF), one of South Africa's leading REITs, has posted robust financial results for the year ended 31 August 2023, driven largely by the local portfolio's continued improvement in operational metrics and the growing contribution of EPP, the largest retail real estate asset manager in Poland by leasable area.Distributable income of R3.5 billion, representing distributable income per share of 51.53 cents for the year ended 31 August 2023, comes in higher than the midpoint of the company's guidance range of between 48 and 52 cents. The Group has a well-diversified asset portfolio that has grown by R7.9 billion during the year to a current value of R96.8 billion. A full year dividend of 43.80 cents per share was declared, increasing from 42.97 cents per share in FY22, which signals a healthy liquidity position and a continued commitment to rewarding shareholders despite the constrained environment. Earnings guidance for the 2024 financial year remains flat between 48 and 52 cents per share.Redefine CFO Ntobeko Nyawo says the sustained value creation is a result of "a stable and healthy balance sheet despite the volatile environment with a loan-to-value ratio of 41.1%, which is marginally outside our internally set medium-term optimal gearing range largely due to Rand depreciation during the financial year." He adds, however, that the Group's balance sheet holds sufficient short-term liquidity headroom of R5.5 billion – consisting of cash on hand and access to committed undrawn facilities. This, together with a flat debt maturity profile, places the business in a comfortable position to mitigate the anticipated volatility of the prevailing constrained capital environment. While the cost of debt on a weighted average basis across the Group ticked up by 110 basis points, from 6.0% in FY 2022 to 7.1% as a function of higher interest rates, Nyawo says the company is protected against rising interest rates and is well-hedged at 77.1% of total Group debt.Despite the headwinds and higher-for-longer interest rate environment, which impacts inter alia property valuations and fundamentals, operational performance and currency movements have offset this and resulted in a pleasing 6.4% increase in net asset value (NAV) to R7.66 per share.Nyawo notes that another good outcome for the business, and an example of focusing on "variables within our control" like operational efficiency, is healthy cash generation. With the collection ratio sitting at 101%, this demonstrates that the business can fulfil its primary goal of generating cash flow."The FY23 outcome is testament to positive operational performance and strong quality of earnings. It's a solid set of results that were produced not by relying on any once-offs but recurring income. That underpins the quality of assets in SA and Poland," he says.He says Redefine will continue to rely on positive operational strength of its overall portfolio, which will help the business to absorb some of the shocks of the interest rate environment.“Redefine's local portfolio maintained a stable net profit margin of 78% despite the cocktail of challenges absorbed, while EPP's net profit margin improved by a robust 9% to 74% in FY 2023. EPP's delivery in its first financial year of ownership in the Redefine stable shows that it has been restored into a yielding asset post the corporate restructure and now makes for a strong contributor to the Group’s earnings,” Nyawo says.Poland poised for growthCEO Andrew König says, despite absorbing some hard knocks this year, the results demonstrate that Redefine's business remains sound.The Polish economy has experienced challenges due to geopolitical tensions and resultant high inflation, which peaked in February but is now beginning to come down alongside interest rates. These factors have led to increased consumer spending.CEO Andrew König says this bodes well for retail powerhouse EPP, which has proved to be a strong contributor to the Group’s earnings despite negative news coming out of Europe.The company's Polish logistics platform has expanded by 275,014 sqm because of development activity completed during this period. The total gross lettable area is currently sitting at just under 1 million sqm, which König says puts Redefine in a commanding position in the logistics market in terms of size and scale.He adds that Redefine's foray into the self-storage market, which is still in its infancy compared to neighbouring countries, holds the potential to grow substantially. The company, through its acquisition of self-storage platform Stokado, has secured a development pipeline that will increase its net leasable area by about 26,000 sqm.Local portfolio 'largely stabilised'COO Leon Kok says that Redefine's local portfolio "has largely stabilised, showing signs of improvement across most operating metrics, and is, as a result, well-positioned for organic growth."The company completed 745,061 sqm of leases in the year with new deals accounting for 40% and renewals making up the balance. Kok says this is indicative of underlying confidence and activity in the sector. Another metric of importance is the tenant retention level, which has increased from 92.1% to 92.8% and speaks to "the quality of our assets and ability to retain existing tenants in a competitive environment, which is critical to unlocking cash flow."Although renewal reversion, in other words, the rate at which leases are renewed, is still in negative territory, this year's result of -6.7% is a substantial improvement on last year's (-12%). Again, this speaks to the ability to retain quality tenants in quality spaces.A commendable achievement on the office front is the reduction in vacancies from 14.4% to just below 12%. "In an environment where office prospects have been largely negative, we think this is a phenomenal achievement. It speaks to the quality of our office portfolio, which is 95% invested in A- and Premium-grade office buildings. We will continue to invest in those well-located properties to ensure we attract demand within the office sector," Kok says.Transforming challenges into opportunitySays König: “While some may ruminate on the persistent challenges around real estate and the tough macro-economic factors, we are focused on variables under our control and spotting opportunities in every challenge. That is what we call, opting for the upside.”He said Redefine faced down several market dynamics that have evolved and dissipated; not because they’ve disappeared but because “we have adapted and responded to them and strengthened our business as a result". For instance, Redefine addressed liquidity risk arising from the global liquidity crunch by broadening its funding sources through the issuance of green bonds worth R4.2 billion, which has enabled the company to extend a new source of debt funding into its funding book.The global energy crisis has resulted in cost challenges in Poland and the business has responded by significantly reducing energy consumption by 20% over two years, while the energy crisis in SA has created an investment opportunity into renewable energy.Kok explains that the investments made into solar PV capacity (36MW) in SA “will stand the business in good stead going forward”. “This makes Redefine the REIT landlord with the largest fleet of rooftop solar panels in the country, which is highly relevant in an environment where we are not only battling an energy crisis, but severe cost pressures. Solar PV makes for a stable investment that can provide an attractive financial return."Looking ahead, König says Redefine will continue to shift its emphasis to evolving market dynamics. "Navigating the effectiveness of the structural energy transition and spotting the opportunities as the interest rate cycle starts shifting will be key," he says. “When interest rates start to come down, it will mark a turning point for the investment real estate cycle."He says Redefine will continue to build and manage a simplified property platform that offers enhanced transparency with an extreme focus on holding onto each tenant. "We continue to drive strategies that assist us in understanding and responding to stakeholder needs, leading the charge in ESG and maintaining our high staff engagement rate. We aim to achieve this by staying grounded by our purpose; we're not landlords, we're people."ENDS
Cape Town, 25 October 2023 – JSE-listed diversified Real Estate Investment Trust (REIT) Redefine Properties (JSE: RDF) will continue to invest in the redevelopment of Black River Office Park, one of the greenest office precincts in South Africa, as it looks to satisfy demand for quality office space in the Western Cape. Located in Fir Street, in vibrant Observatory, ultra-modern Black River Office Park boasts a diversity of office space with a growing retail offering that will be boosted by the retail offerings in construction next to the Amazon River Club development. The office park comprises two units, namely South Park and North Park (also known as Observatory Business Park). It’s ideally located just off the N2 highway, with easy access to Cape Town International Airport as well as the CBD. The roads within the precinct are being upgraded to ensure ease of access to the Amazon development and Black River Office Park. Berkley Road will be extended to feed into the M5, a major metropolitan route that links to the N1 and N2 highways as well as Maitland and the northern suburbs. The gradual upgrade of the various properties began with the refurbishment of the North Park courtyard, which was extensively upgraded in 2022. This expansive space within the business park was transformed while retaining its historic Varschedrift homestead elements. Scott Thorburn, National office asset manager at Redefine, explains that the redevelopment of the internal heritage courtyard includes the introduction of information display boards that accentuate the historic nature of the site. The design and positioning of the courtyard seating areas highlight the foundation of the historic homestead. This, he says, has created a relaxing, serene environment that existing and future tenants can use to break away from the business of the day. The next phase of the courtyard improvements include impactful aesthetic improvements to the four perimeter common area entrance lift lobbies. The office park’s central building, renamed Central Park, is being refurbished to provide ±12 245sqm of P Grade office space over five floors. Upon completion in April 2024, the building will be an iconic landmark within the node, thanks to its modern design and breathtaking views. Given the shortage of quality office space in Cape Town and the excellent location of the property within a rejuvenated node, there is keen interest from prospective tenants to take up the space. Redefine is also refurbishing other buildings and the common area of the park to further enhance the Black River Office Park offering. Black River Office Park seamlessly blends office and retail space. Outstanding on-site facilities deliver the latest in urban living, with work and leisure elements skillfully integrated. Restaurants, coffee shops, a hair and beauty salon, yoga studio, car wash facilities as well as a Total Ninja inflatable obstacle course are all available on site and provide much-needed convenience for tenants. The 14 buildings within Black River Office Park offer a combined ±75 000sqm of office space. Eleven of these buildings have green building credentials awarded by the Green Building Council of South Africa. Additionally, the park’s 1 561kWp roof-mounted solar panel installation is one of the 30 largest installations in the world and one of the largest in Southern Africa. Three buildings have 4 Star Green Star ratings Six buildings have 4 Star Green Star ratings Two buildings have 3 Star Green Star ratings Ten buildings feature solar panel installations of 962kWp Four buildings feature solar panel installations of 599kWp The park's tenant mix is equally impressive, with blue-chip companies and multinationals finding a business home in the heart of this prosperous node. Tenants include Regus, Genesis Medical, Smollan, Flash Mobile, SKAO, SITA, AON, Beck Family Estate, Cavi Brands, Adidas, Sunglass Hut, Asics, Performance Brands, Vida e caffè, The Mill and Press Café, Yo Yoga, Total Ninja, At Stylar, and Black River Office Park Car Wash. “All tenants within this development find peace of mind in knowing that the park is equipped with a state-of-the-art security system with on-site connectivity through various fibre providers. Thanks to standby generators that are equipped at each of the buildings, business can flow freely and without disruption when loadshedding kicks in,” says Thorburn. Demand for A Grade office space has recently spiked in the Western Cape. “The Black River Office Park area is seeing heightened development activity with, for instance, the new Amazon Web Services building, situated opposite our development, currently in construction. This is set to bring upgrades to the node, including cycling and running trails, and unlock access from the north, south and CBD areas, which will, of course, benefit our tenants,” notes Thorburn. He adds, “Businesses are seeking quality spaces in excellent locations that support business continuity and offer easy and convenient access to amenities and services to complement the fast-paced lifestyles of the modern world.” This is exactly what tenants and prospective tenants can find in Black River Office Park. “With the upgrades we are currently undertaking, the space will certainly encourage further social interactions, connections and breakaways from the tenants’ working day. This, in turn, helps promote and enhance wellbeing in the workplace, which has become fundamental in the post-COVID world,” Thorburn concludes.
Johannesburg, 24 October 2023 – Redefine Properties, one of South Africa's leading real estate investment trusts (REITs), has reached yet another significant milestone in its sustainability efforts. The REIT has achieved Net Zero Carbon: Level 2 (Measured) certifications from the Green Building Council South Africa (GBCSA) for three of its Gauteng-based properties: 90 Rivonia, 2 Pybus and Rosebank Link.These three Redefine buildings are the first in South Africa to achieve a Net Zero Carbon: Level 2 certification that is based on actual measured energy consumption data.A net zero carbon building is one that operates with zero net carbon emissions over the span of a year. Such a building is highly energy efficient and uses renewable energy for its remaining energy requirements (where feasible). It only relies on carbon offsets as a last resort to balance its remaining energy use. “Green building practices are a key milestone in the journey to net zero,” says Anelisa Keke, Chief sustainability officer at Redefine. “A sound climate change resilience strategy ensures that our capital investments are safeguarded against manageable climate risk exposure and creates long-term value for our stakeholders.” Redefine achieved its Net Zero Carbon: Level 2 (Measured) ratings through a combination of energy efficiency-enhancing projects, on-site renewable energy installations (where possible), and (as a last resort) carbon offsets traded through a well-established voluntary carbon offsetting programme.It’s a significant achievement that signals Redefine’s commitment to performance-based sustainability and underscores the company's leadership in the journey towards net zero carbon.GBCSA offers two net zero carbon ratings: modelled and measured. Modelled ratings refer to predicted energy consumption over a 12-month period for buildings as per their design. On the other hand, measured ratings are operational ratings for existing buildings based on actual performance data over a predetermined period.“This is a real milestone,” explains GBCSA Head of technical, Georgina Smit. “For a landlord to move from focusing on base build energy, which is within their control, to including tenant behaviour is significant. This is a major consideration for the Level 2 rating that has been achieved.”Keke adds, “Being certified as net zero provides objective confirmation to Redefine’s key stakeholders that the performance of these buildings has been benchmarked against global best practice efficiency standards. We will apply the learnings achieved during our net zero journey to enhance energy efficiencies broadly across our portfolio, which benefit Redefine and its tenants, in line with our purpose to create and manage spaces in a way that transforms lives.”With this ground-breaking achievement and commitment to continuously pursue and maintain its net zero carbon status, Redefine sets a clear example for the rest of the property sector to follow.Keke says that international tenants and brokers prioritise Green Star rated offices, which makes Redefine’s buildings more competitive in a tough environment.Over the last decade, Redefine has played a fundamental role in leading the green building movement in South Africa. With 186 active certifications across the South African property portfolio, Redefine boasts an impressive portfolio of active Green Star rated buildings.Commenting on the importance of ESG, Keke explains, “At Redefine, we are on a drive to increase the scale and effectiveness of our ESG initiatives through discussions with tenants. This includes negotiating the inclusion of green provisions in leases as well as sharing Redefine's ESG strategies with tenants and their teams and identifying areas of collaboration on ESG initiatives.”
Johannesburg, 5 October 2023 – Redefine Properties (JSE: RDF), one of South Africa's greenest Real Estate Investment Trusts (REITs), said yesterday in its 2023 ESG investor update that the business is scaling up ESG initiatives to optimise performance and strengthen resilience in a challenging operating environment. "While there are signs of improvement, the environment in which South African REITs are operating remains challenging," notes Anelisa Keke, Chief sustainability officer at Redefine. "Our ESG strategy responds to sustainability-related risks through scalable interventions, providing an opportunity to not only de-risk our portfolio but to create and preserve value for ourselves, our tenants, and other key stakeholders." Environmental efforts target climate risk and drive cost reductions The update noted an extreme risk of baseline water stress throughout most of Redefine's South African portfolio, while EPP, its retail-centric Polish property investment platform, has several environmental transition risks, with recent and upcoming EU regulations requiring buildings to improve their energy performance levels in the next few years. Keke says that Redefine’s water reduction strategy has already resulted in significantly lower water consumption. In the next two years, Redefine is targeting a cumulative 140ML reduction of its water footprint across its SA buildings. This will be achieved through a combination of initiatives that include rainwater harvesting facilities (with five new facilities planned for Gauteng), the rollout of smart water meters, and the installation of Propelair toilets (which use up to 80% less water per flush than ordinary toilets). Meanwhile, Redefine's energy management strategy, which responds to the elevated risk of extended loadshedding and rising energy prices, is focused on reducing electricity consumption through behavioural interventions, energy efficient lighting retrofits, and renewable energy installations. Redefine has a solar photovoltaic (PV) footprint of 40.2MWp currently installed in SA, with 39.6MWp of potential rooftop solar PV installations identified across the EPP portfolio. The path to net zero Keke says Redefine’s green building journey, which goes back to 2012 when the company obtained its first Green Star SA certification, provides valuable guidance to implementing net zero building practices. "Our green building programme is part of a long-term journey towards achieving net zero and demonstrates to our stakeholders that our certified assets have a positive impact on the environment as well as on the health and wellbeing of our occupants.”Redefine currently has 186 active Green Star SA certifications across the SA portfolio, and new buildings will meet net zero standards from 2030 onwards. "Our environmental efforts are driving cost reductions," Keke explains. "We are starting to see an increase in net operating income as a result of certain on-site environmental initiatives, which count positively towards valuations." Through upcoming initiatives such as the green lease rollout, these will become revenue drivers in due course. Keke adds, “We have evidence of international tenants and brokers prioritising Green Star rated offices, which makes our buildings more competitive in a tough environment.” An evolution from CSI to making community impact When it comes to CSI, Keke explains, "Our approach to CSI has evolved into an impact-driven socioeconomic development (SED) strategy that forms part of the company-wide impact framework. This strategy ensures that the design and operation of our assets respond to community needs and that our business activities transform lives." Redefine's 2030 vision is to ensure that socioeconomic development initiatives are in place for communities in over 50% of its buildings and achieve cumulative targets of 1 000 000 people impacted directly and 1 000 additional jobs created. The new approach will ensure sustainable, quantifiable impacts (with short- and long-term targets) that positively impact stakeholders, the property sector, and the communities in which Redefine operates. Keke states that Redefine's focus on impact creation allows the company to mitigate key socioeconomic risks. "Socioeconomic development initiatives that are impact focused help us manage the risks of socioeconomic instability caused by unacceptable levels of unemployment, poverty and inequality. Initiatives such as the Maponya Mall Community Hub focus on youth skills development to prepare a pipeline of new entrants to the job market, which helps reduce unemployment." Sustainable finance, stakeholder buy-in critical to achieving ESG strategy Redefine said that employee buy-in has allowed the company to scale up critical ESG initiatives. All Redefine employees will be trained on green building certifications in SA in 2023/24. This upskilling allows the company to offer a compelling service to tenants who want to expand their ESG initiatives.Keke said that tenant buy-in and cooperation are essential for the company to achieve its energy, water and waste reduction goals. As such, Redefine has engaged several of the national retailers, who occupy a combined gross lettable area of 574 613sqm, on the ESG strategy and opportunities to collaborate on environmental and social initiatives. Similarly, the ability to finance the low-carbon transition of its assets is critical to enabling Redefine's ESG strategy. Its sustainable finance facilities provide the company with an avenue to leverage its ESG performance to access sustainable finance markets. Recently, Redefine issued a green bond that was oversubscribed 1.9 times, with R1.9 billion received in bids, resulting in an upsized allocation to R1 billion across three, five and seven years. The proceeds raised will be used to refinance eligible green assets (across its property portfolio) that align with the group's overarching, long-term climate-resilient framework.Redefine continues to participate in the S&P Global Corporate Sustainability Assessment and GRESB indices. It is taking steps to incorporate the IFRS S1 and S2 Standards, and the JSE Sustainability Disclosure Guidelines into its sustainability reporting.
Johannesburg, 29 August 2023 – Real Estate Investment Trust (REIT) Redefine Properties (JSE:RDF) said today in its pre-close update for the year ending 31 August 2023 that the business has been stabilised, with the company's South African and Polish portfolios demonstrating “remarkable operational resilience” across all sectors in the face of the challenging operating environment. While market-shifting dynamics (such as the aftershocks of the pandemic, elevated inflation, an energy crisis and higher funding costs) remain on the company's radar, the update noted that there is cause for optimism that the property cycle has bottomed and that 2024 will mark a notable turning point for the sector. Real estate fundamentals are building positive momentum Notably, the upward trajectory of inflation is tapering, with early signs of cooling off, which brings with it more predictable interest rate expectations. Meanwhile, the government and business's plan to remove obstacles to inclusive economic growth and job creation through priority interventions is expected to restore much-needed confidence. “We are encouraged by the fact that real estate fundamentals are beginning to build positive momentum that is expected to translate to future upside potential,” says Redefine CEO Andrew König. “This has provided us with a renewed sense of optimism. However, we know that risks such as geopolitical tensions, elevated inflation, high interest rates, rising energy prices and ongoing loadshedding require an unwavering commitment to fostering strategic resilience, as we look to pursue growth and deliver sustainable value.” As such, Redefine is ensuring that it Invests strategically in efficiency interventions to reduce reliance on municipal-supplied utilities Optimises capital by diversifying funding sources to spread concentration risk Improves operational efficiencies through disciplined cost management and by digitising processes to transform the tenant experience Signs of stability Despite loadshedding and related cost headwinds, Redefine reports that operating metrics across its South African portfolio are gradually improving and showing signs of stability. Demand for P and A Grade office space in sought-after locations has strengthened, while the group's industrial portfolio continues to be defensive and is performing well in a competitive landscape. Considering the prevailing uncertainty around the energy outlook and associated risks to operational performance, Redefine remains focused on improving its energy efficiency and bolstering business resilience by investing in renewable energy in South Africa. For instance, the group is participating in the City of Cape Town's first electricity wheeling pilot project that enables commercial entities to sell electricity back to the city's grid. Redefine is undertaking a 5.9MWp solar wheeling project on the roof of its Massmart Distribution Centre at its Brackengate 2 development. Tapping growth opportunities As an example of its efforts to realise growth and the upside for shareholders despite market uncertainty, Redefine is unlocking opportunities in the retail, logistics and self-storage market segments in Poland. “We remain confident about the potential in the Polish market,” explains König. “Our exposure to Polish retail and logistics provides stability, and recovery of the shopping centre performance in that market is well on track, with positive retail sales forecast for the next two years.” The update noted that rental rates continue to rise in the logistics market segment, particularly in sought-after locations and buildings with modern technologies and ESG solutions. “The self-storage market in Poland represents an emerging asset class with untapped potential,” says König. “Poland has significantly fewer self-storage facilities than other European markets, and demand is underpinned by robust micro business needs, representing 48% of overall users, which is above the EU average of 29%.” The group reported strong working capital generation, with reason to expect improvements in the near term based on projected collections, which supports a healthy and stable liquidity profile. The company’s SA REIT loan-to-value (LTV) at the end of May 2023 increased to 42.3% (HY23: 40.9%) on the back of a weaker rand. Redefine expects the LTV to moderate towards its internally set medium-term target of 38% to 41% during 2024. DIPS is expected to be in line with guidance of between 48 cents and 52 cents for the year ended 31 August 2023. The company's closed period commences on Friday, 1 September 2023 until its annual results are released on Monday, 6 November 2023.
Johannesburg, 29 August 2023 – Redefine Properties, a leading South African Real Estate Investment Trust (REIT), has issued another green bond as it leverages off its sustainability journey.Redefine will use the money raised to refinance eligible green assets (across its property portfolio) that align with the group's overarching, long-term climate-resilient framework. The assets include highly rated green buildings that incorporate a variety of initiatives aimed at improving their energy and water efficiency.Redefine's third green bond was oversubscribed 1.9 times with R1.9 billion received in bids at an auction on 21 August and resulted in an upsized allocation to ZAR1.0 billion across three, five and seven years.“Demand for the bond issuance was particularly high in the seven-year tenor, resulting in the allocation of ZAR425 million to that tranche, which bodes well for our long-term funding structure,” says Ntobeko Nyawo, Chief financial officer of Redefine. “South Africa's debt capital market is experiencing a recovery in demand for high-quality commercial instruments with an environmental, social and governance (ESG) underpin.”This green bond will further support the long-term decarbonisation of Redefine’s buildings, which is focused primarily on the reduction of energy consumption through efficiency interventions, mutual collaboration with tenants, and solar photovoltaic (PV) expansion.“This latest green bond issue further improves our funding match between our assets and liabilities in our capital structure and reaffirms our commitment to placing ESG at the heart of what we do,” Nyawo says. “We believe that this will continue to play a critical role in strengthening and solidifying our balance sheet.”The capital raised will be deployed in the refinancing of qualifying buildings that have achieved a 4 Star Green Star (or higher) rating from the Green Building Council South Africa (GBCSA), which is a tool used to rate the environmental impact and sustainability-related performance of buildings.The green bond aligns with Redefine's sustainability goal to further transform its properties into environmentally sustainable and resource-efficient assets.The green bond also aligns with the International Capital Market Association Green Bond Principles. It was listed on the JSE in the Sustainability Segment – a platform for companies to raise debt for green, social and sustainable initiatives.Nyawo adds that Redefine will continue its strategic participation in South Africa’s deep and liquid debt capital market, as it provides the opportunity to raise competitive funding that will enable the group to achieve its mission as it aims to deliver the smartest and most sustainable spaces the world has ever known.
Johannesburg, 8 May 2023 – Redefine Properties (JSE: RDF) continues to harness a well-diversified asset base and healthy balance sheet to deliver sustainable value. With a diversified property asset platform now valued at R94.1 billion – up from R88.9 billion in 2022 – and with the offshore component in Poland now at R34.7 billion, Redefine has lifted distributable income for the six months to 28 February 2023 by 7.2% to R1.6 billion.CEO Andrew König says the consolidation of EPP – the largest asset manager of retail real estate located in Poland in terms of gross leasable area – contributed R272 million to distributable income, as that business has been stabilised and has resumed paying dividends.“We are pleased with the way the integration of EPP into the Redefine family has taken place and remain confident about the potential in the Polish market. For instance, vacancies in the EPP stable remain less than 3%, indicating healthy demand despite the ongoing negative news coming out of Europe,” says König. A corporate reorganisation of EPP in March 2022 saw Redefine take a 95.5% shareholding in line with its strategy to increase exposure to the Polish retail sector.Other highlights in the period include a restructuring of the ownership of Redefine’s 11 remaining government-tenanted office properties, strong inflows from green bond issuances, and continued expansion in the growing logistics market in Poland.Notably, Redefine has begun building a scalable platform in the under-developed self-storage sector in Poland.“The initial acquisition of 51% of Stokado has been concluded, which we expect to implement by the end of May. An attractive development pipeline is under consideration, which will effectively increase our equity holding to 75% in three to five years,” says König.CFO Ntobeko Nyawo says a very healthy cash position has supported a pay-out ratio of 85%, which equates to an interim dividend of 20.32 cents per share.“Good organic growth in our active portfolio, consistent cash collections, diversified funding, maintaining our loan-to-value ratio within our medium-term range of 38% to 41%, and the hedge against the weak Rand provided by our offshore exposure have all combined to help us navigate the current volatile external conditions,” Nyawo notes.Redefine is reaping rewards from its leading position in the ESG space, where it was the first REIT in South Africa to be awarded a net zero carbon level 2 certification for three properties. Apart from the benefit to the environment and support to tenants, Redefine’s green investment strategy has seen R3.2 billion coming on stream through use-of-proceeds green bond issuances, which were supported by large institutional investors and the IFC.Nyawo says Redefine now has R6 billion in committed undrawn facilities and cash on hand, while another positive in the interim period was an improvement in net asset value to 750.8 cents a share, or 4.3% growth.COO Leon Kok says while loadshedding, inflation, rate rises, poor public infrastructure and crime pose persistent challenges, Redefine’s solid operational performance is thanks to a focus on quality and creating a defensive foundation. The tenant retention rate by gross monthly rental was reported at a healthy 96.6% from 95.2% before, and a further 160 076sqm was let across the portfolio.“Our office portfolio, for instance, is seeing very good activity and vacancies are stabilising at lower levels. This speaks to the work we started many years ago. Through active asset management, 87% of our portfolio now comprises A Grade and Premium Grade buildings, and tenants are spoilt for choice across prime nodes at attractive rentals,” says Kok.A solar PV rollout of 13MW this year adds to the attraction factor. “Having reliable alternative energy sources will continue to attract tenants and mitigate some of the negatives, like the high cost of diesel. This is why we are motivated and believe there are clear signs of green shoots. For instance, some high-demand areas like Rosebank and Sandton are in a position where rentals could start increasing,” says Kok.He adds that the timely restructuring of Redefine’s broader property portfolio has ensured that its asset base is poised to benefit from the return of shoppers to malls, workers to the office, and an uptick in industrial activity.“The doomsday scenarios predicted by many people at the height of COVID certainly has not materialised, though we need to remain astute and vigilant in the face of persistent challenges,” says Kok.“We have done the hard work to get the basics right and focused on the variables under our control, while delivering on our purpose. We are poised for organic growth in the eventual upward market cycle,” he concludes.
Redefine Properties (Redefine) (JSE: RDF) and Griffin Capital Partners (Griffin), a leading private equity investment company, have set up a venture to acquire Stokado, Poland's second largest self-storage operator, to establish a platform to fast track investment through development activity in this growing sector. Stokado has established itself as one of the leaders in the self-storage industry in Poland, storing goods belonging to private and B2B customers in around 3 000 units at its dedicated self-storage facilities located in Wrocław, Poznań, Bydgoszcz, Szczecin, Kalisz, Legnica, Zabrze and Zielona Góra. Redefine and Griffin have a successful history of working together in Poland on other projects and the newly formed venture plans to further expand Stokado’s operations by developing a countrywide network of modern, purpose-built, self-storage facilities. Griffin will act as co-owner and asset manager of the platform, while the founders of Stokado will remain involved as minority shareholders and the management team of the company.Andrew König, CEO of Redefine, sees plenty of upside in the self-storage space, as Poland’s economy continues to show exciting growth potential. König stated, “This deal leverages the strengths of all parties and opens the door to expansion, diversity and growth in line with Redefine’s focus on strategically allocating capital into areas with upside at low risk. The lack of institutional grade storage space in the expanding Polish market makes this a particularly attractive proposition. We are convinced that this sector in Poland has many years of stable growth ahead of it.”Maciej Dyjas, Managing Partner of Griffin, stated, “We are actively diversifying Griffin’s portfolio with projects not only in commercial and residential real estate but also in renewable energy and now in a new industry for Poland – self-storage. Our strategy is to seek investment opportunities and growth potential in any sector that we find attractive. The self-storage market is performing strongly, and we see that investors' interest continues to grow. We are pleased to continue our partnership with Redefine while developing a new market in Poland.”Nebil Senman, Managing Partner of Griffin, added, “We are known in the market for introducing completely new and unconventional solutions to Poland. The same goes for the self-storage market, which is nascent in Poland. Poland has less than 4 000sqm of self-storage space per million residents, compared to roughly 8 500sqm in Germany and c.22 000sqm in France or Spain. We believe the sector offers vast growth opportunities.”Storage space has grown by 4.8% in Europe over the past 12 months. The Polish self-storage market is still in its infancy, with penetration 2.5 times lower than in Germany and 6.7 times lower than the European average. It is expected to grow at a compound annual growth rate (CAGR) of over 8% over the next three years. Griffin and Redefine's investment in Stokado will enable the further development of self-storage facilities in the most promising locations in Poland.Dawid Bechcicki, co-founder of Stokado, explained, “We are welcoming new investors in Stokado with a goal to develop 50 new self-storage buildings over the next five years, focusing on major cities throughout Poland and becoming the Polish market's largest operator.”Klaudiusz Bechcicki, co-founder of Stokado, added, “We believe that partnering with Griffin and Redefine, international and prominent players in the market, will bring unparalleled real estate market experience to Stokado and allow us to continue to grow.”The joint venture partners were advised by Osborne Clarke, MDDP and Olesiński i Wspólnicy. *** About Griffin Capital PartnersGriffin Capital Partners is the largest privately owned investment and asset manager in private equity and real estate in CEE and the region’s most active and innovative investor. It is a recognised private equity and real estate leader, originating and introducing innovative concepts and formats to the market. The strategy is to start platform companies from scratch or acquire and develop them to become best-in-class market leaders. This is achieved by implementing appropriate strategies and strong management teams to build their value through organic growth – transforming them into leaders in their markets. Griffin invests on behalf of both its owners and its renowned international investors. The gross asset value of Griffin-managed investments across 16 actively managed and three sourced and passively held platforms exceeds €8 billion, with a total invested equity of over €3.5 billion.About Redefine PropertiesRedefine is a South African-based Real Estate Investment Trust whose property portfolio is predominately anchored in South Africa through directly held and managed retail, office and industrial properties, which is complemented by a strong presence in retail and logistics property assets in Poland. Our primary goal is to grow and improve cash flow to deliver quality earnings, which will underpin growth and sustained value creation for all stakeholders.For further information:Beata PatuszyńskaMarketing and PR managerEmail: [email protected]: +48 539 396 854
Johannesburg, 16 March 2023 – Redefine Properties (JSE: RDF) continues to build resilience against climate risks across its portfolio of buildings, with three properties in Gauteng recently receiving Net Zero Carbon Level 2: Building & Occupant Emissions (Measured) certifications from the Green Building Council of South Africa (GBCSA). The GBCSA sets very high standards and is seen as a leading accreditation in the property sector.The properties – 2 Pybus Road (Sandton), Rosebank Link (Rosebank), and 90 Rivonia (Sandton) – were recognised for improved energy efficiencies equal to or above industry averages. This is a major accolade and makes Redefine the first SA REIT to achieve this target at an operational level. It was achieved through a combination of energy efficiency enhancing projects and limited carbon offsets traded through a well-established voluntary carbon offsetting programme.“Being certified as net zero provides an objective confirmation to our key stakeholders that our certified buildings have been benchmarked against global best practice efficiency standards,” says Anelisa Keke, Chief sustainability officer at Redefine.“These certifications are a display of our commitment to our net zero journey and are based on ongoing operational performance,” she says.Going forward, the buildings will need to be recertified every three years.Redefine has been working hard to entrench a broad climate resilience framework into its business model, while introducing more sustainability interventions across its operating environment.“A sound climate change resilience strategy ensures that our capital investments are safeguarded against manageable climate risk exposure and creates long-term value for our key stakeholders. Green building practices form part of this strategy, as they are a key milestone in the journey to net zero,” says Keke.Redefine’s environmental, social and governance (ESG) strategic framework sets long-term goals for incorporating ESG into the company’s investment processes, day-to-day operations, and stakeholder relationships.“We will take the successes achieved from these three buildings to enhance energy efficiencies across our portfolio, which benefits Redefine and its tenants in line with our purpose to create and manage spaces in a way that changes lives,” concludes Keke.
Maponya Mall Community Hub will drive skills development for youth and exciting opportunities for entrepreneurs and small businessesJohannesburg, 8 March 2023 – The Maponya Mall Community Hub officially opens its doors this month, featuring a new state-of-the-art facility and access to capacity-building initiatives, skills programmes, information and partnerships to ensure economic and social inclusion for the Soweto community.The launch of the Community Hub, which forms part of an ongoing asset-based community development programme by Redefine Properties and our partners that include the Dr Richard Maponya Institute, FNB Philanthropy and Afrika Tikkun Foundation, comes after COVID-19 halted the work that had started in 2019.Chief sustainability officer at Redefine Properties, Anelisa Keke, says the renewed and reinvigorated programmes will harness modern, cutting-edge tools to improve and positively impact on non-profit organisations (NPOs), small and medium-sized enterprises (SMMEs) and the youth operating within Soweto at a time when this type of support is desperately needed.“The youth development programmes are aimed at ensuring the youth have sufficient resources to lead productive and fulfilling lives, while NPO development will ensure that NPOs and community-based organisations (CBOs) have the skills and ability to provide much-needed services in the community. SMME/entrepreneur development will take place through incubation, acceleration and supply chain development programmes to ensure that entrepreneurs have the support and skills to develop their businesses further themselves,” says Keke.“With South Africa facing unprecedented challenges of stagnating growth, inflation and joblessness – even as the recovery from COVID-19 begins – our new state-of-the-art facility and related programmes offer avenues for renewal and hope,” she adds.The implementation of a youth development programme in partnership with Afrika Tikkun will create a space for out-of-school youth to develop personal and technical skills.“The Youth Accelerator Programme (YAP) is a four-month programme focusing on guiding youth to develop a keen sense of self, community, goals and skills. The overall purpose of the programme is to assist youth with a holistic development programme that facilitates growth and maturity in personal decision-making and provides an individual with the tools to implement their decisions going forward,” says Keke.Two additional youth skills development programmes will focus on the retail sector (Retail Academy) and information and communications technology (ICT) sector (ICT and software development) to ensure candidates have the specific skills needed to enter the employment market in those industries.“With immense hurdles of joblessness to overcome in South Africa, these programmes are aimed at increasing the employability of our young generation and ensuring they can gain access to the full benefits of the modern digital workplace,” she adds.With SMMEs at the heart of the South African economy and critical to its recovery, SMME engagement is aimed at empowering the residents of Soweto to start and grow their own businesses.Support programmes will help SMMEs prepare their products for market, and participants will attend masterclasses and coaching sessions to assist them with compliance and branding. The aim is to assist Sowetan SMMEs to sell their products in retail stores.Meanwhile, the Community Hub will host quarterly online training programmes for NPOs, focusing on local fundraising and mobilising support. The main objective of the training is to support NPOs to: Acquire basic knowledge on effective fundraising and advocacy Identify current resource gaps and understand different donors/partners and their motives for giving Link branding communication to local resource mobilisation Access the Change the Game Academy online platform and utilise the modules for further learning"Despite the challenges presented by COVID-19 and loadshedding, Redefine has persevered and ensured we live up to our purpose of creating and managing spaces in a way that changes lives. The launch of the Maponya Mall Community Hub is a key part of our reset, which we hope will bring hope and opportunity," concludes Keke.Follow the Community Hub online:www.maponyamall.co.za | https://facebook.com/maponyamallsoweto
Johannesburg, 23 February 2023 – Real estate investment trust Redefine Properties (JSE: RDF) said today in its pre-close update for the half year ending 28 February 2023, that it is responding strategically to evolving, market-shifting dynamics in a decade of “disruption and action”.Primary among these are the rising cost of doing business, the energy crisis, and elevated interest rates, with these converging realities adding up to a “polycrisis” (a cluster of related global risks).“We need to pivot to focus on what matters most and realise that polycrises can create opportunities. We need to remain innovative, agile and resilient while placing our purpose and our stakeholders’ needs at the heart of what we do. While we are cautiously optimistic for the future, we must be realists of what we need to deal with,” says Redefine CEO Andrew König.Redefine is ensuring that it invests strategically, optimises capital, operates efficiently and reviews strategies to attract, retain and develop key talent to provide an internal pipeline of scarce skills.As an example of the pivot to take advantage of opportunities despite the uncertain world, Redefine is diversifying its real estate interests in Poland by entering the self-storage market.Shareholders were informed that Redefine and Griffin Capital Partners will create a 93%/7% self-storage venture, with Griffin rendering on-the-ground services to the venture.“The Polish self-storage market is in its infancy with penetration 2.5x smaller than Germany and 6.7x smaller than Europe’s average. It is expected to grow at a CAGR of over 8% over the next three years,” says König.Although the risks to the global outlook remain skewed to the downside due to the ongoing tightening of monetary policy and continuing disruptions caused by Russia’s war in Ukraine, König says it is anticipated that the world will likely avoid a recession. He says that in Poland, for instance, the unseasonably warm winter has dampened the expected skyrocketing of gas and energy prices, and so a recession there is unlikely.Liquidity risk management remains key, and EPP N.V. (recently acquired by Redefine in Poland) has largely dealt with its debt refinancing challenges and will deliver sustainable income going forward by resuming dividend payments.The other positive strategic responses Redefine is driving include the reduction in consumption of energy through efficiency interventions, collaboration with key stakeholders, and a major solar photovoltaic (PV) expansion.“We are protecting operating margins through operating efficiencies across the entire business. We are also looking at how we minimise energy usage and are working collaboratively with stakeholders to become more efficient and less reliant on unreliable sources provided by Eskom,” says König.However, in South Africa, the country's deepening electricity crisis, sharply higher domestic interest rates and slower global demand will likely hurt domestic exports, consumer spending, confidence levels and fixed investment in 2023.With the 2023 national budget released on Wednesday, König called for tax relief on diesel consumed during back-up power generation.“Why pay roughly a quarter of the diesel bill to the state when these go to the general coffers and road accident fund? This is not going back to support those assuming the role of the state during the energy crisis. As landlords and tenants who bear a large portion of this cost, we are providing a necessary service, being electricity, and then paying government a tax through the cost of diesel. That is not equitable and these taxes should not be levied on us the way they are,” he says.Diesel costs averaged R38 000 per hour across Redefine’s South African portfolio in December 2022, with a 69% recovery rate.Tenant retention in South Africa, however, remained very strong in the Redefine portfolio.“Our focus remains on managing what we can control and so we are, among others, building supply chain resilience, accelerating our ESG strategy, improving our cybersecurity posture, and reviewing strategies for attracting and retaining key talent,” concludes König.Redefine’s closed period commences on 1 March until the interim results are released on Monday, 8 May 2023.
Johannesburg, 24 January 2022 – In a strong indication that South Africa’s post-COVID-19 recovery is on track, JSE-listed REIT Redefine Properties says retailers are starting to sign longer leases in lockstep with increased footfall at its properties.Sales and total turnover across the retail portfolio are already in excess of pre-COVID-19 levels, and Redefine forecasts that this growth will continue, driven by essential services, apparel, and the recovery of entertainment in shopping centres.“The negative lease renewal reversions have already started improving and the continued growth of retail sales will see this trend continuing in 2023. Total foot count is now at 94% of pre-COVID levels, with a 2% growth on the prior year. This is an improvement from the average of 80% seen throughout the year when compared to pre-COVID levels,” says Nashil Chotoki, Redefine’s National retail asset manager.However, this does not mean the economy is out of the woods yet, as rising interest rates and inflation in the cost of food, fuel and electricity will suppress consumers’ disposable income.“Consumer loyalty to shopping centre and brands will be more strongly driven by environmental and community support initiatives. I expect consumer support to grow for locally manufactured brands such as Bathu and Drip, and locally manufactured will influence spending behaviour,” says Chotoki.“Most Gauteng residents travelled out of Gauteng for their holidays, and therefore the large format centres in Cape Town had better total footfall and footfall growth than those in Gauteng, while KwaZulu-Natal was muted on the back of the current water quality challenges in the province,” says Chotoki.Uneven recovery across regions“To me, these trends indicate that foot count will, on the whole, remain below pre-COVID-19 levels for the short term, as some stores are still struggling to fully recover and the recovery is not equal across regions or business types, but the foot count recovery of large format centres will continue due to the appeal of one-stop-shop solutions,” Chotoki notes.Sit-down restaurants were the most impacted on by COVID-19, but Redefine has recorded a recovery of this category to pre-COVID levels. However, Chotoki warns that the increased operating cost for owners has impacted on profitability for this category.Among other interesting trends, cinemas showed positive growth, driven mainly by specific popular content releases from Hollywood, and this may start to change the trend back towards cinemas driven by value-focused entertainment. Sales growth in workwear/formal wear is expected to continue as more workers return to the office.Loadshedding and the costs associated with backup power continue to dampen the outlook.“This will continue to impact on margins for property owners and retailers, who will not be able to pass this on to constrained consumers,” says Chotoki.Other key trends to watch include mergers and acquisitions by listed retailers, while diversity in products into new retail concepts and brands, such as Checkers Outdoor, Checkers fashion, TFG Outlet, Mr Price Baby, is set to continue.While online sales will continue to be part of the retail landscape, especially for staples and electronic products, Chotoki says it will be interesting to see how consumers adapt when Amazon brands join the fray.Focus on ValueIn this environment, Redefine will continue to work closely with independent retailers to develop their brands. “Our Smarten program has already achieved good results, with Kyalami Corner in the last financial year achieving a trading density increase of 30.5%. Another 150 tenants have been identified to participate in the programme for the 2023 financial year.“Redefine has increased exposure to value and essential services retailers by 21,720m2 and now occupy 20% of retail GLA with the plan to further increase this to 25% in the short term.”Redefine is also looking at initiatives to reduce diesel consumption during load shedding and reduce the cost impact this has on retailers, in line with broad energy-saving initiatives across the retail portfolio. Managing Risks as War in Ukraine Rages OnAgata Sekula, Board Member responsible for investment and asset management at Polish retailer EPP (acquired by Redefine in February last year), says EPP ended 2022 with tenant turnover in most categories above 2019 and footfall approaching pre-pandemic levels.However, the pandemic affected all landlords and the war in Ukraine then further shook economies again. A noticeable trend was rising demand for value retailers and retail parks.“We addressed this trend with opening a retail park in Galeria Twierdza in Zamosc in November, and we already see a positive footfall growth. A number of value retailers have also been introduced to many of our shopping centres,” says Sekula.The increase in the maintenance costs of shopping centres due to rising energy prices, wages and inflation, however, remain the key challenge.“To address it and save energy, we have already implemented changes in our BMS systems optimising equipment’s operations. We installed LED lighting and invested in photovoltaic panels. We also educate and promote the idea of a responsible use of resources among our employees and tenants,” says Sekula. In another innovation, EPP went for energy-efficient Xmas decorations.These and other efforts have already resulted in a saving in electricity consumption in the common areas at EPP managed retail properties of around 15% on average compared to 2019.Along with ESG, another leading trend in the sector’s development in 2023 will be in the omnichannel space – combining online and offline for a better performance to give customers an opportunity to buy where, how and when they want.
Agricultural skills development project to deliver positive impact on sustainable economic empowerment and food security in local communities Cape Town, 23 November 2022 – In a groundbreaking launch today, Redefine Properties unveiled the first retail urban rooftop farm to be established in the Western Cape – right on top of Kenilworth Centre, a popular regional shopping mall in the heart of the southern suburbs.Rooftop farming is a relatively new concept in South Africa, and the HandPicked CityFarm at Kenilworth Centre, which is being developed in partnership with the Mr Price Foundation’s HandPicked programme and other key partners, aims to create community-based informal economic opportunities for unemployed youth and promote local food security.The launch was attended by Cape Town Executive Mayor Geordin Hill-Lewis and other key delegates from government as well as partners and the community.The project is structured so that Redefine Properties will donate use of the space to the HandPicked programme, with income generated by the farm used to fund the project. Other key partners include Fresh Life Produce and SA Urban Food & Farming Trust/Oranjezicht City Farm.“Our aim is to create a meaningful and sustainable long-term solution to tackle youth unemployment and, in turn, food security in our immediate community/catchment area. We believe this project will set an example for how landlords can change the way retail properties are managed and developed so that lives, communities and the environment are impacted positively,” says Anelisa Keke, Chief sustainability officer at Redefine.Over the last 45 years, Kenilworth Centre has been developed and grown into one of Cape Town's most iconic community shopping malls.“Our purpose is to create and manage spaces in a way that changes lives. This rooftop farm is a great example of those values in action and will, among other benefits, create employment opportunities through the daily operation of the project, ensuring the effective management of the produce and space,” says Leon Kok, Redefine’s Chief operating officer.The project will include a skills development programme that educates youth on how to develop an agricultural business in an urban environment, through a partnership with the Mr Price Foundation’s HandPicked programme, its training partner SA Urban Food & Farming Trust/Oranjezicht City Farm, and the Black City Farm Project based in Langa.Project beneficiaries will be sourced from the Langa community. Two unemployed young people from Langa will be upskilled each month, totalling 24 young people over a 12-month period. Thereafter, they will be provided with the resources to set up and run their own productive entrepreneurial urban farms in their backyards.iChilli le Langa will utilise the offtake of certain crops, such as chillies, in the production of its sauce range, creating an opportunity for the home growers to generate revenue and move from consumers to producers.The project also plans to donate fresh produce to two/three local NGOs each month or a minimum of 10 per year.Mall restaurants will be able to purchase fresh vegetables directly from the farm, saving the considerable expense of transport fees. A kiosk or pop-store (as available) in the mall will be allocated to sell produce to customers in order to generate additional income for the farm.The HandPicked CityFarm will utilise a South African-developed system called the African Grower. This robust, easy-to-use, modular vertical garden comprises multiple growing pods stacked on top of one another. These towers are suspended, making it pest resilient, and coconut coir is used as a water-efficient growing medium. The system promotes increased production, as each African Grower tower, which houses 16 to 24 plants, occupies the same footprint as a person standing. This gives the project the advantage of increased production in a small space using vertical growing practices.“At Redefine, we are entrenching ESG into everything we do through an integrated approach to making strategic choices that will sustain value creation for all stakeholders. We are extremely proud to launch the HandPicked CityFarm at Kenilworth Centre as an example of this approach in action, where the Kenilworth Centre value proposition not only benefits the environment through other on-site initiatives but also people and communities,” concludes Keke.
Johannesburg, 7 November 2022 – Real estate investment trust Redefine Properties (JSE:RDF) continues to weather tough economic conditions to deliver sustained value and quality earnings thanks to continuous risk management, disciplined sale of non-core assets and the onboarding of overseas retail property powerhouse EPP.Distributable income of R3.6 billion, representing distributable income of 53.71 cents per share for the year ended 31 August 2022, is indicative of an underlying healthy and sustainable property asset base despite ongoing uncertainty over the war in Ukraine, local policy instability and weak overall property fundamentals. The Group now has a geographically diverse asset portfolio worth R88.9 billion. A final dividend of 19.28 cents was declared, bringing the full year dividend to 42.97 cents per share. Earnings guidance for the 2023 financial year remains for distributable income of between 54.2 and 56.4 per cents per share.Redefine CFO, Ntobeko Nyawo, says a standout feature is the sustainability of earnings off the back of a “very stable and strong balance sheet with a loan-to-value ratio of 40.2% in supporting our strategy and recovery post the COVID-19 pandemic”.“This speaks to the underlying health and sustainability of the portfolio,” he says, noting that liquidity of R6.2 billion – of which R1.7 billion is cash on hand and R4.5bn access to committed undrawn facilities – trumps the R5.8 billion recorded a year ago. A boost to liquidity resources came in the form of timeous disposals of non-core assets, injecting R9.4 billion in cash.Net asset value, in turn, moves up to 720.1 cents per share from 688.6 cents per share last year, thanks largely to the inclusion of the robust offshore portfolio and SA asset values stabilising. While the cost of rand-denominated debt increased to 8.7% from 8.1% in prior year, Group weighted cost of debt remains stable at about 6% and the company is well-hedged at 82.9% of total debt.CEO Andrew König, says while Redefine has had to rethink its business in a rising inflation and interest rate environment, the results “demonstrate the outcomes of our purpose of creating and managing spaces in a way that changes lives.”A recent JLL socio-economic impact study, for instance, demonstrates that Redefine across the South African portfolio ecosystem generated new SMME sales of R8.3 billion, created 12,850 jobs – showcasing that retail is the biggest job creator across all sectors at 55% of the jobs created– and helped create 8,353 new SMME jobs specifically. Standing out was a statistic showcasing a total GDP contribution of R3.7 billion thanks to the activity generated across the portfolio by Redefine during 2022.“We are having an impact in the communities we operate in and will continue to drive broad progress as we integrate ESG initiatives into everything we do so the impact we have is sustainable and value enhancing for more people,” says König.“We have worked hard to create a quality portfolio that is not heavily exposed to secondary grade properties, especially in the office sector where vacancy rates in that sector are scaling 30% for some companies,” he says.With EPP on board, some risks on the horizon include a dark winter in Europe amid higher costs and potential shortages of energy.However, König says it is important to focus on the “variables we can control.”“Geopolitics affect all of us and this is playing out in a sharp increase in energy costs and rising inflation. But then on the flipside, you see logistics benefiting from a move to ‘friend shoring’ where companies move into friendlier territories where they can do business safely, like Poland where ELI is situated, fuelling growth in demand for logistics,” he says.COO Leon Kok says Redefine’s local portfolio has had a “very decent outcome across all operating metrics,” despite the ongoing power cuts, policy uncertainty and economic malaise.“We have been exposed to climate, water, energy and COVID challenges for a few years now and through hard lessons learnt been embedding best practices across the board,” he says.The right strategic choices saw many “green ticks” for Redefine, with vacancies reducing during the reporting period to 6.7% from 7.1% a year ago, while lease tenures increased, as did tenant retention. “Our local property valuations have also stabilised with a 1.4% valuation increase across all three sectors on the back of a continued recovery in operating metrics,” he adds.Kok says Redefine continues to benefit from a flight to quality, as tenants seek quality A- and P-grade space, to complement their employee wellness efforts in environmentally friendly buildings or where users seek to consolidate multiple offices into a single location.“Our capital allocation has emphasised retention and improvement and we have been very active on the refurbishment front, while continuing to expand our solar PV footprint, at an installed 35 MWP at year-end,” he says. Exciting innovations include a successful bid for a “electricity wheeling project” in partnership with the City of Cape Town via the planned installation of a 5 MWP solar rooftop project at Brackengate, which will be the single biggest rooftop solar PV installation in Africa.“This will see us generate electricity off the rooftop of our warehouse and which will supply two of our retail sites in the Western Cape, which could hopefully pave the way for national regulation and growth of this powerful alternative energy innovation,” says Kok.Redefine’s overall ESG journey continues to gather momentum, with 160 Green Star certifications and 85% of the South African office portfolio by GLA being green certified. In Poland, EPP has 70% and 85% of its retail and office portfolios respectively BREEAM certified.“We have not just woken up to the need for green solutions but this has been part of our thinking for many years and we are now seeing solid, value-enhancing results,” says König.On top of maintaining a high over-arching ethics rating, König says he is particularly pleased with progress on driving gender diversity across the company.“Our diversification across the sectors remains a key benefit, while our quality of earnings is getting more sustainable, enhancing our ability to build and grow,” concludes König.
Johannesburg, 4 November 2022 – Redefine has appointed investment expert Cora Fernandez as an independent non-executive director and member of the remuneration committee and social, ethics and transformation committee, effective today.“Redefine is committed to broadening and deepening the skill set and enhancing the diversity of our board, ensuring we remain in lockstep with new and diverse thought leadership so that we can deliver on our vision in an increasingly complex world. We welcome Cora with her vast experience having served on various boards and in investment management. We look forward to the fresh insights and perspectives she will no doubt bring,” says Redefine chairperson, Sipho M Pityana.Cora, BCom, BCompt (Hons) CA(SA), was chief executive of Sanlam Investment Holdings Institutional Business from 2014 to 2015 and managing director of Sanlam Investment Management (SIM) from 2012 to 2013. She also served as a member of the Sanlam Investments executive committee and on the board of directors of Sanlam Investment Holdings Proprietary Limited and various other subsidiaries within the Sanlam Group.She currently serves on the boards of Capitec Bank Limited, Spur Corporation Limited and Tiger Brands Limited. Cora is also an independent trustee on the Allan Gray Retirement Funds and member of the National Empowerment Fund investment committee and the 27Four Black Business Growth Fund investment committee.During her tenure, Cora was instrumental in expanding Sanlam Investment Holding’s presence and market share in the institutional and corporate sectors. Before joining SIM, Cora was chief executive officer of Sanlam Private Equity from 2006 to 2009.“We wish her well as she begins a new chapter with Redefine,” concludes Pityana.
