10 October 2022 – The lack of women leaders in real estate may remain a challenge across the industry and a hot topic of discussion, but at Redefine we are bucking the trend as we make significant strides in diversifying our workforce and driving equality. Our commitment to change is leading to significant progress, providing a decided edge for our business.The major advances we have made in recent years was recognised at the recent 10th Gender Mainstreaming Awards, held at Gallagher Estate outside Johannesburg.This was the first time we had been nominated and we are extremely pleased to have achieved third place for Gender Reporting of JSE-Listed Companies. The Awards celebrate and reward those who are actively accelerating equality in the workplace and also highlights the positive impact of gender mainstreaming in Africa.Redefine’s Board level transformation stands out for its gender diversity and inclusivity, with many recent appointments, including that of the company secretary, the audit committee and across the Board, reflecting our values and commitment to transformation and gender equality in the workplace.“This is a significant milestone for us as it highlights that the path we have embarked on to drive change and manage spaces in a way that changes lives is the right one. Our diversity and inclusion and being recognised for the strides we are making is very pleasing and lays a firm foundation for us to build on well into the future,” says Redefine Chairperson, Sipho Pityana.“Our purpose is to create and manage spaces in a way that changes lives and we are entrenching this approach into everything we do. We have embedded diversity into our culture to stimulate diversity of thought,” says Redefine CEO Andrew König.“We also have refreshed our engagement strategy for each stakeholder with an eye on being totally focused on inclusivity,” he concludes.
Johannesburg, 26 September 2022 – Real-estate investment trust (REIT) Redefine and Abland Property Developers’ state-of-the-art S&J Industrial Estate (S&J) in Germiston was recently chosen as the home for popular car brand Isuzu’s new parts and distribution centre. Redefine’s industrial asset manager, Johann Nell, says this is indicative of rising demand for premium industrial features and sustainable solutions among manufacturers, distributors and warehouses.“Redefine is geared for a greener future, and S&J certainly ticks all the right boxes. Notably, it is the first industrial precinct to be EcoDistricts™ Certified outside North America and the first in Africa,” says Nell.“SA’s economy may be facing headwinds right now, but developments in the warehousing property space –this deal with Isuzu is a great example – are leading the way and are indicative of ongoing demand to refine supply chain solutions. Some of this is because of changes in inventory management since COVID lockdowns,” he says.The tailored Isuzu facility is set to be completed early next year, and Redefine says interest and demand for space remains high at the new 210-hectare precinct, which is one of the best connected and most progressive in Gauteng, being located just off the N3 in the south-eastern corridor of Johannesburg.The facility – co-developed with Abland – includes Isuzu’s national training centre and is located within a secure park with 24-hour manned access control, supported by offsite monitoring, and boasts fibre connectivity.“Our approach – aligned with Redefine’s broad vision to deliver sustainability in everything we do – is to offer quality space with a sustainable vision. S&J’s design, for instance, is tailored to cater for a wide spectrum of industrial property needs, encapsulated within a smart, sustainable environment. This adds value to the manufacturers, distributors and warehouses situated in the precinct. It also supports the United Nations (UN) Sustainable Development Goals (SDGs) highlighted in Redefine’s recent capital markets report,” says Nell.Redefine is SA’s first REIT to become a signatory to the UN Global Compact, a voluntary initiative based on CEO commitments to implement universal sustainability principles and support UN goals.S&J’s strategic development goals aim to make a difference to the health and wellbeing of employees in the estate and surrounding communities.This is done through Implementation of sound gender equality practices Increased renewable energy installations Innovative water and energysaving technologies Job creation opportunities Partnerships with social impact organisations in the neighbouring areas“Tenants and community stakeholders are increasingly beginning to see commercial properties through different lenses. It is no longer enough for the buildings to be functional, they also need to contribute to promoting tenant and community health and wellbeing,” concludes Nell.
R1.5 billion raised at Friday’s auction will finance highly-rated green buildingsJohannesburg, 19 Sep 2022 – Redefine’s green building journey continues to make a difference to the planet with the issuance of our first green bond, with the IFC as anchor investor, on Friday.Globally the market for green bonds had grown over 100% year on year as at December 2021, according to RMB, but Africa is lagging well behind. Redefine, however, has placed ESG at the heart of our business and this bond opens another exciting chapter on our journey to achieving a long-term target of net zero carbon status by 2050. The green bond, Redefine’s first, was oversubscribed and raised R1.5 billion at an auction on September 16th. “This bond helps promote sustainability and climate-smart commercial real estate in South Africa, and it was pleasing to note that the bond was well-oversubscribed, indicating heightened demand for companies doing the right thing,” says Ntobeko Nyawo, Redefine’s Chief Financial Officer.Redefine Properties led the charge towards a sustainable future in the property sector with a R1 billion issuance for its first sustainability-linked bond in July last year. “Today’s green bond further amplifies our commitment to placing ESG at the heart of what we do,” says Nyawo. “It diversifies our funding profile, creates liquidity headroom and significantly, this bond is structured on a use-of-proceeds basis, which means it will directly finance only highly rated green buildings, which is firmly in line with Redefine’s over-arching, long-term climate-resilience framework.” The IFC will invest up to R750 million (about $44.1 million) in the bond to support Redefine to refinance its Green Star SA certified assets, which incorporate energy and water efficiency measures. The green bond aligns with the International Capital Market Association Green Bond Principles. It was listed on the Johannesburg Stock Exchange (JSE) in the Sustainability Segment, a platform for companies to raise debt for green, social, and sustainable initiatives.Anelisa Keke, chief sustainability officer at Redefine, says Redefine’s green building journey goes back to 2012 when the company got its first Green Star SA certification.“Since then we have obtained several Green Star SA certifications. Our Green Building programme is part of a long-term journey towards achieving net zero status and provides our key stakeholders with proof that our certified assets have a positive impact on the environment, as well as the health and well-being of our occupants.”Green Star SA rated assets, on existing building performance, are independently certified by the Green Building Council of South Africa every 3 years and are rated based on a variety of operational factors, including (but not limited to) energy and water performance, waste management and recycling, indoor air quality, and green tenant guidelines, including green leases. “This certification does more than simply focus on the resource efficiency of the building (i.e. energy, water and waste); rather, it rates the holistic sustainability features of the asset,” says Keke. IFC’s investment will be used exclusively to refinance existing green buildings which have achieved a minimum Green Star 4 category certification.
Johannesburg, 12 September 2022 – Redefine continues to strengthen its board with the appointment of well-known property expert Simon Fifield as an independent non-executive director. Effective today, he also joins the audit committee, risk compliance and technology committee and investment committee.“Simon is a seasoned, respected expert with a long track record in property. We are excited to welcome him on board and wish him well in his new role. This appointment further strengthens the independence of the Redefine board and his contribution and expertise will, no doubt, be invaluable as we chart a new course into the future and continue to create sustainable value for our stakeholders,” says Redefine Chairperson, Sipho Pityana.The appointment was made in accordance with Redefine’s policy on the appointment of directors. The Redefine audit committee now comprises Diane Radley (Chairperson), Lesego Sennelo and Simon Fifield.Simon, who started out as a land surveyor and engineer in South Africa and the United Kingdom, boasts a BSc Survey, MSc Survey, and is a CFA charter holder.He worked at RMB for 12 years, where he gained experience in the structured finance, private equity and global markets businesses before establishing himself in the investment banking division in which he headed the real estate investment banking business for seven years. He has been a member of the FirstRand Bank property finance credit committee, the IBD investment committee and the RMB Westport investment committee.More recently he worked as chief executive officer of Newpark REIT Limited, a position he will continue to hold until 1 November 2022. In 2017, he relinquished his executive responsibilities at RMB Westport, a real estate development fund which he co-founded, which is focused on property development in sub-Saharan Africa.
Johannesburg, 7 September 2022: JSE-listed diversified real estate investment trust (REIT) Redefine Properties continues to be recognised for its reporting on its ongoing commitment to sustaining value creation for stakeholders. Redefine, for the successive sixth year, retained its top three position in SA at this morning’s EY Excellence in Integrated Reporting Awards 2022, coming in second behind Nedbank. Since 2015, Redefine has consistently featured in the top 10.This ongoing recognition is testament to Redefine’s commitment to the highest standards of integrated reporting and transparent approaches in disclosures and reflects the company’s purpose of creating and managing spaces in a way that changes lives.Redefine believes an integrated approach to making strategic choices sustains value creation for all stakeholders over the long term. The integrated report remains a vital communication tool conveying to stakeholders financial aspects as well as environmental, social and governance strategy, impact and goals. The results are a strong endorsement of the company’s application of integrated thinking on a wide range of issues such as corporate governance, initiatives to protect the environment, and the way it serves its communities.This comes after Redefine refreshed its engagement strategy for each stakeholder with an eye on being totally focused on inclusivity. The company has embraced the hybrid workforce and embedded diversity into its culture. It has adopted a climate resilient framework, and broad sustainability interventions continue to take place across it’s entire operating value chain.The purpose of the awards is to encourage and benchmark standards of excellence in the quality of integrated reporting to investors and stakeholders in SA’s listed sector. The awards are based on how well companies explain to stakeholders how they create value over time and how the board considered material matters to ensure the strategic objectives are met.Redefine believes that the property sector – which permeates so many lives – should be a visible contributor to practices that preserve the environment and promote social cohesion. It remains imperative that the entire sector drives inclusivity and good governance going forward. Redefine believes this will lead to resilience, sustainability (Redefine managed to withstand significant headwinds caused by Covid-19 thanks to its robust sustainability framework) and improved outcomes for more people and communities. For us, financial results are not the only measure of success, hence our integrated report encompasses our strategy and performance in the area of ESG as well as future expectations, commitments and goals.The recognition strengthens our resolve to further embed key sustainability issues in our strategy and present information in a manner that enable stakeholders to analyse and assess our ability to create and sustain value in the medium- to long-term horizon.
Johannesburg, 15 August 2022 – In an ongoing drive to provide drought relief across South Africa, Redefine Properties has donated two water tankers to Africa’s largest disaster relief and humanitarian organisation, Gift of the Givers.Samantha Lambert, general manager for coastal at Redefine Properties, says South Africa has been experiencing drought and drought-like conditions since 2015, and it is essential that more is done to help communities, economies and the people of SA in the face of climate change and related humanitarian threats.“We align our operations and strategies with the utmost respect for inalienable human rights, the health and safety of our stakeholders, and the need to meaningfully transform our society for greater good. We therefore had no hesitation in partnering with Gift of the Givers in the ongoing battle to provide relief to parched regions of SA and offer respite to those facing severe water shortages every day,” she says.In recent times Gift of the Givers has responded to the drought in KwaZulu-Natal, Free State, Limpopo, Northern Cape, and Western Cape – with work being ramped up in the badly hit Nelson Mandela Bay region as dams run dry and day zero draws nearer.During March 2018, the drought in the Western Cape and neighbouring provinces was finally declared a national disaster – but proactive steps by companies like Redefine and organisations like Gift of the Givers helped avert disaster.“We hope we can play a similar role now in other regions that continue to be buffeted by this national emergency and ongoing threat to lives, livelihoods and entire communities,” says Lambert.Redefine initially bought two water tankers in December 2017 with a tank capacity of 10 000 litres and 47 000 litres respectively, to assist the people of the Western Cape during the drought. With the growing need for water delivery in drought ridden areas such as Gqeberha and the KZN regions where the reinstatement of City plumbing networks is still taking place following the recent floods, these water tankers can now continue to address the urgent needs of more people.“As a business, we are thankful that we are able to hand over the trucks and the willingness of Gift of the Givers to partner with us. Founder of Gift of the Givers, Dr Imtiaz Sooliman, references in his book that kindness extends beyond human borders, and we couldn’t agree more,” says Lambert.“Our purpose at Redefine is to create and manage spaces in a way that changes lives. This requires an integrated approach to making strategic choices that will sustain value creation for all stakeholders through focussing on what matters most, like the implementation of our climate resilient framework, while striving for more sustainability interventions across our operating environment.“This work continues and we are excited that the journey of the water trucks can extend beyond the borders of the Western Cape and continue to make a meaningful impact through this partnership with Gift of the Givers,” concludes Lambert.
Johannesburg, 01 August 2022 – Redefine Properties announced that with seven prime office properties in the Rosebank and Sandton corridor already certified in compliance with the National Energy Act and regulations, it is endeavouring to have its entire national office property portfolio compliant with the legislation before the December deadline. “The certification, which is required for any office building of 2 000 sqm or more, has already been completed for 90 Rivonia, 115 West Street, Rosebank Towers, 155 West Street, and 90 Grayston,” says Pieter Strydom, Office asset manager at Redefine Properties, adding “all these buildings achieved top grade ratings. Rosebank Link achieved an A rating, which is the highest certification level and 2 Pybus achieved a B rating.”“We are working steadily to ensure that the remainder of our properties meet the 07 December 2022 certification deadline and that the objective of the National Energy Act to create public awareness around energy usage and efficiency in facilities use in South African buildings is achieved,” says Strydom.“The National Energy Act requires that certificates must be prominently displayed at entrances to all buildings and are regarded as a key step in achieving the national energy-saving objectives. The certificates, which use a rating card similar to that already found on appliances, measure the energy performance of buildings. They clearly define how much energy is being used to operate a facility and are based on energy consumption levels defined in SANS 10400 XA guidelines,” says Anelisa Keke, Chief sustainability officer at Redefine Properties.“The certification process is part of the government’s national energy efficiency strategy targeted to reduce energy use across all sectors of the economy by 29% in 2030, using 2015 as a baseline,” adds Keke.“We support these objectives and believe that our comprehensive Environmental, Social and Governance (ESG) policies provide opportunities to ensure that our business is future proofed. Through our actions, energy consumption in buildings will be reduced and our business sustainability secured.”In the absence of specific South African real estate sector guidance, Redefine Properties moved proactively to adopt a stringent process in setting primary and secondary ESG goals, basing them on international best practice and the United Nations (UN) Sustainable Development Goals. “Redefine has since formalised its ESG targets and become a signatory to the UN Global Compact,” says Keke.“We regard the certification of buildings that fall within the ambit of the National Energy Act as a natural process. It will create more awareness about the importance of energy efficiency, particularly as more companies seek to transition to net zero status; and enable existing and prospective tenants to adopt strategies to reduce energy use and manage their costs,” she concludes.
IWG, the world’s largest workspace network, and Redefine Properties, one of South Africa’s largest diversified Real Estate Investment Trusts (REITs), have partnered to bring their 10th joint flexible working centre to another prime location as an ongoing response to the growing demand for co-working offices within mixed-use retail locations. IWG has been in partnership with Redefine for five years, and their new Regus co-working space at Centurion Mall is conveniently located in the thriving Centurion district, at the corner of Old Johannesburg Road and Lenchen Avenue South. Surrounded by numerous primary and secondary schools, the centre is a family-favourite destination.JLL, the property researcher, says co-working space in retail properties is predicted to grow at an annualised rate of 25% over the next few years. Flexible office space in retail locations will reach 3.4 million square feet by 2023, and nearly 55% of retail co-working spaces are located in suburban areas. According to IWG, being based at the heart of an extra-curricular hub encourages members to bond with each other. By using and exploring these facilities together, tenants strengthen their relationships. Centurion Mall offers the community and commuters a highly accessible shopping hotspot. Spoilt for choice, shoppers have more than 90 stores serving their needs, including anchor stores like Pick n Pay Hyper, Checkers, Mr Price and Builders Warehouse. The anchor stores are complemented by a wide variety of speciality stores, services, banks, and food offerings, serviced by the Gautrain bus route, which drops commuters directly in front of the mall’s main entrance. “Flexible working has changed consumer behaviour, and in line with the evolving needs of consumers, co-working space in shopping centres provides further convenience to consumers. We are exploring other opportunities with IWG for similar co-working space in our other shopping centres,” says Redefine’s National Asset Manager, Nashil Chotoki. IWG brands Regus and Spaces have made a name for themselves as pioneers within mixed-use developments and shopping centres and will continue to explore the trend actively.Joanne Bushell, MD of IWG South Africa, says IWG has a history of pioneering the hybrid model, and businesses recognise the benefits of hybrid working on their productivity and bottom line. “In 2022 and beyond, many modern professionals will no longer be obligated to attend a central office daily, thanks to the mainstream adoption of hybrid working, which means they can base themselves from home or a co-working space – visiting an urban HQ from time to time,” Bushell says. “A new trend in the flexible workspace realm is the conversion of retail spaces to chic co-working offices. The opportunities that these sites present for developers have been deemed as ‘significant’,” adds Bushell. “It means all local amenities such as shops, schools, restaurants and workspaces can be reached easily, reducing travel times, which reduces carbon emissions, and work/life balance will improve, making people more productive and healthier,” says Bushell. Part of IWG's brand DNA is finding settings in desirable areas of a city that offer the right conditions for fostering a sense of community and blending seamlessly with tenants’ lifestyles. Additionally, by integrating co-working space with entertainment and retail, members can run their business, get their shopping done and find food options within walking distance. “Our goal is to create an environment that promotes collaboration and creativity. We’ve found that giving our members direct access to adjacent amenities like retail, entertainment and food locations creates a strong community ‘feel’ as members move around the complex together,” concludes Bushell.
Johannesburg, 30 June 2022 – Redefine Properties and Abland Property Developers are extremely proud to see the industrial precinct in Germiston, S&J Industrial Estate, become the first project outside North America, and the first in Africa, to secure an EcoDistricts™ Certified endorsement.In a truly collaborative approach to saving and protecting the planet and providing sustainable solutions for communities, the EcoDistricts initiative guides city makers to take a collaborative, holistic, neighbourhood-scale approach to community design to achieve rigorous, meaningful performance outcomes.“What really stands out is that the certification was also the quickest yet, from registration to certification, and so it shows that our commitment to entrenching ESG in everything we do is bearing fruit,” says Anelisa Keke, Chief sustainability officer for Redefine.“To be on the team that has taken land that forms part of the undeveloped mining belt in Johannesburg and converted this to an industrial estate that has now been recognised as an EcoDistrict initiative is extremely exciting and a great achievement for all involved. This aligns with Abland’s drive toward sustainability, which is evidenced by various commercial projects that have international Green Star ratings” says Chris Roberg, Director of Abland responsible for S&J Industrial Development.The EcoDistricts approach is regarded as a new model of public-private partnership that emphasises innovation and the deployment of district-scale best practices to create neighbourhoods of the future, which are resilient, vibrant, resource efficient and just. These include impact creation through, amongst others, resource regeneration, health and well-being, and economic prosperity.S&J Industrial Estate forms part of the Ekurhuleni Metropolitan Municipality (EMM), the largest metropolitan municipality in Gauteng, and the sprawling estate spans an impressive 210ha. It caters predominantly for industrial use and is a commercial offering in the area. The City of Johannesburg is also a part of the international C40 Cities initiative, which includes driving meaningful, measurable and sustainable action on climate change.Last year, Redefine Properties and Abland Property Developers, under the guidance of Solid Green, established the S&J Industrial Estate EcoDistricts steering committee (SJEDSC) with the intention to create the initial framework to progress towards a model rooted in community sustainability, ecological awareness, and conservation.Adrie Fourie, Head of Solid Green’s department of sustainable cities and research, comments, “The EcoDistricts Protocol recognises that every community has the ability and need to advance a place-based sustainability agenda. It is designed as a flexible performance framework rather than a prescriptive standard. District teams can tailor the protocol to local circumstances, set performance targets based on local conditions and aspirations, and measure progress against the protocol’s imperatives and priorities.”“The successful conclusion of the certification component is an exciting start to the long-term journey for this project. It also showcases what can be achieved in the SA property sector in securing a future we can all be proud of,” says Johann Nell, Industrial asset manager at Redefine.The future reporting requirements are stringent. The project will be required to submit biennial progress reports beginning on the second anniversary of certification and continuing every two years thereafter. Every urban regeneration decision will be viewed through a comprehensive lens, driving the delivery of meaningful performance outcomes, and setting the conditions for sustainable, collective impact.“Our purpose is to create and manage spaces in a way that changes lives, and we are therefore entrenching ESG into everything we do. This requires an integrated approach to making strategic choices that will sustain value creation for all stakeholders through focusing on what matters most. The EcoDistricts success is a crucial stepping stone and endorsement of the progress we are making to ensure a better future for all South Africans,” concludes Keke.
Johannesburg, 29 June 2022 – Kwena Square, which gets its name from the Sotho word for crocodile, was officially launched today by Redefine Properties in Little Falls, Roodepoort, with Executive Mayor of the City of Johannesburg, Cllr Mpho Phalatse, in attendance.Developed at a cost of R200 million, this is a convenience centre with a difference; designed to tastefully showcase the beauty and vibrance of the area, be environmentally friendly, and efficiently meet evolving shopper demands.In addition to the existing Leroy Merlin and Decathlon, the centre will house 23 new stores anchored by national retailers like Checkers, Checkers Liquor and Clicks.With this centre, a lot of “firsts” have been achieved. Apart from the unique African name, it will be the proud location of the country’s first RocoMamas drive-through and will see the inaugural launch of a Little West Packers toy and baby store.Integration of the local community was a central driver behind the construction, leasing and provision of business opportunities for local subcontractors. Local tenants, showcasing the best SA has to offer, include Benita’s Food Emporium, Neo Vision, My Krafts Brewery, Quello Deli, Nossa Casa Portuguese Restaurant, Suggeee Bar, Uncle Joe Florist, and Fresh House Butchery.A standout feature in the build-up to the launch was a completely community-driven project to find the best local talent to develop the unique design of the benches and dustbins to accentuate the centre’s aesthetics and portray the theme of Kwena Square.The Honourable Mayor unveiled the benches in a special ceremony today, with designer Siviwe Jali from Umugqa Studio proudly watching his brilliant work being opened to the public for the first time.Jali, who was also the finalist in the Nando's Young Hot Talent 2020 bench design competition, has established a name in the industrial industry and hopes to grow in the retail sphere.With sustainability high on the agenda for Redefine, an array of rooftop solar panels will generate as much as 40% of the electricity required by the centre – a key feature that will reduce the load on the main grid.Leon Kok, COO of Redefine Properties says the centre comes just as demand for convenience shopping rises.“The fact that our centre is so aesthetically pleasing is a major plus factor, together with its strong focus on environmental, social and governance (ESG) aspects, while offering ease of use, open ventilation and safety. The completion of the project during the pandemic was notable and reflects our commitment and our tenants’ confidence in the project,” says Kok.
Johannesburg, 8 June 2022 – Following the successful launch of the Hill on Empire business park in the scenic, central and appealing heartland of Parktown in 2017, the developers and owners are gearing up for an even more ambitious, green and modern Phase 2 roll-out going into 2023.The Hill on Empire precinct comprises two office buildings, totalling 31 000sqm of A Grade workspace, with breathtaking views of the Johannesburg skyline. Phase 2 will unlock 15 869sqm of the space at a total development cost of R372 million. Santam and MiWay have already signed up to take occupation on 1 July 2023, and they will fully occupy Phase 2.“Phase 1 offered tenants a view beyond business, but we are really going above and beyond with Phase 2. There is a strong emphasis on sustainability, focusing on efficiency, harnessing green energy and energy efficiency,” says Pieter Strydom, Asset manager from Redefine Properties (JSE: RDF).“The green features of this project include a solar PV plant and energy efficient lighting solutions,” Strydom adds.Speaking at the recent sod-turning ceremony to commence construction, Associate development director at Abland, Simon van Helsdingen, noted that what stands out is that the commercial precinct is on some of the best arterial routes, with Empire Road providing easy access to the city centre and major highways as well as the entire area offering easy access to schools, entertainment and heritage sites, including Constitution Hill.“This location easily connects businesses to all corners of Johannesburg; truly taking businesses to new heights,” Van Helsdingen says.Andre Lotz from Santam adds, “There are obviously many options for lessees at the moment due to an oversupply of office space following the COVID-19 pandemic and businesses adopting hybrid ways of work. We had no hesitation in choosing Hill on Empire as the ideal location to take our business to the next level; ensuring our workforce enjoys great access routes and a modern work environment, connecting it to our intermediaries, clients and communities with the bonus of enjoying access to magnificent cultural and heritage sights all around.”
Johannesburg, 16 May 2022 – Redefine Properties (JSE: RDF), which has a diversified property asset platform worth R71.0 billion, has reported an improvement in its distributable income for the interim period to 28 February 2022. It has delivered distributable income of R1.5 billion, representing growth of 5.9% through a continued focus on the variables under its control of investing strategically, optimising capital, operating efficiently and engaging talent.The local property portfolio performance was driven by the easing of Covid-19 pandemic restrictions, with the return of shoppers to the malls under Redefine management, a welcome development. Redefine also expanded its exposure to the Polish retail sector through the takeover of EPP during March 2022, and received a capital boost from ongoing demand for its growing pipeline of Polish logistics developments.While the board had resolved not to pay a dividend during the volatile and highly uncertain Covid-19 period in 2020, this resumed in 2021 and an interim dividend of 23.69 cents a share has been declared in respect of the half year ended 28 February 2022.“Our results a year ago were in the face of one of the most challenging times in living memory and while greens shoots started appearing recently, along came the war in the Ukraine. If we have learnt anything it is that we can continue to expect the unexpected. For our stakeholders, though, our integrated approach to making strategic choices, managing risks and focusing on quality has ensured we continue to sustain value creation,” says CEO Andrew König.He expects the challenging global economic environment to persist “for the medium term at least”, but South Africa does have an opportunity to benefit from growing demand for natural resource exports. The war in Ukraine, however, is having indirect global impacts in the form of higher inflation, exacerbating the risk of more aggressive interest rate hikes.“Inflation hits everyone through higher food prices and higher energy costs and so while the fallout from the Covid-19 pandemic starts to move out of the system – bar lingering effects – we are seeing higher inflation adding pressure and federal banks responding by tightening rates.”During this volatility and uncertainty, Redefine is focusing on its strategic priorities and not getting distracted by the noise.Redefine CFO, Ntobeko Nyawo says a standout feature has been the quality of earnings, with 97% of income now recurring in nature and sustainable. “This speaks to the underlying health and sustainability of the portfolio,” he says.With the recovery to pre-pandemic levels proceeding well, an average collection rate of 101.3% was recorded, backed by very stable credit metrics – the loan-to-value ratio is a healthy 41.9% and interest cover at 2.7 times.“Balance sheet and risk management places us in a strong position to withstand headwinds. Despite recently paying a dividend for the full 2021 year, our liquidity position includes R4.5 billion in facilities and R1.2 billion in cash, which is solid, enabling us to deliver on our core objectives,” says Nyawo.Another decided edge for Redefine in the face of the ongoing volatility is the risk-mitigation effect of its diverse geographic spread of assets. With international real estate investments valued at R11.5 billion representing 16.2% of the Group’s total property assets, it sees blue skies ahead, especially for logistics and the recently expanded retail exposure.“The Ukraine war is not directly impacting our Polish operations and the logistics sector continues to attract significant investor and tenant demand,” says König. He says Redefine realised one billion rand from the disposal of six non-core properties in Poland, which will be redeployed.“There is still very strong tenant demand driven by nearshoring opportunities from the war and ongoing expansion of e-tailing. It is not just Amazon driving demand either – we are noticing light manufacturers moving from the East, Russia and Ukraine to Poland, driving up demand for space. It is a positive story on logistics in Poland,” says König. An unemployment rate of less than 4% also means ongoing consumer buying power.Locally, the focus remains on driving organic growth in a difficult macro-environment. “While demand for office space is generally limited, we are noting a flight to quality as enquiries for high quality well-located offices are growing. Our office portfolio now consists of 88% premium and A-grade buildings thanks to following a disciplined asset management approach of recycling out of secondary assets and reinvesting in our well-located quality assets over the last number of years,” says COO, Leon Kok. Total tenant retention by GLA improved to 95.6% in the reporting period.Meanwhile, new developments in progress are Kwena Square (a convenience retail centre) at an estimated final cost of R174.9 million as well as an industrial development in Brackengate II, Montagu Snacks, (50.1% share) with an estimated final cost of R22.3 million.While ESG was unfashionable seven years ago, it is now something companies ignore at their peril – and Redefine remains ahead of the curve with Sustainalytics ranking Redefine 36th out of 1,045 REITs globally.“We are well placed to benefit from our integrated approach to embed ESG in all aspects of what we do. The importance of understanding and managing our impact on our environment and all our stakeholders was highlighted by the July unrest and recent flooding in KZN,” says Kok.Redefine also implemented a revised senior management structure that creates depth and drives more inclusion and diversity, to create an environment that stimulates innovation.An additional 19.1 MWp of solar PV capacity is being added to enhance value during 2022.“We have responded to the challenges created by the Covid-19 pandemic to reset all aspects of what we do. We have simplified our asset platform and reduced exposure to multiple risk universes and what we have is now beginning to bear fruit. We are primed for creating sustained value as we build the future-fit Redefine of tomorrow,” concludes König.
Redefine wins twin awards for excellence and innovation in facilities managementJohannesburg, 25 April 2022 – The combination of a depressed economy, ageing and deteriorating infrastructure, scarce natural resources and the disastrous effects of climate change is raising the stakes for the property and facilities management sector to drive sustainable and environmentally conscious solutions, says Leon Kok, COO, Redefine Properties.This comes as Redefine Properties is recognised for excellence in its exploration and implementation of sustainable water and facilities management solutions in the past year.Notably, Redefine’s innovation in the use of ground- and rainwater at its Wonderboom Junction Shopping Centre in the city of Tshwane was a standout example of smart conservation in action, securing the award for excellence in facilities management at the recent South African Facilities Management Awards. Walter Nel, Regional Portfolio Facilities Manager at Redefine Properties also walked away with the most coveted award: facilities manager of the year.The Wonderboom project not only addressed the risk of flood damage, which is exacerbated by being located in an area subject to high levels of groundwater, but also supported Redefine’s overall goal to reduce the amount of water withdrawn from municipal and borehole sources. This installation was commissioned in the middle of the Covid-19 pandemic in 2021, and it is especially noteworthy that the success of this means that in future water can be acquired from sources other than bulk municipal water connections.Furthermore, the harvesting, storage and reticulation of rainwater to end-user demand points were devised with locally available products in mind to ease future replacement component availability and to create a template for implementations at other sites in the future. The water harvesting and reticulation system is also supported by solar PV energy.Kok says that Wonderboom’s bulk rainwater harvesting process currently delivers 12% of the annual building demand and the remainder of the building water demand will be supplied from groundwater sources to alleviate pressure and dependence on bulk council water connections.Kok believes that projects such as this are crucial to ensuring available natural resources are collectively optimised, with the benefits of these immediate savings stretching beyond the boundaries of Redefine’s assets to help create a more sustainable future. “We applaud the efforts of our facilities management team to drive innovation and keep the environment top of mind. This is firmly in line with our commitment to be an ESG leader in the real estate markets in which we operate.”
Johannesburg, 10 March 2022 – Bottlenecks of supply caused by the COVID-19 lockdowns are easing, opening the door to exciting commercial sector property growth. But national asset manager for industrial properties at Redefine Properties, Johann Nell, says the market looks very different today – raising the stakes for operators to think outside of the box.“With the capital costs of relocating high, logistics companies, for instance, are looking for a better deal. Instead of just renting one ‘box’, they want a facility that includes add-ons and technology, like racking and other supply chain components, as well as more climate-friendly and secure solutions. There is then one product accessed at one venue and then taken to their customer,” he says.Some tenants also want a vested interest in the properties they rent. Nell explains that some show interest in purchasing the warehousing facilities later in a lease, while others prefer a joint-ownership model.Historically, a landlord would rent out a warehouse and leave the internal design and kitting out to the tenant.Nell says logistics companies are increasingly looking to allocate their capital differently rather than tying up large up-front amounts of working capital into racking, shelving and design. Demand for space in the 10 000sqm space and above is heating up significantly, with limited stock leading to high levels of competition.“There is a bit of a scramble for available space as supply chains open up after COVID-19-induced lockdowns. However, scarcity is also leading to more building activity and innovation,” he explains.Redefine has grabbed the opportunity to convert and retrofit existing facilities to meet the growing needs of logistics and other industrial clients.“The industrial sector was resilient during COVID-19 and is now the flavour of the month, backed by the rebounding growth in the retail sector. There is clearly a growing need for storage space, as commercial companies look to keep more inventory,” says Nell.Nell says an important fillip for the economy is that manufacturing activity is also showing signs of recovery. He says growth in manufacturing bodes well for the economy, as this a key engine room for jobs and sustainable business growth.“There are new opportunities to provide more tailored solutions for manufacturers, especially after the recent riots across KwaZulu-Natal (KZN) and Gauteng,” he says.A major trend is e-commerce driving warehouse consolidation and supply chain expansion, which is increasing demand for new racked warehousing space.Another major trend is smart-tech systems enhancing tenant user experience. Nell says all of these developments mean serviced, developable land remains in high demand.According to researchandmarkets.com, COVID-19 reflected notable changes in retail in South Africa, namely, with a shrinking brick-and-mortar market and accelerated store closures, the business-to-consumer (B2C) e-commerce market grew by more than 60% from 2019 to 2020. In addition, there was a nearly 10 percentage point increase in online shopper penetration in the country from 2019 to 2020.Mastercard has also reported that online retail in South Africa more than doubled in just two years, thanks to the explosion in demand for home deliveries brought about by the COVID-19 pandemic.Improved sentiment in manufacturing is mirrored in recent statistics, with purchasing managers more optimistic about the coming months. According to media reports, a gauge tracking expected business conditions in six months’ time jumped to an almost four-year high of 71.3 points, more than 10 points above last year’s average reading.In the aftermath of the July riots in Durban and disruption to the KZN logistics sector, Nell says there was a demand for short-term warehousing in Gauteng. However, not all companies have been able to relocate due to the costs involved.“So what we are also seeing is increased demand for value offerings – not just a building but a greener building, with solar panels on the roof and with enhanced security. Demand for space in KZN remains solid,” he says.Global trends also indicate exciting potential ahead. According to CBRE, amid record demand in US rent growth and investment activity, industrial real estate “will stay hot in 2022”. E-commerce’s expansion will fuel the need for more warehouse space as will the growing economy, population migration, and the desire for “safety stock” onshore.Interesting trends in Europe, the Middle East, and Africa (EMEA) are also taking shape. BRE surveyed over 100 of the largest logistics occupiers in Europe to gain insights on their expansion plans, current challenges, location and building preferences, and the impact of COVID-19 on their real estate strategies.Nell says, based on these trends, Redefine continues to protect, refine and improve its portfolio, with several projects earmarked for roll-out. “We have embarked on a technology drive to make it easier for end users to manage their businesses and give them the flexibility to structure the facility to suit their operation.”“We will continue to allocate capital where we believe the best market opportunities lie, while participating with other development firms to offer customised and creative development solutions, either through improvements to existing premises or through greenfield developments,” concludes Nell.
The past few months have been tumultuous and volatile for the local and global economies, but Redefine Properties (JSE: RDF) is well positioned for sustained value creation and growth.Speaking during the pre-close for the half year ending 28 February 2022, CEO Andrew König says the company is firmly focused on executing its strategic priorities further in 2022. These include embedding a revised executive committee structure that drives more inclusion and diversity, on-boarding the R26.2 billion EPP portfolio, the introduction of a climate resilience framework and continuing to de-risk and refine the asset platform.“Redefine is now primed for growth after we used the crisis to reset and refine every aspect of what we do. We have exited multiple geographies, optimised what we have and positioned every asset for the best possible sustainable capital and income growth prospects, while entrenching ESG into everything we do,” says König.At a time when growth is constrained for many peers, Redefine is set to expand its asset base and footprint with the takeover of EPP. The transaction received the thumbs up from shareholders in January and the business will be fully integrated into Redefine during the second half of 2022. With all conditions fulfilled, the delisting of EPP is set to take place on 8 March.“This deal is transformative as it is Poland’s largest retail landlord and amounts to an estimated R7.2 billion in additional equity for Redefine and adds around R19.7 billion of total assets onto our balance sheet. This equates to about an additional 19.8% of shares in issue for Redefine. In the next six months we will be focusing on integrating EPP into our business in a sustainable way that maximises long-term value creation,” says König.The strategic reset for Redefine has entailed a recent reconstitution of its executive committee.“We are bringing more depth and balance to our executive committee (ExCo), incorporating a broader range of strategic skills to take us forward sustainably and effectively,” says König. New additions include the Company Secretary, Chief Sustainability Officer, Chief People and Chief Legal and Regulatory Officers.“All the good work, restructuring and refining what we have is now bearing fruit and ensuring we are well positioned to benefit from the eventual upward cycle,” says König.For the future, the focus turns to refining the asset platform further by recycling any remaining unproductive domestic assets. Internationally, numerous logistics developments will be pursued in Poland.“I don’t think there will be fireworks from the SA economy for some time. We are more focused on the variables under our control,” adds König.Redefine CFO, Ntobeko Nyawo says the integration of EPP will support Redefine’s medium-term growth outlook, while the company’s credit metrics remain “very stable”.“We have maintained good liquidity thanks to disposals and strong cash generation. We are actually getting to a point where our recoveries are at 103% as we recover Covid-19 deferrals,” he says.“The quality of earnings is therefore getting more sustainable, enhancing our ability to build and grow,” says Nyawo.Nyawo says a loan to value close to 40% should be achieved in FY2022 based on disposals and earnings generated.COO Leon Kok says while conditions locally remain challenging, there are some signs of recovery, especially in the retail space. He says turnover from retail tenants is now at around 105% of their pre-Covid-19 levels. “The recovery is largely being driven by homeware and essential services, which are now at about 110% of their 2019 levels.”Online shopping has seen significant growth in reported sales, driven by the grocery and pharmacy sectors. However, Kok says all indications point to online and physical retail co-existing. “As a landlord we are looking at ways to embrace that and make sure offerings are more seamless, for instance by accommodating growing demand for click and collect and to also drive loyalty,” he says.The office sector is under the most pressure, with vacancy rates increasing to 16% from 14% before – the highest it has ever been.“I don’t see much in terms of improvement given that a lot of space is available and demand is low thanks to unemployment. However, the key is to make sure we retain the tenants we do have by making sure assets are relevant to their needs. For instance, we are focusing on improved health and safety and sustainability initiatives,” he says.Kok says the office space is beginning to show some signs of life as workers gradually begin to return to physical offices, though in many cases still for only a few days a week.“I think we might see that trend continue as many employers embrace flexible working arrangements.”Kok says the industrial portfolio has remained defensive, with demand for logistics solutions driven principally by the retail growth. “Logistics remains very competitive, but participants are becoming more cost conscious, making cost management critically important,” he says.Kok says Redefine’s diversity across the sectors remains a key benefit. “Over the years we have been actively recycling assets to improve the overall quality of our portfolio. In these uncertain times, I believe the old adage of a ‘flight to quality’ will hold true.”Internationally, Redefine’s logistics pipeline in Poland continues to grow. This includes two projects of 96,917 square metres to gross leasable area (GLA) and further projects of 207,420 square metres under construction to be completed in the next six monthsAnother highlight over the past six months on the international front was the receipt of the proceeds from the sale of the remaining student accommodation property in Australia, during first week of February.As part of its Moonshot strategy, Redefine is driving ESG as a key strategic thrust. Redefine is SA’s first REIT to become a signatory to the UN Global Compact.“Redefine’s purpose is to create and manage spaces in a way that changes lives, which requires more than a business as usual approach: it requires an integrated approach to making strategic choices that will sustain value creation for all stakeholders through focussing on what matters most. We are firmly on track to doing just that,” concludes König.Redefine’s half year results to 28 February 2022 will be announced on 16 May.
Sandton, South Africa: The construction on Redefine Properties’ Kwena Square on the West Rand is progressing well and is expected to be completed on schedule during May 2022. The JSE listed diversified real estate investment trust intends to open the shopping centre to the public during mid-2022. Located centrally in Little Falls, Roodepoort, it features over 10 000m2 of convenience shopping space. The centre gets its name from the Sotho meaning for crocodile, koena (kwena) which accentuates the abundant natural beauty within the Little Falls, Strubens Valley and surrounding areas. The Crocodile River also has its source in the Witwatersrand Mountain range, originating in Constantia Kloof, Roodepoort, which is near the current site. Developed at a cost of R210 million, Kwena Square will house 23 stores anchored by national retailers like Checkers, Checkers Liquor, Clicks and boasts one of the country’s first drive-thru RocoMamas besides other restaurants and coffee shops. Parking bays to accommodate 407 cars at any time have been provided. Already over 60% of the centre has been pre-let to tenants who represent a diverse line of local and national brands. An array of rooftop solar panels will generate as much as 25% of the electricity required by the centre, a key feature which will reduce the load on the main grid. Redefine recently unveiled its Moonshot Strategy setting a target to deliver the smartest and most sustainable spaces by the end of this decade and has since been focusing on energy efficiency and renewable energy to help it to reach its goal. In 2022, Redefine will focus on executing its strategic priorities having introduced a climate resilience framework, striving for more sustainability interventions across its operating environment and investing strategically. Leon Kok, COO, Redefine Properties says, “We are ready to put the efforts in towards meeting our commitment to convert all buildings in our portfolio to net zero carbon, water and waste by 2050. The process has begun with our newer projects and demonstrates our ongoing focus to reduce our carbon footprint. We have an overarching ambition to be a force for good.” A new study by MSCI shows that some areas of retail like convenience shopping centres are seeing a rise in sales and visitors with trading densities exceeding pre-Covid levels. Thanks to time-pressed consumers juggling work-from-home and making quick stops for groceries to avoid crowds, the need for convenience became paramount during Covid-19. “Kwena Square entrenches the trend we first identified on the re-emergence of convenience centres, a shopping format most favoured during the pandemic for its ease of use and open ventilation enhancing safety. The completion of the project during a pandemic reflects our commitment and our tenants’ confidence in the project and the neighbourhood,” adds Kok. “A convenience centre like Kwena Square addresses changing shopping habits and is positioned to efficiently meet evolving demands of shoppers.”
Sandton, South Africa: Redefine Properties says young innovators in the business are informing its perspective on how to solve complex issues facing the industry, while positively shaping the built environment. As part of its Moonshot strategy, Redefine, aims to build the smartest and most sustainable buildings the world has ever known in the regions in which it operates over the next decade.Redefine recently presented the strategy and its impact as one of 32 companies selected globally to showcase their commitment to ESG at the UN Global Compact’s Young SDG Innovator Summit in September 2021.Redefine is SA’s first REIT to become a signatory to the UN Global Compact, a voluntary initiative based on CEO commitments to implement universal sustainability principles and support UN goals. The compact is the world's largest corporate sustainability initiative of its kind with 13 000 corporate participants.The chasm between all strata of society was harshly exposed during the height of the Covid-19 pandemic. The hard lockdown held the mirror to the archaic idea of pursuing profits at all costs, thus forcing many businesses to revaluate their core purpose. The link between ESG, business strategy and risks has never been clearer than during Covid-19.Redefine’s ESG strategy is a step towards strengthening its long-term Moonshot strategy and has the full support of the board, who have sight of the company’s ESG frameworks and compliance.The Moonshot strategy rests on five pathways, one of the critical ones “being a force for good”. Investors, tenants and increasingly communities, are beginning to see commercial properties through different lenses. It is no longer enough for the buildings to be sustainable and be efficient, they also need to contribute to promoting tenant and community health and well-being.With two years already shaved off the decade long timeline for the fulfilment of the Moonshot strategy, Redefine has set itself targets across its portfolio to reduce reliance on grid energy, water consumption, waste-to-landfill as well as fast-tracking green energy projects, especially solar. In the new normal, Redefine sees opportunities in creating ‘liveable’ environments and contributing to better life experiences through sustainable building design principles.“The age-old proverb - if you want to go fast, go alone and if you want to go far, go together, holds valuable lessons in the built environment. While Redefine has a good handle on how to design, build and operate sustainable buildings, the shell or infrastructure represents only a portion of the building’s energy profile. What happens in the tenant space also has a huge impact on the environment,” adds Keke.“Green leases are catching on and we are keen for key tenants to work with us in this regard. These leases encourage tenants to identify and implement alternatives in their own spaces in areas such as energy efficiency, recycling and other environmental priorities etc. We are also walking the talk by digitising all tenant leases, saving as many as 250 pages per lease.”Keke notes the guidance provided by the Green Building Council of South Africa to ensure the “E” in ESG remains front and centre in the built environment as well as the progressive work being done by South African Property Owners Association as well as SAREIT.“Our long-term vision is to help coordinate actions with industry groupings and continue leading the industry by further embedding ESG across the company, in and through how we invest, operate and manage our assets.”According to Bloomberg Green, the global sustainability bond market has performed exceedingly well. The first six months in 2021, saw more ESG-related bonds issued than during all of 2020. And while the sector still represents a fraction of the overall bond market, it is quickly gaining ground, with sovereign investors and others required to account for a certain percentage of their funds going into green bonds.“SA needs more examples of successful sustainable bond issuances so that the sector can benefit from reduced cost of capital,” says Keke.“Redefine’s Moonshot is to ensure that its ESG efforts benefit both the planet and people and encourages the use of its spaces in a way that changes lives. Our scale allows us to implement our innovative approach across a large number of our existing properties and new projects and believe that if we keep the momentum going, we will have a significant positive impact on spaces, people, communities and climate which all makes good business sense.”
Redefine’s popular Alice Lane development, which sets the benchmark for mixed use development, is embracing the Johannesburg-wide “Be Kind” artwork initiative.“Be Kind” relates to a series of 18 art installations around the streets of Johannesburg, the brainchild of Rabbi David Masinter. The aim is to spread positive thinking and upliftment after a difficult two Covid-19 years.Redefine’s National office asset manager, Pieter Strydom, says Alice Lane is giving new meaning to mixed use office space in the Sandton hub and sets the benchmark for developments in the future, which is why partnering on “Be Kind” is seen as an important and relevant partnership for Redefine.“Alice Lane offers a safe, relaxing, and stunning business environment for those who expect only the best. It is therefore a perfect fit as a partner for the ‘Be Kind’’ initiative and we are proud to associate ourselves with a move to lift the spirits of people visiting Sandton and also more broadly, Johannesburg.”Rabbi Masinter is a firm believer in humanity and compassion of people – especially South Africans. The “Be Kind” project aims to embrace the beauty around them and share positivity with everyone in the City of Gold.Alice Lane lives up to these very ideals as it seamlessly integrates state-of-the-art building systems with easy accessibility and convenience. It’s also a sustainable, environmentally friendly development, created with non-toxic materials and built to a 4 Star Green Star status, the first Green Star-rated precinct in the area.
Redefine Properties (JSE: RDF) has received the green light from shareholders to finalise the delisting and takeover of EPP (JSE: EPP), Poland’s largest retail landlord.The deal, which is still subject to finalisation of outstanding conditions precedent and regulatory requirements, amounts to an estimated R7.2 billion in additional equity for Redefine and adds around R19.7 billion of total assets onto its balance sheet.On Friday last week, the key step to finalisation of this significant transaction was completed when the proposal received overwhelming support from both Redefine and EPP shareholders. It entails a share-for-share offer by Redefine to acquire all the remaining shares in EPP it does not already own upon delisting thereof.This will take place at a swap ratio of 2.70 Redefine shares for each EPP share held, to a maximum of 1.1 billion if everyone converts to Redefine shares. Redefine currently holds 45.4% in EPP and on completion of the transaction, the Polish-centred offshore component of its overall portfolio is likely to increase to 30%."I was very pleased and encouraged by the high level of Redefine’s shareholder support, with an approval of 78.3% being achieved," says Redefine CEO Andrew König.He says the support reflects the fact that the transaction ticks several strategic boxes. These include reducing risk, simplifying Redefine’s investment and asset platform and eliminating exposure to a listed investment where Redefine as a minority shareholder had limited input over funding or liquidity management. It also opens the door to exciting retail market opportunities in the Polish market as it accelerates its recovery from the Covid-19 pandemic."We have always been bullish on the Polish retail market and all indications are the Polish economy will grow in excess of 4% this year. Retail sales are on the rise and we are excited to now have a single entry point into this market via Redefine," he says."I am glad that our investors supported EPP delisting and restructuring proposals with a large majority. It was not an easy decision to make. I believe that once the company's reorganisation is completed, EPP will be in a position to return to the growth path, as well as to regularly deliver dividends to its shareholders," said Tomasz Trzósło, CEO of EPP. I also would like to thank the EPP team who put a lot of work into completing this project within a very tight deadline.Konig says the deal protects Redefine’s carrying value in EPP from dilutive value destruction and fits perfectly with moves to a more sustainable funding model in which debt is matched to stable assets, rather than underlying listed shares, that are subject to the vagaries of financial markets.With EPP unable to pay dividends for the past two years and facing significant loan maturities in 2022 and 2023, the deal’s core objective is to significantly reduce EPP’s debt through a liquidity generating restructure, which will restore it to a dividend paying position.EPP has a loan to value (LTV) of approximately 56% and Konig says it was therefore important to solve the liquidity challenge it was facing, without in any way impacting Redefine’s own LTV ratio."Redefine wanted to avoid these liquidity challenges to impact negatively on our own LTV of 41.6%, which we have worked hard to achieve," explains Konig. As a consequence of the restructure, EPP’s LTV reduces to well below 35% and as a consequence there is a marginal effect on Redefine."A lower LTV for EPP bodes very well for its ability to access liquid and well-priced Eurobond markets and open up new sources of funding. This gives us a lot of financial flexibility offshore," explains Konig.Redefine’s credit metrics also improve, with its interest cover ratio moving from 2.5 times to beyond 3 times.Konig explains that as the controlling shareholder of EPP, Redefine will be in a stronger position to drive initiatives to return EPP to a dividend paying position in the short term, thereby delivering improved distributions to Redefine shareholders."Redefine’s shareholders will obtain additional exposure to prime Polish retail assets directly held through EPP and there will no longer be two listed entry points to EPP, providing Redefine with a differentiated investment proposition on the JSE and potentially enhanced liquidity. This is a win-win and I believe this is why the results of the shareholder votes were so overwhelming," he concludes
Redefine Properties today announced that it proposes to make a share-for-share offer to acquire all the remaining shares in EPP it does not already own (excluding the shares held by IGroup). By implementing the delisting and acquiring control of EPP, Redefine will be able to procure the implementation by EPP of a reorganisation which is aimed at bolstering EPP’s balance sheet and significantly reduce the extent of its gearing to restore EPP to a dividend paying position. The EPP Board has expressed its intention (subject to EPP’s independent expert financial advisor confirming its preliminary opinion that Redefine’s offer is fair) to recommend that the proposed delisting and Redefine offer as being in the best interests of EPP and its shareholders and that EPP shareholders approve of all required resolutions to effect the proposed transaction. If approved, the transaction will see EPP delist from the JSE and Luxembourg Stock Exchanges and operate as a subsidiary of Redefine Properties. “The reorganisation will resolve EPP’s liquidity issues and eliminate the potential need for EPP to undertake an equity capital raise, which given the current economic climate be value destructive to existing EPP shareholders. Redefine will also become the sole listed point of entry into EPP, differentiating Redefine’s investment proposition, thereby potentially improving the liquidity of Redefine shares,” adds König. Redefine holds 45.4% of EPP with a R6.5 billion carrying value. The proposal places Redefine in a good position to benefit as retail demand improves in Poland. It will also drive diversification, with the Polish-centred offshore component of its overall portfolio likely to increase to 30%. EPP’s high level of gearing (c.55.6%) and liquidity challenges including significant loan maturities in 2022 and 2023 has meant that EPP has not been able to pay dividends since mid-2019. Besides impacting Redefine’s distributable income, the loss of dividend income from EPP has also impacted negatively on Redefine’s interest cover ratio and corresponding loan covenant headroom. “The EPP transaction is a compelling opportunity for us to stabilise and simplify our international investment in a portfolio of assets we know well and which are well-located in key metropolitan areas of Poland,” says Andrew König, CEO, Redefine. “Given challenging market conditions some on the back of ever evolving Covid-19 situation, EPP has not been able to deliver on its asset disposal strategy required to bolster its balance sheet and to manage liquidity requirements. The transaction will strengthen EPP’s balance sheet and gives us the mandate to pursue opportunities throughout EPP’s portfolio.” Without intervention, the prospect of EPP resuming regular dividend payments in the short to medium term are slim. This creates high potential for a longer-term dividend drought which has a material adverse impact on Redefine and is not aligned to Redefine’s REIT ‘income fund’ investment proposition. According to Redefine, the acquisition of a controlling stake in EPP furthers its strategy to simplify its investment proposition and actively manage risks and opportunities by exiting minority investments or gaining strategic control of assets where it already has a major stake. The Redefine offer will be made to all other EPP shareholders at a swap ratio of 2.70 Redefine shares for each EPP share held. Should shareholders of EPP approve the transaction, Redefine will (assuming 100% acceptance of the Redefine offer) issue up to 1 135 037 043 new Redefine shares. Redefine shareholders will also need to approve a shareholder resolution giving authority to Redefine to issue these new shares. The deal is subject to satisfaction of various conditions precedent, including the execution of transaction agreements and those agreements becoming unconditional, securing all required regulatory approvals and the approval of by a majority of EPP shareholders (other than Redefine and I Group), of the EPP delisting.
