Polish acquisitions to add shine to Redefine
Though Redefine Properties, one of the JSE’s top five real estate counters in terms of size, has appeared regularly on analysts’ stock picking lists as a value play, its share price has disappointed in recent years. For calendar 2015, Redefine delivered a total return of -2,5%, well below the SA listed property index’s 8%.
However, it seems investors are finally buying into Redefine’s transformation. The share price is up more than 20% since January 21. Management, under CEO Andrew Konig and co-founder and executive chairman Marc Wainer, has over the past 12-18 months improved the quality and scale of Redefine’s portfolio, and diversified its offshore footprint.
Earlier this month, Redefine surprised the market by announcing its entry into Eastern Europe with the acquisition of a 75% interest in a ¤1,2bn portfolio of 18 shopping centres and office blocks in Poland. The share price jumped 8% within two days. The flagship retail asset in the portfolio is the 77,400 m² Galeria Echo centre in Kielce.
The deal, which will take Redefine’s offshore portfolio from the current 17%-25% of total assets, is a coup given how difficult it is for SA listed property funds to acquire such a sizeable portfolio of assets in one move. Redefine’s offshore property interests are valued around R9bn, including a 26% stake in Australian-listed Cromwell and 30% in UK and Germany-focused