Pol­ish ac­qui­si­tions to add shine to Re­de­fine

Financial Mail - Investors Monthly - - Analysis -

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

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