A pioneer of the REIT sector
He was part of the golden age of listed property and instrumental in kick-starting the REIT sector. Meet Mike Watters, CEO of Redefine International.
mike Watters is, at first glance, the embodiment of a corporate CEO. But there’s a sense of underlying shyness that is at odds with that image. He’s not that comfortable talking about himself. Even so, friendships formed in his youth that endure to this day tell you quite a bit about the man who heads up Redefine International.
There is no reserve when it comes to talking about the property sector and the company that he has grown from £5m into what is today a UK real estate investment trust (REIT) with a market cap of around £700m (about R11bn) and a £1.53bn (about R24.5bn) property portfolio.
Watters describes himself as fortunate. Perhaps because the fact that he ended up in the REIT sector was not initially of his own making. The irony is that the property and trust sector that Watters found himself in was one that was totally out of favour when he first started working in corporate finance at Standard Merchant Bank.
“It was a bit of a joke in the late 1980s,” quips Watters.
But the team at Standard Merchant was very innovative and helped create the loan stock sector, building on the work that had been done by Gavan Ryan who, at the time, was head of UAL Merchant Bank Ltd.
“Gavan came up with the idea of a variable rate loan stock that paid out all the interest deducted against tax, that way recreating the unit trust without the extreme laws.” CEO of Redefine International It started the ball rolling for what is today the REIT sector. “I was very fortunate. I didn’t realise it was my lucky break because that was the start of the golden age of listed property.”
Watters spent years “having fun listing a whole lot of property companies” before setting out on his own, something he was able to do with the backing of the Coronation Group. While building Corovest into a large SA business, he met Marc Wainer (executive chairman of Redefine Properties, a local REIT that has a major shareholding in Redefine International). It was not long before the two decided to expand offshore. But in the early 2000s companies were not permitted to take money offshore and it took some convincing the Reserve Bank. “We had a business plan and they eventually allowed us to externalise £5m in
Redefine International’s property portfolio includes Banbury Cross Retail Park in Oxfordshire, UK.