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.

Finweek English Edition - - ON TMHOEN EY - By Glenda Wil­liams

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.”

Pi­o­neer­ing moves

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.

Mike Wat­ters

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