Redefine’s R5bn dividend

FORECAST: SLOWER GROWTH EXPECTED IN 2019

Property assets increased by R7.2 billion to R91.3 billion over the financial year.

Redefine Properties posted distribution growth of 5.5% for its 2018 financial year as its gross dividend reached R5.2 billion. However, the JSE-listed Real Estate Investment Trust (Reit) has lower growth expectations of between 4% and 5% for 2019.

Speaking on Monday at the release of its full-year results to August 31, Redefine CEO Andrew König said he was pleased with the performance, given the tough local market conditions.

The dividend per share of 97.10 cents was in line with its market guidance for 2018 of 5 to 6%.

“We believe we have done well, despite current market conditions. Redefine’s successes in the current market far outweigh challenges,” said König.

“This is reflected in the fact that we have seen a tangible growth in our property assets over the financial year, which increased by R7.2 billion to R91.3 billion.”

“We’ve been optimising our assets by selling properties that are at the top end of their cycle and reinvesting in new assets that offer greater growth prospects.

“Redefine has also been relentless in driving operational efficiencies in this tough economic environment.

“This has seen an improvement in our overall occupancies to 95.5% and trading densities within our retail portfolio increasing by 3.3%.”

König said Redefine had deployed R11 billion for acquisitions, new developments and upgrades during the year.

Redefine’s disposals in Australia – of the Northpoint property and its sale of most of its stake in Cromwell Property Group – fetched R5.2 billion alone.

Highlighting Redefine’s commitment to both its home market and its international diversification drive, König said the R11 billion was deployed in virtually a 50/50 split between local and offshore investments.

Almost R5 billion was invested in Poland, including R3.1 billion for a logistics portfolio and R839 million for shares in Polish property group EPP.

Its largest SA acquisition during the period was R751 million for the remaining stake of the landmark 115 West Street building in Sandton.

On the development front, projects worth about R5.3 billion were undertaken – almost R790 million on the new Hatfield Square student accommodation development, R453 million on its stake in the Loftus Park mixed-use development in Pretoria, R383 million for phase one of the Hirt & Carter industrial property project at Cornubia in Durban, and R249 million on Stoneridge Centre in Edenvale.

Redefine will continue to focus on the SA and Polish markets and that most of the group’s investments locally would go into new developments or upgrades.

While Redefine’s office vacancies were up 1% to 9.5% for the year and retail vacancies up from 3.3% to 4.5%, its industrial vacancies dropped from 3.3% to just 1%.

The performance of its industrial property portfolio boosted the overall occupancy level of the group.

“Redefine’s international real estate investments now make up about 21% of our total portfolio,” said König.

“We would like to increase this to 25% in the medium term and up to 30% in the long term.”