Redefine to concentrate on Fountainhead retail assets

REDEFINE Properties has plans for Fountainhead Property Trust — plans it is comfortable it can implement given it is well placed to block Growthpoint Properties’ bid for Fountainhead’s assets.

Redefine CEO Marc Wainer said Redefine’s holding of 45.6% of Fountainhead’s issued units translated into a R5bn investment. Redefine also bought Fountainhead’s management company for R600m last year.

Growthpoint and Redefine were both bidding for Fountainhead’s R10.3bn portfolio in the past few months until Redefine withdrew its offer last month, saying there was “no resolution in sight” and that the delays and uncertainty were negatively affecting its ability to run Fountainhead’s business.

Redefine bought a large stake in Fountainhead to align Redefine and Fountainhead unitholders’ interests and to block Growthpoint’s offer — its shareholding would make it difficult for Growthpoint to win a unitholder vote on the assets.

Mr Wainer said yesterday Rede- fine was “pleased” with the decision last week by the independent committee of Fountainhead’s board to end discussions with Growthpoint,

Redefine ‘pleased’ with independent committee’s decision to end discussions with Growthpoint

thereby “ending an extended period of uncertainty for Fountainhead unitholders”.

He said Fountainhead planned “to run it differently”. While Fountainhead was a property unit trust, it would be run “very much on the lines of a listed company”.

This would allow unitholders to attend annual general meetings and provide “total transparency”.

Redefine had identified opportunities to add space and value to major Fountainhead assets, including Centurion Mall, The Brightwater Commons and Kenilworth Centre.

“We will also be looking to dispose of noncore properties. They have … very small properties which are not core to the portfolio.”

Mr Wainer said the plan was for Fountainhead to have “very much a retail bias” in the future.

In terms of asset management between Redefine and Fountainhead, Mr Wainer said if Redefine identified an opportunity, Fountainhead would be offered participation in deals.

Fountainhead also needed to appoint various staff, including a fulltime CEO, a chief financial officer and portfolio managers.

“We want to restructure the debt, which we weren’t able to do before because we couldn’t go to the debt capital markets with the uncertainty — nobody was going to take Fountainhead bonds.”

Mr Wainer said that Redefine was, for the time being, happy with its Fountainhead unitholding, which was a comfortable blocking mechanism for any Growthpoint bid vote.

Redefine would not actively look to increase its stake in Fountainhead at this stage.