Redefine strategy to dispose properties on track
Redefine Properties’ strategy to dispose of properties that no longer fit the profile of the portfolio is on track, with 22 properties transferred since 1 September 2010.
The properties have been sold for R499-million, at a yield of approximately 9%, and a surplus on book value of R78-million.
Redefine chief operations officer, David Rice, says the company’s strategy is to improve the quality of the property portfolio, by disposing of a number of properties that don’t fit the profile of the ‘new-look’ Redefine and using the proceeds to acquire properties of higher quality and value, with the aim of having a portfolio of similar value but fewer properties
“We have disposed of 86 000m2 of retail, office and industrial space, predominantly in smaller properties situated in outlying areas that are challenging to manage cost effectively. The values of the properties sold to date in this financial year range from R1.5-million to R60-million, other than the 35 600m2 De Bruyn building in Pretoria, which was sold for R180-million.
“De Bruyn is a government tenanted building, which was sold as part of Redefine’s strategy of reducing its exposure to ageing CBD properties where income is predominantly from government leases,” he says.
Rice says the buildings transferred to date have been sold individually, but Redefine is currently negotiating the disposal of three large portfolios which will fast track the disposal strategy. These portfolio disposals are expected to be announced before the end of the financial year.