Redefine International declares distributable income growth

Michael Watters, CEO of the Redefine International Group, attributes the significant improvement in performance to strengthening the group’s financial position

Rand-Hedge property player Redefine International‚ which started trading on Monday in its new guise as a secondary inward listing on the JSE‚ on Tuesday declared distributable income growth of a healthy 18% for the year to August 31.

Redefine International is a diversified income focused property company which holds a primary listing on the London Stock Exchange.

Michael Watters, CEO of the Redefine International Group, attributes the significant improvement in performance to strengthening the group’s financial position, its enhanced property portfolio quality achieved through acquisitions, disposals and asset management, and its corporate restructuring.

Watters confirmed the next step in restructuring Redefine International is converting to a UK-REIT and internalisation of its management, and it is well advanced in this regard.

“The economic outlook for the year ahead is increasingly positive and we firmly believe that, with an internalised management and industry benchmarked REIT structure, Redefine International is well positioned to deliver strong returns to shareholders,” says Watters.

He adds the benefits of a larger free float and improved liquidity should allow Redefine International to be admitted to the relevant FTSE and EPRA indices in future.

During the year Redefine International completed successful capital raisings totalling £144.3 million and its market capitalisation reached £500 million for the first time. It reported an adjusted Net Asset Value per share increased by 6.2% to 38.66 pence and a notably reduced pro-forma loan-to-value ratio of 56.8%, from 81.7% for the prior year.

The portfolio occupancy levels improved to 97.3% from 95.9% at its 2013 half-year.

During the year, the Fund acquired three high quality German shopping centres with a combined market value of €189.0 million. After year end, Redefine International announced it had agreed to acquire Weston Favell Shopping Centre for £84.0 million at an accretive 7.2% net initial yield.

Watters explains the company’s positive results also reflect an encouraging, albeit gradual, improvement in the UK and European property markets which are showing signs of improving investor and occupier sentiments. Revealing a stronger economic outlook and more positive investment market conditions, property valuations generally stabilised or rose.

However, he notes uncertainty around commodity markets impacted the Australian Dollar which declined 17.2% against Pound Sterling for the six months to 31 August 2013 which affected the return on the Cromwell investment and reduced earnings by approximately 0.05 pence.

South African company Redefine Properties owns about 48% of Redefine Properties International, which in turn owns 65% of Redefine International. Following Monday’s inward listing, Redefine Properties will own about 34% of the overall Redefine International group.