Redefine International retains its worth
Redefine International CEO Mike Watters says these results stems from a solid performance from all business structures of the company, its restructuring and conversion to a UK-REIT as well as favourable exchange rates for investors in South Africa.
RAND hedge property stock, Redefine International has remained attractively valued as the fund declared 34% rand-based growth in distributable earnings for the six months ending February based on current exchange rates.
Redefine International is a UK-REIT that has listed primarily at the London Stock Exchange and also at the Johannesburg Stock Exchange.
This performance reported by Redefine on Wednesday, is the company's first set of results as a UK-REIT and will see its half-year distribution growing from 20,58 cents per a share in 2013 to 27,6 cents per share.
This follows Redefine International in London reporting 5.1 percent growth in distributions.
According to Mike Watters, Chief Executive at Redefine International, these results stems from a solid performance from all business structures of the company, its successful restructuring and conversion to a UK-REIT as well as favourable exchange rates for investors in South Africa.
"Redefine International has delivered on our restructuring strategy for our investors started 18 years ago. This shows in our numbers, our heightened market position as well as in our strengthened board and international management. We have improved the overall quality of the portfolio and its income generational potential. Our increased market capitalization at nearly R13 billion, lower gearing levels and improved access to lower-cost funding all ensure that Redefine International is well placed prepared for future growth and support sustainable and growing returns for our investors," said Watters.
The company, during its half-year placed 115.1 million shares to raise 54.7 -million pounds and strengthened its balance sheet with pro-forma group loan-to-value reduced to 53.0% from 60.4% at the start of e period, and an on-going programme of early debt extensions secured.
The results have been the enhancement of the company's liquidity and its admission into the FTSE and EPRA/NAREIT indices. Redefine International is now on the brink of FTSE 250 admissions, a move which will further enhance its growing recognition as a significant mid-cap REIT.
In December last year Redefine international concluded its financial benefit for its internal management. The company says it will not stop to give support to such initiatives and to support good results from investors which are cost efficient i structure.
The company is well represented in a number of countries internationally and boasts an international diverse investment portfolio in real estate assets in retail, office, industrial and hotel sectors in the UK and in European countries like Switzerland, Germany, Netherlands and the Channel islands and in Australia.
Redefine has disposed properties worth 29.4 million pounds after taking advantage of its strength of its investment markets' strength at an average premium to book value of 23.8% and the proceeds will be used to purchase new assets in line with the company's international investment strategies. The company has acquired the sale of Weston Favell Shopping Centre for 84.0-million pounds and also completed the acquisition of Earls Court Holiday Inn Express with its remaining 40% for 6.3-million pounds.
The 2013 modest recovery in the office sector in the second half saw a sudden big demand for space at the highest level never seen since 2008. This helped nudge portfolio levels for up to 98.4 %. Redefine International's hotel portfolio division produced upbeat performance with strong like-for-like improvement in all its operational aspects, this before the company's operating budgets.
Meanwhile, the company's UK retail portfolio has seen increase of 34.6% in its assets and now includes seven wholly-owned shopping centres after its attest acquisitions.
"Improving the attractiveness of our centres for retailers and customers alike is our continued focus for this portfolio," said Watters.
Although Redefine International's European portfolio produced steady performance with high occupancy levels of 97.7%, its contribution to performance was hindered by a weaker Euro against Sterling foreign exchange movements. The strength of the UK investment market was shown in very good evaluations all over the UK business sectors. The European valuations remain in large parts stable.
"While our approach to acquisitions remains cautious, we are seeing some attractive off-market opportunities where we can do deals which are accretive to earnings or create value. We also targeted growth for our UK hotel portfolio as an effective way of increasing exposure to assets that are expected to outperform over the medium term. There are sell opportunities to acquire good quality assets producing relatively high income results in Europe. Our focus is on large assets in established local investment markets," said Watters when commenting about the imbalance between investment demand and good quality investment opportunities, especially in the UK.
Meanwhile Australian-based ASX-listed Cromwell Property Group produced good results with a period-on-period increase of 6.9% per security in in distributions but was thwarted by AU$ currency weakness against Sterling.
