Redefine accquires ‘hotspot’ portfolio

The company stated that this move was part of a strategy to improve the overall quality of its property portfolio. It will be focusing on large, prime high-grade investment properties, these properties would likely only have one tenant.

Redefine said the framework agreement between itself and Zenprop Property Holdings for the acquisition of a number of investment properties had been amended, to exclude certain properties subject to pre-emptive rights.

In withdrawing its cautionary, it said the agreement now included additional properties, and was for the acquisition of 14 high-quality office and industrial properties for an aggregate price of R1,8bn.

Separate agreements governing the terms of each of the acquisitions had been concluded. The properties are mostly commercial, with no retail assets.

"We announced this before. It’s taken forever to get through legal hurdles," Redefine CEO Marc Wainer said yesterday.

"We are buying mostly A-grade buildings in ‘hotspots’ like Sandton in Gauteng, KwaZulu-Natal and the Western Cape," he said. "This is one more deal in that regard."

The group said no independent valuation of the properties had been made, with the value attributed by the purchaser being equivalent to the purchase consideration.

"While it’s a welcome strategy to improve the quality of the portfolio, it comes with a trade-off of earnings dilution," Keillen Ndlovu, head of property funds at Stanlib, said.

"The next stage for Redefine to achieve a rerating — an improved rating compared to the South African listed property sector — is to pay out distributions consisting entirely of annuity/rental income.

"At the moment, Redefine distributions also consist of non-annuity income (such as) fees from deals. The market penalises Redefine for this (because) such earnings/distributions are not sustainable and present a higher income forecast risk relative to the sector."

Mr Ndlovu also said the acquisitions were modern buildings, but average valuations and rent s seemed high relative to the market.

Mr Wainer said the group had identified secure properties within the amended agreement, which took into account various cost-of-living rises such as electricity and toll roads. "No one is going to shoot the lights out in this market," he said.

Redefine is one of the largest listed property loan stock companies in SA, with a market capitalisation of R21,3bn at yesterday’s closing price of R7,92. It has a domestic portfolio of about 400 properties valued at about R19bn, and a R5,2bn portfolio, including foreign properties, through Redefine International and its subsidiaries.

  Comment on this Article

  Please login to post comments

Post to my facebook wall
Characters remaining

    Latest Property News
    • 19 Feb 2018
      Possibly one of the biggest sources of contention between landlords and tenants surrounds the rental deposit. “Most tenants rely on getting their rental deposits back when moving, so that they can use it to pay a deposit on their new home. Having it withheld or even having large amounts deducted can lead to a lot of distress,” explains Bruce Swain, CEO of Leapfrog Property Group.
    • 19 Feb 2018
      Situated approximately halfway between Johannesburg and Pretoria, Midrand was established in 1981 and forms part of the City of Johannesburg Metropolitan Municipality. It has become one of the major business hubs in the country with major pharmaceutical, textile, telecommunication and motoring giants situated within its boundaries.
    • 19 Feb 2018
      The PayProp Rental Index Annual Review of 2017 shows that the rental market suffered from much volatility during the year. It kicked off with rental growth spiking in January with weighted year-on-year growth (YoY) growth peaking at 8.3% before dropping to 6.34% in July, dipping down to less than 5% in November and then experiencing a slight uptick at 5.75% in December.
    • 19 Feb 2018
      While most homes in cluster complexes, estates and other gated communities come with at least one garage or carport, residents would often like additional permanent parking or storage areas for things like trailers, bikes, boats and caravans.
    • 16 Feb 2018
      Whether you own a property in a sectional title complex or are looking to invest in one, the financial standing of the body corporate is the single most important thing that can affect your investment or your buying decision.
    • 15 Feb 2018
      One positive consequence of the financial crash in 2008 was the rise in consumerism, especially in the property market, where buyers have steadily become more knowledgeable and more value conscious.
    • 15 Feb 2018
      While most homeowners will take the agent’s commission into consideration when they are trying to determine what the will get out from the sale of their property, many often forget to factor in the other costs involved in a home sale, says Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
    • 14 Feb 2018
      The forecast for the national rental market in 2018 remains a mixed bag of good news and bad news. Although rentals are expected to rise slowly as the challenges of home affordability and tighter lending criteria tighten their grip, it’s a double-edged sword as the market also will come under increasing pressure from factors like declining disposable income levels.
    Subscribe to the MyProperty Newsletter

    Last Name  
    Email Address  
    Email Frequency
    Share this Page

    For Sale Property
    Rental Property
    More Options
    Connect with us