JSE-listed Redefine Properties says it is well-positioned for sustained value creation and growth opportunities after the company’s takeover of Poland’s largest retail landlord, EPP, and the JSE delisting on March 8 of the acquisition.
Redefine bagged about R7.2bn in additional equity, adding about R19.7bn of total assets to its balance sheet, which equates to 19.8% of shares in issue for Redefine.
Speaking during the pre-close briefing for the half-year ending February 28, CEO Andrew König said the R26.2bn EPP portfolio will support Redefine’s medium-term growth outlook. The business will be fully integrated during the second half of 2022.
“Redefine is now primed for growth after we used the crisis to reset and refine every aspect of what we do. We have exited multiple geographies, optimised what we have and positioned every asset for the best possible sustainable capital and income growth prospects,” König said.
The delisting and takeover of EPP were first proposed in November 2021 with Redefine offering a share-for-share swap to acquire the remaining shares it did not already own.
Redefine said it wanted to be able to implement an EPP restructuring, which would solve EPP’s liquidity challenges, with Redefine becoming the sole listed point of entry into EPP.
The company’s pipeline in Poland, which includes two projects totalling 96,917m2, continues to grow with numerous logistics developments planned.
In the past six months, Redefine sold off its last remaining student accommodation in Australia and is now focused on the disposal of any remaining unproductive domestic asset.
“I don’t think there will be fireworks from the SA economy for some time, and so we are more focused on the variables under our control,” König said.
SA’s economic conditions remain a challenge, especially for the office sector in which vacancies rose from 14% to 16%, Redefine said. With supply outstripping demand, COO Leon Kok does not see much improvement in the office space environment.
However, the retail sector is showing signs of recovery, with turnover from retail tenants now at about 105% of pre-Covid-19 levels, largely driven by homeware and essential services.
Kok said the industrial portfolio has remained defensive, with demand for logistics solutions driven by the growth in retail.
Redefine’s half-year results to February 28 2022 will be released on May 16.
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