Redefine International upbeat after swift rise

Property group Redefine International — whose share price doubled over the past year to make it the JSE’s best-performing property share — said in an interim management statement on Friday it expects this year’s earnings “to be in line with management expectations”.

Redefine’s total return was 118% over last year against the listed property index’s 8.39% and all share index’s 21.43%.

Senior property fund manager at the Old Mutual Investment Group, Evan Robins, said Redefine could struggle to repeat last year’s performance but its randhedge status would help if the rand weakened against the dollar even more than it did last year.

“Redefine International had a phenomenal 2013 in terms of price performance. I think much of the good news and recovery is already in the price; it trades at a significant premium to net asset value compared to their UK and European peers. They were assisted by some market factors, becoming a real estate investment trust, listing in SA, and an American depositary receipt programme. It would be unrealistic to expect similar performance this year but they could still outperform if the rand weakens further,” Mr Robins said.

Redefine’s portfolio, valued at R17.7bn, spans Germany, parts of the UK and Australia.

Redefine International chairman Greg Clarke said in Friday’s statement: “With its income focused and diversified portfolio, this is an exciting time for the company.… Furthermore, there are continued signs of improved occupier demand, both in the retail and commercial sectors, although underlying rental growth may still take time to materialise.”

Speaking about the improvements realised during the period, Mr Clarke said portfolio occupancy rose to 97.6% at August 31 last year to 97.3% this year.

Redefine International completed the purchase of Weston Favell Shopping Centre, in Northampton, England, for a purchase price of £84m (about R1.3bn). Mr Clarke said Redefine also sold its residential site in Harrow, in the UK, recycling £13.77m (R246.26m) of capital.

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