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Redefine's net arrears improve despite tough conditions

4 Nov 2016

More of Redefine Properties' tenants paid their rents on time, despite the tough economic conditions.

Net arrears improved to R39.8m for the year to end-August, representing 6.3% of gross monthly rental, down from 8.3% in 2015, the company said in its results statement on Thursday, 3 November.

Redefine Properties has given investors the option of receiving a 44.3c cash dividend or the equivalent in new shares.

This takes the real estate investment trust's (Reit's) total dividend for the year to end-August to 86c, a 7.5% growth on the previous year's 80c.

Redefine's market capitalisation of R58bn makes it the third-largest constituent of the JSE's Reit index, behind Growthpoint, which weighs in at R72bn, and Intu, at R60bn.

Total revenue was flat at R6.65bn and aftertax profit declined 18% to R4.61bn, the company said on Thursday.

Redefine sold 15 government-tenanted offices worth about R1.3bn to Delta Property Fund in exchange for 162-million shares.

It intends to sell its remaining government-tenanted buildings on a deal-by-deal basis, it said in its results statement.

While exiting the government-building market, Redefine is moving into student accommodation.

It acquired 51% of Respublica Student Living for R438.6m, and is converting its office complexes Yale Village in Parktown and Hatfield Square into student residencies.

Revenue from its investments, which include a 30.1% stake in London- and Johannesburg-listed Redefine International, contributed 1.5% of the group's total, down from 5.2% in 2015.

Redefine said its vacancy rate improved to 4.9% from the previous year's 5.4%. Tenants paid on average 3.3% higher rentals, and its retention rate was a "pleasing" 92%.

The geographic spread of Redefine's property portfolio is 65.6% in Gauteng, 8% in KwaZulu-Natal and 26.4% in the rest of SA.

Industrial properties make up 42.9% of its portfolio, offices 28.5%, retail 28% and specialist properties 0.6%.

Source: BDpro

Source: I-Net Bridge

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