REDEFINE Properties’ management believes the group is well ;positioned for growth amid anecdotal evidence of improving levels of confidence in the property sector.
The group’s asset platform, valued at R100.4 billion, comprises assets in the retail, commercial, logistics and industrial property sectors in South Africa and Poland.
Over the last five years, Redefine has transformed its asset platform by reducing exposure to multiple risk universes through non-core asset disposals and reallocating capital to growth sectors and geographies like Central and Eastern Europe, where there is the prospect of emerging market growth at a lower risk premium.
CEO Andrew König said at a Capital Markets Day on Tuesday that their strategy of sectoral and geographic diversification was aimed at delivering stable returns by mitigating the cyclicality of sectors and reducing economic risks and vulnerabilities in the domestic environment, such as resource and infrastructure crises that impede growth in South Africa.
König said Redefine had adopted an “opt-for-the-upside” approach, meaning that the company embraced opportunities within the real estate sectors it operated in, even when faced with obstacles, rather than choosing to divest.
Redefine’s South African portfolio had benefited from an active asset management strategy to transform it to a defensive portfolio of high-quality assets that was well diversified, said COO Leon Kok. He said most operating metrics had stabilised and were positioned to deliver organic growth.
He said nationally the number of vacancies in the office sector had decreased for eight quarters running. Data from the SA Property Owners Association for the second quarter showed vacancies falling to 14.2%, 2.5% below the high point.
National asset manager for office, Scott Thorburn, said the demand for quality A- and P-grade assets, which comprise the majority of Redefine’s office portfolio, had bolstered the occupancy rate to 87.8% for the 2024 financial year.
Redefine was also seeing positive rental reversions in the retail space, indicating that the industry was about to enter a growth phase.
Redefine had made strides in sourcing efficient capital, as evidenced by the R15.6bn in green funding raised since 2022. This had transformed the group’s funding profile, with 35.3% of debt now linked to green finance.
Its earnings guidance of distributable Income per share at 48 cents to 52 cents for the 2024 financial year had been maintained.
BUSINESS REPORT