Redefine Properties is optimistic about the performance of its portfolio in South Africa and Poland and has forecast distributable income per share to range between 50-53 cents in financial 2025, CEO Andrew König said yesterday.
“We are aware of the geopolitical risks that could disrupt inflation trends and monetary easing. Therefore, we are committed to improving our business performance by enhancing efficiency, restructuring debt, and further simplifying our asset base,” König said.
He said at the release of annual results to August 31 that they were transitioning from merely identifying opportunities, to actively capitalising on them, building on the progress made over the previous year and focusing on the opportunities that were identified in the 2024 financial year.
Redefine’s share price nudged up 0.4% to R4.95 on the JSE yesterday morning after the release of the results, bringing the price gain over 12 months to 39%.
König said that much of the recent improvement in share price was likely due to macroeconomic factors, such as increased confidence and the downward shift in interest rates.
“Our strategy emphasises organic growth, and as our share price approaches a level where the forward yield aligns with our debt pricing, we can reassess the overall debt-equity balance,” he said.
König said a dividend reinvestment plan would also be offered in 2025, with the aim to conserve cash and give investors an opportunity to reinvest in Redefine. The results included a second-half payout of 22.2 cents, bringing the 2024 payout ratio to 85%, within the dividend payout target of between 80-90%.
He said the year marked a crucial turning point for the sector due to easing interest rates, increasing confidence, lower political risk and a stable electricity supply,.
Group initiatives of the past year included simplifying the asset base, optimising capital by restructuring R27.7 billion in local debt, talent development and expanding sustainability initiatives.
Redefine’s chief operating officer Leon Kok said during the year occupancy rates increased to 93.2%, up from 93% in the 2023 financial year. Tenant retention was nearing 90%.
Redefine’s retail portfolio continued to perform well, with occupancy rates rising to 95% from 93.6%. Further occupancy improvements were anticipated, he said.
Occupancy in the office portfolio continued to benefit from Redefine's exposure to P- and A-grade assets.
König said the limited demand in the office market was increasingly focused on higher-quality properties, where Redefine held a more competitive advantage.
Redefine’s industrial portfolio remained resilient. “We have access to developable land in prime locations near key transport hubs, which should create a strong pipeline of leasing opportunities,” said Kok.
During the past year Redefine added 8MW of solar capacity, with an additional 18MW underway. Once completed, this would bring the total capacity to over 60MW.
In Poland, EPP’s portfolio reported an occupancy of 99.1%, up from 98.4% in 2023. Likewise, the logistics sector was performing well, supported by a market that favours infrastructure expansion, particularly in Western Europe and Germany.
ELI, Redefine’s Polish logistics platform, had an occupancy of 93.4%. The EPP portfolio delivered net property income of R1.3bn, an improvement on last year’s R1.2bn,largely driven by rental indexation and increased occupancy levels.
“We have acknowledged concerns regarding the complexity and high leverage of our joint ventures. To address these issues, we have developed a comprehensive plan and programme that will be implemented over time,” he said.
BUSINESS REPORT