Redefine ends FY2025 in stronger shape as confidence lifts and greylisting exit bolsters outlook
Redefine Properties Limited [JSE: RDF] has reported a solid set of results for the financial year ended 31 August 2025, marking another step in the group’s multi-year transformation journey. The diversified property group delivered a 7.8% increase in distributable income, lifted its operating profit margin by 1.1 percentage points to 76.2%, and reduced its loan-to-value (LTV) ratio to 40.6%, firmly within its target range.
Chief Executive Officer Andrew König says the results confirm that “Redefine ends the financial year in far better shape than we started it, with all key metrics trending positively.”
“We’ve seen property asset values lift by R1.9 billion in South Africa and hold steady in Poland. Our LTV ratio is also back within range. Importantly, we achieved an operating profit margin improvement against a backdrop of only moderate revenue growth, which is testament to the efficiency gains coming through the business,” König explains.
Confidence returning as SA exits the FATF greylist
König says early signs of rising business and consumer confidence are evident in leasing activity and investor sentiment, supported by the country’s recent removal from the FATF greylist and prospects of a sovereign credit rating upgrade.
“The finalisation of South Africa’s greylisting exit is significant – it will translate into lower costs of capital, attract more foreign investment flows, and further deepen domestic liquidity. We’re already seeing the bond market pricing that in,” he notes.
“Add to that the Reserve Bank’s firm inflation targeting stance and the possibility of a rating uplift next year, and you have the makings of a tangible, rising optimism. Those tailwinds, coupled with Redefine’s strengthened balance sheet, position us well to capture growth as sentiment improves.”
CFO Ntobeko Nyawo agrees that the broader macro turn is set to benefit well-capitalised corporates.
“Our balance sheet is already in a strong position; with an interest-cover ratio of 2.2 times, 83% of debt hedged, and a weighted average cost of debt reduced to 7%. That gives us flexibility to fund growth while maintaining liquidity prudence.”
Portfolio quality and diversification underpin performance
COO Leon Kok says Redefine’s diversified portfolio again proved its resilience, with retail and industrial strength offsetting a still-muted office sector.
“Our portfolio mix really paid off this year. Retail and industrial delivered very pleasing results, offsetting the structural headwinds still facing offices,” Kok explains.
“Operating fundamentals are stabilising, with occupancies up, renewal reversions improving, and asset values across all three sectors showing year-on-year gains. Even office valuations have turned positive on a total-basis view.”
Retail renewal reversions moved into positive territory (1%), and trading densities improved, with tenants’ rental-to-turnover ratios at 7.4%, reflecting sustainable affordability. Industrial vacancies remain negligible at 2.7%, supported by buoyant logistics and warehousing demand.
“Industrial continues to perform exceptionally well,” Kok says. “We’re seeing strong demand, particularly for logistics and warehousing space close to major transport corridors, where constrained supply is pushing rentals higher. Strategically, it’s a sector we’re keen to expand on, especially where we have developable land.”
On the retail front, Kok notes that tenant health remains solid and that the grocer anchors have supported the turnover growth. “We’ve seen marked improvement in their trading performance, which bodes well for the overall retail environment.”
In the office sector, occupancy is stable at 87%, and leasing volumes (at 262,000 m² signed) underscore renewed deal activity.
“Business confidence drives office demand, and the deal activity we’re seeing suggests sentiment is stabilising. Certain nodes, particularly in the Western Cape, have performed exceptionally well as provincial stability and governance continuity have translated into the lowest vacancy levels in the country,” he adds.
“Looking ahead, a swift, peaceful and conclusive local election outcome would be a meaningful catalyst for offices, particularly in Gauteng, by restoring certainty around municipal service delivery and enabling businesses to commit to space.”
Poland adds growth momentum
Redefine’s Polish platform (EPP), whose retail platform accounts for roughly 28% of group assets, continued to deliver a strong, stable performance. EPP’s core retail portfolio maintained a 99.4% occupancy rate, while European Logistics Investment’s (ELI) logistics operations doubled distributable income contributions to R214 million thanks to rising occupancies (up to 96.8%) and higher market rentals.
“Poland enjoys GDP growth roughly three times that of South Africa and very low unemployment. That’s created a robust consumer market that continues to support our retail and logistics assets,” says König.
“The cost reduction plan implemented at EPP has strengthened operating margins, while self-storage developments under way will double our footprint in that segment. The stability and growth from Poland demonstrate why geographic diversification remains an essential buffer in our group asset portfolio.”
Balance-sheet strength and disciplined capital management
Nyawo highlights that Redefine’s deleveraging and liquidity initiatives are yielding results.
“We’ve improved our LTV ratio from 42.3% to 40.6%, reduced debt margins in South Africa by 20 basis points, and maintained a well-laddered maturity profile with no near-term refinancing pressure. Liquidity of R6.7 billion gives us room to manoeuvre,” he says.
The group disposed of R1.1 billion of non-core assets during the period while reinvesting a similar amount in upgrades and energy-efficiency projects. Installed solar capacity rose 35% to 58.4 MWp, with a further 8.4 MWp in progress – a 50% increase since 2024.
“Capital recycling remains core to our strategy,” adds Kok. “We’re continuously repositioning and improving the portfolio rather than chasing new developments. Our active asset management focus keeps our assets relevant and enhances income resilience.”
Sustainability and long-term value creation
“Nine of our buildings are now net-zero, and both our South African and Polish portfolios achieved strong GRESB scores of 81, reflecting our consistent ESG performance. For us, sustainability and operational resilience go hand-in-hand – they underpin portfolio quality and investor confidence,” König says.
Outlook: disciplined optimism
König notes that while Redefine’s share price has delivered a 310% total shareholder return over five years, this recovery reflects more than market momentum – it underscores the success of a focused strategic reset.
“When COVID hit, our share price fell sharply, so part of that growth is off a low base. But what really matters is how fundamentally the business has transformed since then,” he says. “Five years ago, our strategy was scattered across multiple geographies and asset classes. Today, we’re focused, disciplined, and in control of every asset we manage. That focus has changed how Redefine looks and feels, and it shows in our performance.”
Looking ahead, Redefine expects distributable-income-per-share growth of 4 to 6% in FY2026.
“We remain committed to disciplined capital allocation for sustainable growth – improving portfolio quality, simplifying our international joint ventures, and maintaining a strong balance sheet,” says König.
“Moderating inflation and improving liquidity all point to a more constructive operating environment. If we maintain this trajectory, we’ll continue delivering inflation-beating capital and income growth for shareholders.”
