SAREIT

Redefine lifts full year distribution per share by 4%

Johannesburg, South Africa – 04 November 2019: Listed real estate investment trust (REIT) Redefine Properties (JSE: RDF) has lifted its full year distributable income by 4% to 101 cents per share for the year ended 31 August 2019, with total group assets exceeding R100 billion for the first time. It is also the first time that full year distribution per share has breached the R1 level.

Redefine continues to benefit from a well-diversified portfolio and expansive geographic footprint, with the contribution from international property investments rising to 26.8% this financial year from 24.0% of distributable income last year.

The company, which manages a diversified property asset platform of local and international investments, expanded property assets under management to R95.4 billion from R91.3 billion during the previous year, while international real estate investments now make up 23.7% of the portfolio, from 20.7% before.

Redefine expects property fundamentals to remain weak over the medium term, with risk events like load shedding adding to the uncertainty.

“Interesting and volatile times are here to stay, and we need to make the most of the resultant opportunities. We are living in a world of costly capital and Redefine is therefore focusing on reducing balance sheet risk while still delivering sustainable quality earnings,” says Redefine Chief Executive Officer Andrew Konig.

During the year, Redefine managed to improve total tenant retention to 93.3% from 90.4% in 2018, while its active portfolio occupancy was maintained at 94.9%.

According to Konig, the focus for 2020 will be on asset quality, offshore expansion through development activity – notably through expanding the group’s European Logistics Platform – while taking action to restore the value of under-performing assets.

“We have to still grow where we see opportunities and not halt investment. However, we need to be more discerning and selective with our capital allocation and pro-actively seek out recycling opportunities for our non-core assets,” he says.

In a move to build a sustainable capital structure, Redefine has introduced a dividend pay-out policy to add another source of funding, which aligns to international REIT best practice and is pitched at a level that poses no tax leakage.

With a 6-month dividend of 48.1 cents a share being declared, the pay-out policy amounts to 93% of distributable income, which is a retention of around R200 million in cash to fund operational capital expenditure.

“This goes to the heart of sustainability as there is no distress on the business and the cash will fund capital expenditure to maintain operations, giving us an efficient additional source of funding, while also preventing potential tax leakage which could occur in the hands of shareholders if this amount was rather declared as part of the dividend and re-invested as equity,” explains Redefine Financial Director Leon Kok.

During the year, R6.9 billion was deployed into property assets, with local development activity totalling R2.4 billion. Offshore expansion totalled R4.3 billion, with R3.6 billion invested in Poland. At the same time, 17 properties with gross leasable area of 160 076sqm, which no longer served Redefine’s investment criteria, were disposed of to various buyers for an aggregate consideration of R1.0 billion, at an average yield of 8.2%.

According to Kok, the average cost of debt is now 5.8% from 6.3% a year ago, while interest rates are hedged on 87.3% (FY18: 81.2%) of total borrowings for an average period of 2.9 years.

Environmental impact remains a key theme, and during the year carbon emissions savings from Redefine’s solar installations equated to taking around 6,300 passenger cars off the road.

Despite the challenging trading environment, Redefine expects to deliver distributable income per share similar to that of 2019 for the 2020 financial year, and anticipates the pay-out policy to be maintained at a similar level.

While Redefine’s legendary founder Marc Wainer retired in August, Redefine has also zeroed in on improving board independence, with the appointment of Daisy Naidoo as an independent non-executive director adding to its diversity and skills base. 50% of the board is now female and 88% of the non-executive directors are independent.

“We are living our values to protect and grow our reputation in pursuit of living our purpose to create and manage spaces in a way that changes lives. We continue to place people at heart of everything we do, which will stand us in good stead when the cycle does turn,” concludes Konig.

Representing SA at the African Spelling Bee

A young learner from Liwa Primary School in Nyanga, one of Cape Town’s townships with a troubling past and few resources today, is showing the world that a person’s background doesn’t define their future.

Unamandla Mqaleni represented her country, school and community at the African Spelling Bee in Uganda this week where 18 countries and 108 spelling champions competed.

Mentor and teacher Andrew Gumindoga accompanied her to the competition and describes her performance as extraordinary. Rising above the difficult circumstances in her community, Unamandla competed with excellence and made it all the way through to the competition’s second round.

The day after she returned from the competition, Mr Gumindoga overheard her telling her fellow learners at Liwa Primary School, that their background doesn’t determine their ability and if they always work hard, they can do it.

Learner and teacher ascribe her success in large part to the Growsmart literacy competition – both were part of the team that won the prestigious Growsmart title in the Western Cape province in 2018. Liwa Primary has been participating in the Growsmart educational programme since Growsmart’s inception a decade ago.

Growsmart is a keenly-contested annual competition, was started and funded by Growthpoint Properties and fully supported by the Western Cape Education Department. It helps the learners and schools that need it most to boost Literacy, Story writing, Mathematics, Science and Debating in, and takes place at a level where it can have the biggest impact, in Grades 4, 5 and 6.

It has grown to include the above-mentioned competitions and as of next year, intends to add Entrepreneurship to the Western Cape competition offerings. Two years ago, Growsmart expanded into the Eastern Cape and next year, the competition intends to launch in Limpopo.

It is no secret that South African schools continue to face major challenges in Literacy, Mathematics and Science. The size of this massive challenge is clear in the alarming statistics, which place South Africa troublingly low on national and international benchmarks in all three areas.

Since inception it has more than doubled its reach from 80 to 160 schools in the Western Cape and the Growsmart newspapers have been distributed to over 70,000 children.

Mr Gumindoga explains that while he put Unamandla through her spelling paces in preparation for the continental spelling battle, Growsmart had already ensured that she was very well equipped. “In fact, a spelling bee covers only one of the three levels of literacy training emphasised in Growsmart, which includes spelling, defining and using a word correctly,’ says Mr Gumindoga. “This prepared Unamandla well and has created and important stepping stone for her. She is also very talented and hardworking. Unamandla was exceptionally brave. She presented with such grace. We are incredibly proud of her.”

Growthpoint Properties’ regional general manager Jewel Harris explains that the Growsmart competition is designed to boost their school performance, but also to change lives.

“Growsmart helps children gain exposure on bigger platforms and really launches them to greater things. It is a platform to excel. This is exactly what Unamandla has done, and we congratulate her on all her hard work and this wonderful achievement.”

Jewel Harris, Growthpoint Properties’ regional general manager

Growsmart was approached to enter an alumni into the 4th African National Spelling Bee, and facilitated sponsorship for Unamandla and Mr Gumindoga to attend along with young spelling champs from counties including Benin, Botswana, Ethiopia, Gambia, Ghana, Kenya, Lesotho, Liberia, Malawi, Nigeria, Rwanda, Sierra Leon, South Africa, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe.

Mr Gumindoga says, “I want to thank you guys for the opportunity, we salute you guys.” He also learned for the trip, and notes with interest how many of the young competitors would ask judges for the origin of a word before trying to spell it. “English is made up of words from many other languages. Knowing a few basic spelling rules from Latin, German, Greek and other common source languages goes a big way in helping youngsters to spell. As educators and teachers in South Africa it is important for us to ensure our learners are literate in English. Even at the African Spelling Bee, this was the common language of communication between the different nations.”

Based on this experience, Growsmart is exploring way to incorporate an opportunity to compete in the African Spelling Bee for the top spellers in its programme in the future.

“This would provide yet another Growsmart space to inspire, boost confidence and create positive experiences that will subsequently translate into courageous and passionate future leaders,” says Harris.

Redefine rakes in accolades at marketing awards

JSE listed diversified real estate investment trust (REIT) Redefine Properties has announced that its recently renovated Centurion Mall and its newest retail property Kyalami Corner, both, won Gold at the Footprint Marketing Awards 2019. Centurion Mall’s efforts in digital marketing and the latter’s sales promotions and events won the accolades for Redefine.

Redefine also took home a Silver and eight Bronze medals across categories like Community Relations, Public Relations and Category Integration amongst others ending the evening with a rich haul of 11 medals.

An initiative of the South African Council of Shopping Centres (SACSC), the awards recognise exceptional shopping centre marketing, innovation, creative achievements, with economic success and excellent customer service. This year the awards were held at the Cape Town International Convention Centre.

All Gold SACSC Footprint Marketing Awards are automatically entered into the International Council of Shopping Centres’ VIVA Awards.

Our properties are more than just shopping centres; they are avenues for meaningful conversations with the communities. We remain committed to leveraging the spaces we manage to change the lives and the future of the people and communities around them. The awards demonstrate our continued passion to find ways to engage and build audiences for our retail properties

Marijke Coetzee, Head of Marketing and Communications, Redefine Properties.

Centurion Mall, which took Gold for its chatbot, recently underwent a comprehensive R1.06 billion refurbishment and at a gross lettable area (GLA) of 130 000 sqm, is Redefine’s biggest retail property. In line with trends of offering experiences over shopping trips, the Mall’s new open air design concept, comfortable interiors, additional retailers and revamped movie theatres are amongst the many changes that are contributing to the growing number of loyal fans.

The chatbot is an automated online assistant which helps consumers resolve queries on the centre’s website. Centurion Mall is the first mall to implement this in line with future trends.

The trendy Kyalami Corner shopping centre, which opened in April 2017, perfectly responds to the retail, lifestyle and social requirements and aspirations of the Kyalami neighbourhood and surrounds. The elegant, energy-efficient design also complements the natural, equestrian environment and character of the area.

The centre took Gold for its initiative “Where we make traffic fun.” The roadworks in the vicinity of the centre caused heavy delays and slow moving traffic. The centre decided to make it fun for motorists sitting in traffic and handed out gifts on a weekly basis to motorists while entertaining them in traffic. Motorists were encouraged to post their gifts and pictures on social media and stand a chance to win additional vouchers to redeem at the various stores at the centre.

Liberty Two Degrees’ co- owned Melomed Hospital offers the leading medical support to Zululand community

L2D and Liberty’s investment in Melomed offers further development opportunity in John Ross Eco Junction Estate

Situated on the outskirts of Richards Bay at the John Ross Eco Junction, Melomed Hospital was initially opened in January 2018, offering a 200-bed facility with state-of-the-art equipment that caters to a large underserviced community of Zululand. After obtaining the licence and being fully equipped with a catheterisation laboratory (cath lab) to add to the range of multidisciplinary services, the hospital was officially launched on the 8th of October 2019. The hospital offers an improved healthcare landscape in KZN through the inclusion of accessible health and life-saving services.

The recently installed cath lab has enabled the first successful heart bypass operation at Melomed and ensures that patients requiring specialised catheterisation and cardiac treatment no longer have to travel several hundred kilometres. This development makes Melomed the leading medical facility in the rural area of Richards Bay and a centre of excellence.

Our investments have always focused on bringing humanity to business and business to humanity. We are pleased to be part of making a real and meaningful difference to people’s lives as well as the community as a whole.

Josè Snyders, Liberty Two Degrees (L2D) Financial Director

The hospital is co-owned by Liberty Group Limited (Liberty), L2D and Tuscaloosa and is leased to Melomed on a long-term lease. Melomed occupies 13,809m² in gross lettable area (GLA) of the John Ross Eco Junction Estate which is a fully secured eco-friendly business estate located at the junction of the N2 (linking Durban and Pongola) and the John Ross Highway (connecting Richards Bay and Empangeni). John Ross Eco Junction is co-owned by L2D and Liberty.

The John Ross Eco Junction provides opportunities for developments that cater to the specific needs and requirements of prospective tenants and importantly the community, Melomed Hospital was one such development.

Roy Lighton, Development Executive at L2D

Commenting on the diversified capabilities of the team and its commitment to quality developments, Snyders concludes

I am proud of the team, having delivered another quality development. Through sheer hard work, commitment and determination, the Melomed development is one the region of KwaZulu-Natal can take ownership of and be proud of. We look forward to creating many more meaningful and experiential spaces that serve the community.

Josè Snyders, Liberty Two Degrees (L2D) Financial Director

Ulana van Biljon is named the Top Woman in Property

JOHANNESBURG – After being named as a finalist in the 16th annual Standard Bank Top Women Awards by Topco Media and Communications, Ulana van Biljon, Chief Operating Officer at Emira Property Fund, was honoured with the top award in the property category.

The Standard Bank Top Women Awards recognises those whose efforts have been uplifting women in business and society in general over the past 25 years of democracy and who look set to continue to do so for the next 25 years. Van Biljon has shown a continuous commitment to building an inclusive economy and changing the face of business in South Africa.

Ulana is a pioneer for women in the property sector and was one of the first female executive directors to sit on a board of a JSE-listed real estate investment trust (REIT). Today, Ulana remains one of only a small handful of women to have earned a seat at the listed property leadership table.

As Chief Operating Officer of Emira Property Fund, Ulana applies her 23-plus years of experience in the listed and unlisted property sector to execute and implement the company’s strategy while making sure its operational results are achieved.

Known as an accomplished executive, who has contributed much to SA’s business landscape, Ulana is sought out as a mentor by women who are new to leadership roles, and the COO role specifically, both within the property sector and beyond. While extremely modest about being a role model for other women in the property sector, female colleagues and associates who have worked alongside her often credit Ulana as the inspiration behind their own success, and praise both her proficiency and empathy.

Known as an accomplished executive, who has contributed much to SA’s business landscape, Ulana is sought out as a mentor by women who are new to leadership roles, and the COO role specifically, both within the property sector and beyond. While extremely modest about being a role model for other women in the property sector, female colleagues and associates who have worked alongside her often credit Ulana as the inspiration behind their own success, and praise both her proficiency and empathy.

Ralf Fletcher, CEO of Topco Media and Communications

Being identified as an individual who is effecting meaningful change at South Africa’s premier gender empowerment event gives winners a platform to promote their achievements and become a source of inspiration for sector peers. With her many accomplishments, Van Biljon will certainly do the same.

I am humbled by this award. It is pleasing to see more directorships in the property sector being held by women, and I hope to see this increase even more in future. More inclusive and diverse boards and executive teams result in better businesses that are more relevant and sustainable.

Ulana van Biljon, Chief Operating Officer at Emira Property Fund

Emira is a medium-cap diversified JSE-listed SA REIT that is invested in a quality, balanced portfolio of office, retail, industrial and residential properties. At 30 June 2019, its directly held assets comprised 80 properties valued at R10.9bn. It invests indirectly in 22 lower LSM shopping centres valued at

R1.15bn through its exposure to Enyuka Property Fund. It also has a 34.9% holding in JSE AltX-listed Transcend Residential Property Fund. Emira is internationally diversified through its investment in ASX-listed Growthpoint Properties Australia (GOZ) valued at R759.7m, and its equity investments in nine grocery-anchored open-air convenience shopping centres with a combined value of USD75.9m through its USA subsidiary.

Redefine’s Innovation Challenge shines

JSE-listed diversified real estate investment trust Redefine Properties’ Innovation Challenge was an honouree in the CSI category at the recently concluded International Council of Shopping Centers’ Solal Marketing Awards 2019 in London. The awards showcase the very best of retail marketing across Europe and South Africa, recognising best practice, and rewarding the most effective campaigns in the industry.

The Innovation Challenge which was launched at Maponya Mall in Soweto was the only South African campaign honoured this year. The Solal Awards are recognised as a benchmark of quality throughout the industry and in 2019 welcomed 164 entries from 22 different countries.

Launched in October 2018, the Innovation Challenge is a national competition developed by Redefine Properties inviting the general public to submit innovative ideas relevant to the property industry. Ideas with potential to revolutionise either retail, commercial or industrial space, enhance business opportunities and customer experiences, uplift communities and their integration in respect of any of the spaces and that embraced technology were considered.

In its first year, the competition attracted over 1250 entries from across the country.

In an ever-changing business environment further accelerated by the advent of the 4th Industrial Revolution, we realise that, in order to remain relevant, we need to embrace change. The Innovation Challenge helps us to identify young individuals who have the ideas that will future-proof our malls and to uplift and support them to become our future tenants, suppliers or even employees.

Marijke Coetzee, Head of Marketing and Communications, Redefine Properties

“We are looking for ideas which have the ability to fundamentally improve people’s lives.”

Cash4Trash, an income generating recycling concept powered by vending machines won the first prize at the Innovation Challenge. Entrepreneur Mary-Ann Mandishona who floated the idea won R1 million in prize money for her efforts and an opportunity to negotiate start-up support to the value of up to R9 million in the form of either monetary support, education, commercial space or concept acquisition.

The Innovation Challenge at the core is an endeavour to build a bridge to the communities that surround us. It encourages engagement, helps our efforts to manage spaces in a way that changes lives and most importantly provides a platform to boost entrepreneurship.

Marijke Coetzee, Head of Marketing and Communications, Redefine Properties

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