Redefine fosters strategic resilience, opts for the upside

Real estate investment trust (REIT) Redefine Properties (JSE:RDF) said today in its pre-close update for the year ending 31 August 2023 that the business has been stabilised, with the company’s South African and Polish portfolios demonstrating “remarkable operational resilience” across all sectors in the face of the challenging operating environment.

Redefine Alice Lane South Africa
Redefine Alice Lane South Africa

While market-shifting dynamics such as the aftershocks of the pandemic, elevated inflation, an energy crisis and higher funding costs remain on the company’s radar, the update noted that there is cause for optimism that the property cycle has bottomed and that 2024 will mark a notable turning point for the sector.

Real estate fundamentals are building positive momentum

Notably, the upward trajectory of inflation is tapering, with early signs of cooling-off, which brings with it more predictable interest rate expectations. Meanwhile, the government and business’s plan to remove obstacles to inclusive economic growth and job creation through priority interventions is expected to restore much-needed confidence.

Redefine Pasaż Grunwaldzki Wroclaw Poland
Redefine Pasaż Grunwaldzki Wroclaw Poland

“We are encouraged by the fact that real estate fundamentals are beginning to build positive momentum that is expected to translate to future upside potential,” says Redefine CEO Andrew König.

“This has provided us with a renewed sense of optimism. However, we know that risks like geopolitical tensions, elevated inflation, high interest rates, rising energy prices and ongoing load shedding require an unwavering commitment to fostering strategic resilience as we look to pursue growth and deliver sustainable value.”

As such, Redefine is ensuring that it:

  • Invests strategically in efficiency interventions to reduce reliance on municipal-supplied utilities
  • Optimises capital by diversifying funding sources to spread concentration risk
  • Improves operational efficiencies through disciplined cost management and by digitising processes to transform the tenant experience.
Redefine Warsaw Airport Vi Poland
Redefine Warsaw Airport Vi Poland

Signs of stability

Despite load shedding and related cost headwinds, Redefine reports that operating metrics across its South African portfolio are gradually improving and showing signs of stability. Demand for P- and A-grade office space in sought-after locations has strengthened, while the group’s industrial portfolio continues to be defensive and is performing well in a competitive landscape.

Considering the prevailing uncertainty around the energy outlook and associated risks to operational performance, Redefine remains focused on improving its energy efficiency and bolstering business resilience by investing in renewable energy in South Africa.

For instance, the group is participating in the City of Cape Town’s first electricity wheeling pilot project that is enabling commercial entities to sell electricity back to the City’s grid. Redefine is undertaking a 5.9MWp solar wheeling project on the roof of its Massmart Distribution Centre at its Brackengate 2 development.

Andrew König
Redefine CEO Andrew König

Tapping growth opportunities

As an example of its efforts to realise growth and upside for shareholders despite market uncertainty, Redefine is unlocking opportunities in the retail, logistics and self-storage market segments in Poland.

“We remain confident about the potential in the Polish market,” explains König. “Our exposure to Polish retail and logistics provides stability; recovery of the shopping centre performance in that market is well on track, with positive retail sales forecast for the next two years.”

The update noted that rental rates continue to rise in the logistics market segment, particularly in sought-after locations and buildings with modern technologies and ESG solutions.

“The self-storage market in Poland represents an emerging asset class with untapped potential,” says König. “Poland has significantly fewer facilities than other European markets and demand is underpinned by robust micro business needs, representing 48% of overall users, which is above the EU average of 29%.”

The group reported strong working capital generation, with reason to expect improvements in the near term based on projected collections, which supports a healthy and stable liquidity profile.

The company’s SA REIT loan-to-value (LTV) at the end of May 2023 increased to 42.3% (HY2023: 40.9%) on the back of a weaker Rand. Redefine expects the LTV to moderate towards its internally set medium-term target of 38% to 41% during 2024. DIPS is expected to be in line with guidance of between 48 cents and 52 cents for the year ended 31 August 2023.

The company’s closed period commences on Friday, 1 September 2023 until its annual results are released on Monday, 6 November 2023.


Redefine raises R1 billion green bond in line with its expanding pool of sustainable funding

Redefine Properties, one of South Africa’s leading real estate investment trusts (REITs), has issued another green bond as it leverages its sustainability journey.

Redefine will use the money raised to refinance eligible green assets across its property portfolio aligned to the group’s over-arching, long-term climate-resilient framework. The assets include highly rated green buildings that incorporate various initiatives to improve their energy and water efficiency.

Redefine’s third green bond was oversubscribed 1.9 times with R1.9 billion received in bids and resulted in an upsized allocation to ZAR1.0 billion across 3, 5 and 7 years at an auction on 21 August.

“Demand for the bond issuance was particularly high in the seven-year tenor, resulting in the allocation of ZAR425 million to that tranche, which bodes well for our long-term funding structure,” says Ntobeko Nyawo, Chief financial officer of Redefine. “South Africa’s debt capital market is experiencing a recovery in demand for high-quality commercial instruments with an ESG underpin.”

This green bond will further support the long-term decarbonisation of Redefine’s buildings, focusing primarily on reducing energy consumption through efficiency interventions, mutual collaboration with tenants and solar PV expansion.

“This latest green bond issue further improves our funding match between our assets and liabilities in our capital structure and reaffirms our commitment to placing ESG at the heart of what we do,” Nyawo says. “We believe this will continue to play a critical role in strengthening and solidifying our balance sheet.”

The capital raised will be deployed in refinancing qualifying buildings that have achieved a 4 Star or higher Green Building certification, a tool used to rate the environmental impact and sustainability-related performance of buildings, as defined by the Green Building Council South Africa.

The green bond aligns with Redefine’s sustainability goals to transform its properties into environmentally sustainable and resource-efficient assets.

The green bond also aligns with the International Capital Market Association’s green bond principles. It was listed on the JSE in the Sustainability Segment, a platform for companies to raise debt for green, social and sustainable initiatives.

Nyawo adds that Redefine will continue its strategic participation in SA’s deep and liquid debt capital market as it provides the opportunity to raise competitive funding to enable the group to achieve its mission as it aims to deliver the smartest and most sustainable spaces the world has ever known.

About Redefine Properties

Redefine is a Real Estate Investment Trust (REIT) with a sectoral and geographically diversified property asset platform. Redefine’s portfolio is predominately anchored in South Africa through directly held and managed retail, office and industrial properties, complemented by a strong presence in Poland’s retail and logistics property assets.

Redefine’s purpose is to create and manage spaces in a way that transforms lives, which requires more than a business-as-usual approach: it requires an integrated approach to making strategic choices that will sustain value creation for all stakeholders by putting people and purpose at the heart of what we do and focusing on what matters most by executing our strategic priorities.

Redefine is listed on the Johannesburg Stock Exchange (JSE). By volume, Redefine’s shares are among the most actively traded in the SA REIT sector. This makes it a highly liquid, single-entry point for investors to gain exposure to the South African and Polish real estate markets.

SA REITs show resilience amid adversity

South Africa’s listed property sector has demonstrated its resilience even in the current tough economic and high interest rate environment.

The sector’s fortunes look set to gradually improve in the medium to long term, based on forecasts that interest rate hiking has reached its peak and a predicted improvement in the availability of electricity, which will have a positive impact on economic growth.

Performance of the REIT sector improved to deliver a better-than-expected total return of 0.7% in 2Q 2023, although performance was flat for 1H 2023.

SA REIT Association Chairman and Growthpoint Properties SA Chief Executive Officer, Estienne de Klerk, says that he is optimistic about the resilience of the sector even though the second half of the year will remain tough.

De Klerk points out that leasing has picked up in the office sector, although it still lags other commercial property sectors owing to some businesses consolidating space, adding to an over-supply in the market. “Businesses that previously gave up offices are returning to the market. Office vacancies in Cape Town and Durban have reduced remarkably and letting activity has increased significantly in Gauteng,” says de Klerk.

This is acknowledged by SA REIT Association CEO Joanne Solomon, who is optimistic about the rental market and demand for office space in particular. “The rental market is showing signs of gradual recovery, despite challenges posed by municipal rates and utility increases in metropolitan areas. The industry is working together to try and reduce the impact in the future of municipal increases,” says Solomon.

De Klerk notes that the logistics and healthcare property sectors are performing well, with the former showing strong results despite some fluctuations in key metrics. Supply and demand in the logistics sector have become more evenly balanced as new development has slowed due to high construction costs linked to higher inflation.

He also says that even though there are good investment opportunities in the market, disposal and acquisition activity in the sector is subdued due to the higher cost of funding and constrained balance sheets, with many companies focusing on managing their loan-to-value ratios.

“Liquidity remains limited and there are not many buyers in this market. Buyers are generally owner-occupiers or small investors assembling portfolios. In certain cases, vendor finance is required, and this is not attractive to many sellers,” says de Klerk.

Keillen Ndlovu, an independent property analyst, says the strategy that various REITs have adopted to dispose of assets to help reduce debt is likely to remain in place. “Dividend reinvestment options or scrip dividends will continue to be a source of funding. Given the massive divergence between listed property prices and physical property values, we may see further consolidation and delistings,” Ndlovu says.

He also says that although the sector is cheap, prospects will further improve once South Africa sees a decrease in load shedding, lower interest rates and a more optimistic economic growth forecast.

In response to the shrinking base of the listed property sector, which has fewer counters on the JSE and a market cap of around 48% less than its peak in December 2017, de Klerk notes the current situation is common for this business cycle and may reverse in more favourable market conditions.

Commenting on listed property companies with offshore exposures, de Klerk says they have not been immune to the high interest rates and inflation which have affected the global real estate sector.

“South African companies that have invested offshore generally adhere to the same conservative principles and disciplines for managing their offshore debt as they do in the more volatile South African environment. As a result of this prudent approach they have performed better than many other investors in these international markets,” he says.

Looking ahead to the future prospects of SA REITs, de Klerk says property remains a long-term investment game and those investors prepared to invest now will reap the rewards when the interest rate cycle improves.

“In the short term, however, most REITs’ distributions will be negatively impacted by higher interest rates on their variable debt. This will reverse when rates start reducing. Several SA REITs are trading at significant discounts to their stated NAVs and offer strong long-term value,” de Klerk says.

SA REITs sector champions women’s empowerment with steadfast progress

Embracing transformation within the South African economy, women professionals are achieving remarkable feats despite historical barriers. The Real Estate Investment Trust (REIT) sector proudly contributes to this positive trend by actively fostering greater female representation at executive and board levels.

While acknowledging past disparities in the distribution of roles, we’re forging a new path of inclusivity and opportunity. It’s heartening to observe the sector’s determination to enhance diversity by bolstering the presence of women in key decision-making roles. Our dedication extends beyond the executive level, as we aim to empower women across all echelons of the REIT profession.

In our pursuit of progress, there’s a wealth of potential for growth. We’re propelling gender diversity by elevating women to senior roles and cultivating an environment that encourages young women to join our ranks. Through mentorship, support, and opportunities, we’re nurturing the next generation of leaders, enabling them to ascend the ranks steadily.

As the landscape of our industry evolves in a rapidly changing marketplace, it’s only fitting that women take the lead in steering the ship. The competence and capabilities of women are unquestionable, mirroring those of their male counterparts. This transformation is not just a strategic imperative; it’s a testament to our commitment to equity and fairness.

The infusion of women’s perspectives within the REIT sector is invaluable. Their distinctive viewpoints enhance the sector’s vitality, leading to a sustainable future for the sector. While acknowledging that there’s still a journey ahead, we’re celebrating the transformative strides made thus far.

We proudly highlight some remarkable women REIT board members on our social media platforms through August. Their journeys have shattered glass ceilings and continue to inspire leadership within the sector. They stand as living proof that determination and dedication know no bounds when pursuing a vision.

The sector is privileged to be enriched by these talented women. Their astute insights have catalysed progress, benefitting the businesses they represent and the wider community. As we push forward, we’re committed to further enriching our sector with the dynamism and brilliance of women leaders.

By Joanne Solomon, Chief Executive Officer, SA REIT Association

Sa Reit Womens Month

SA REIT unveils newly elected executive committee members for the 2023/24 FY

Estienne Resized 1

The South African Real Estate Trust (SAREIT) Association proudly announces the appointment of its newly elected office bearers and committee members for the 2023/2024 financial year.

The executive team comprises industry leaders committed to advancing the local REIT sector and aligning it with international standards.

Leading the Association’s executive committee is Estienne de Klerk, CEO of Growthpoint Properties SA, who has been re-elected as Chairman. Working alongside him are other re-elected members, including Joanne Solomon, the CEO of SA REIT Association, and Gareth Rees, Finance Executive and Chief Risk Officer of Liberty Two Degrees, who will continue in his role as Treasurer.


Joanne Gareth Geoff_Jennett

Geoff Jennett, Chief Executive Officer of the Emira Property Fund Ltd, was re-elected as the Chairperson of the Conference Committee. The committee is responsible for the planning and execution of the Association’s successful conference which will be held on 15 February 2024 and has opened for registrations.


Leon Andrew

Additionally, the executive committee includes Leon Kok (left), Chief Operating Officer of Redefine Properties, who has been re-elected as Chairman of the Accounting and JSE Committee. The committee’s primary objective is to develop and uphold best practice recommendations, ensuring property companies deliver outstanding annual financial and non-financial reports. This will provide investors with reliable and consistent disclosures in accordance with JSE regulations.

The Investor Committee, a key component in strengthening relationships and engagement with institutional investors, will be chaired by the CEO of Investec Property Fund, Andrew Wooler (right). This committee also seeks to enhance understanding of relevant sector issues while positively influencing the market’s perception of the asset class.


Tracey Ithu

Taking the helm of the Research Committee is Itumeleng Mothibeli (right), Managing Director of Vukile Property Fund, Southern Africa. This committee will focus on generating and providing access to high-quality, independent research concerning the listed property sector in South Africa and other pertinent markets.

The Legal and Competition Commission Committee will be led by the recently elected Chairperson, Tracey Wolf (left). This committee will address REIT-specific legislation and competition-related matters, collaborating closely with other industry bodies to ensure alignment on relevant issues.



Championing the Transformation Committee is Shawn Theunissen, Executive for Corporate and Social Responsibility at Growthpoint Properties. This committee plays a vital role in supporting broad-based black economic empowerment principles within the sector.

With 25 members listed on the Johannesburg Stock Exchange, the SA REIT Association is dedicated to assisting its members in navigating the complex regulatory and governance landscape. By addressing sector challenges and providing essential guidelines and support, the Association aims to meet stakeholder needs while promoting South African REITs as a compelling investment class, both locally and internationally.

SA REIT CEO Joanne Solomon says the expertise and dedication of the newly elected executive team and committee members play a crucial role in aligning the local REIT with international standards.

“We are confident they will contribute to the continued success of our organisation. Please join us in wishing them a successful term in office,” Solomon says.