Redefine concludes an oversubscribed R781 million unsecured bond issue

JSE-listed real estate investment trust Redefine Properties (JSE: RDF) has successfully raised R781 million via a public bond auction, driven by strong demand from funders and healthy liquidity in the debt capital markets.

Redefine’s bond issue was oversubscribed by 1.77 times, receiving R1.4 million in bids that resulted in an allocation of R781 million across the five- and seven-year tenors at an auction held on 11 March.

Five-year notes of R377 million were placed at a margin of 149bps, and seven-year notes of R404 million were placed at a margin of 165bps, both over a three-month Johannesburg Interbank Average Rate (JIBAR).

The issue was launched through Redefine’s JSE-approved R30 billion domestic medium-term note programme, with the nominal R377 million and R404 million in unsecured floating rate notes set to mature in 2029 and 2031 respectively.

“We are pleased that we were well supported by our funders in the debt capital market, with robust demand received from institutional investors,” said Ntobeko Nyawo, Chief financial officer at Redefine.

“The longer-dated seven-year bond in particular attracted substantial interest with just over R400 million issued at the lower end of the market pricing guidance. The bond issuance will extend Redefine’s debt maturity profile and further diversifies our debt sources,” he continued.

Nyawo explained that the proceeds from the bond will be used to repay upcoming bond maturities during FY24 and as such, Redefine’s loan-to-value ratio will remain unchanged.

Redefine’s portfolio, valued at R96.8 billion (FY22: 88.9 billion) is anchored in South Africa through directly held and managed retail, office, and industrial properties and is complemented by a strong presence in retail and logistics property assets in Poland. By volume, Redefine’s shares are among the most actively traded in the SA REIT sector, making it a highly liquid, single-entry point for investors to gain exposure to the South African and Polish real estate markets.