Redefine unfazed by Britain’s EU exit

Weeks after Britain’s vote to leave the EU, Redefine International gives the impression that it’s business as usual.

Johannesburg - Weeks after the UK’s decision to leave the EU, listed property investment group Redefine International yesterday gave the impression that it was business as usual as it had since concluded leases that had boosted estimated rental value.

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Redefine chief executive, Mike Waters said yesterday that the diversified nature of Redefine International’s portfolio would shield the company from the uncertainty following the UK withdrawal from the EU, known as Brexit.

Redefine, which describes itself as an “opportunistic income focused” real estate investment trust, said it was pleased with its asset management initiatives on its recently-acquired Aegon UK portfolio. Redefine acquired the Aegon UK portfolio for £490 million (R9.21 billion) last year.

Since the referendum, Redefine International has completed two leases totalling £600 000, which represents a 10 percent increase on estimated rental value, which is an estimate of the rent that could be achieved if a property was let in the open market.

“We firmly believe the diversified nature of the Redefine International portfolio, with 21 percent of market values located in Germany, together with our income focus and long average lease length will prove to be defensive in light of the uncertainty following the UK’s vote to exit from the EU,” Water said.

Comfortable

“We remain comfortable with our debt profile, with an average debt maturity of 7.4 years and no significant debt maturing until 2020. Completed refinancing activities post our half-year results have reduced the cost of debt to 3.4 percent from 3.6 percent,” Waters said.

He said the company was pleased with the level of income-enhancing activity achieved on the Aegon UK portfolio to date.

At 127-133 Charing Cross Road in London, Redefine has completed rent reviews to Three Monkeys and Superdrug. “The company sees significant reversionary potential for the asset based on recent letting activity in the immediate area. In the longer term the property presents a development opportunity with nearby properties securing planning permission for schemes totalling as much as 12 floors,” Redefine said.

Redefine said national retail park vacancies were at a 14-year low. It said the Banbury Cross retail park in Oxfordshire was 98 percent let.

It said it was “assessing a number of opportunities across the portfolio’s retail assets to add additional space and enhance the tenant mix to drive the creation of food and beverage pods” with a range of commercialisation initiatives.

Redefine International shares rose 1.49 percent to R8.15 on the JSE yesterday.

BUSINESS REPORT