Redefine Properties, one of South Africa’s largest property groups, has signed a renewable energy supply agreement that will meet a significant portion of its total Eskom-connected electricity requirements from renewable energy sources. This agreement, signed with NOA supports Redefine’s decarbonisation efforts through wheeling, while also enabling significant energy cost savings for the JSE listed property company.

With a municipal wheeling solution between the parties to follow as a second phase of the engagement, the initial agreement focuses on Redefine’s Eskom-connected premises across multiple property locations.

“Future-proofing our assets is central to Redefine’s strategy, and this agreement plays a key role in that. By securing renewable energy at scale through wheeling, we’re not only reducing emissions and controlling costs but also building resilience across our portfolio,” said Scott Thorburn, National Asset Manager Commercial at Redefine Properties.

Redefine will receive a carefully crafted blend of renewable energy at 11 of its Eskom-connected properties, ensuring a high level of renewable energy penetration while providing the flexibility to reallocate energy between locations. The agreement will supply 37 GWh per year over a 20-year period, reducing CO₂ emissions by over 39 000 tonnes annually.

NOA, as an integrated renewable energy utility, will source the energy from both third-party Independent Power Producers (IPPs) and its own generation facilities. The aggregated energy will then be allocated to the property group’s designated premises. Most notably, one of the sites that will be supplying Redefine is the Khauta Solar PV project, located near Welkom, Free State. The generation facility is expected to be one of the largest Solar PV sites in South Africa.

“NOA’s bespoke energy products are ideal for property sector customers. By allowing energy reallocation between multiple locations across South Africa, we ensure high renewable energy penetration while limiting the risk of customers paying for unused energy,” said Karel Cornelissen, CEO, NOA.

SOLINK Energy Brokers, a wheeled energy specialist, analysed Redefine’s energy needs and sustainability goals, sourced NOA as the ideal supplier, and supported the deal through to signature.

This agreement underscores the critical role of energy traders and aggregators in supporting the decarbonisation of the property sector, where rooftop and onsite energy solutions often have limitations.  By providing tailored renewable energy solutions, NOA enables large-scale property groups to structure both commercially accretive and environmentally compelling energy agreements.

“The property sector is a key growth area for NOA, offering solutions that can achieve over 80% renewable energy penetration through a phased supply framework,” concluded Cornelissen.

The post Redefine signs 37 GWh renewable energy wheeling agreement appeared first on SA REIT.

Johannesburg, 12 May 2025 – Redefine Properties, a leading South African Real Estate Investment Trust (REIT) with a diversified portfolio locally and in Poland, has reported solid financial results for the six months ended February 2025. The company’s core operating segments delivered organic growth, underscoring the efficiency, durability and quality of its asset platform.

Profitability continues to improve across all regions, driven by improved occupancy levels and disciplined cost management. The group-wide net operating profit margin rose to 76.9%, up from 76.5% in the comparable period, with South Africa at 79.1% and EPP core (Poland) at 77.2%. EPP’s core occupancy reached a near-full 99.2%, while local occupancy also showed steady improvement, signalling the resilience of the leasing market despite ongoing rental pressures – particularly in the local office sector.

Reflecting on the past five years, CEO Andrew König described the period as “a game of snakes and ladders,” shaped by successive global shocks – from COVID-19 to energy crises, warring conflicts, interest rate hikes, and more recently trade tensions. These disruptions have heightened uncertainty, undermining capital market stability and unsettling business confidence that property cycles rely on.

“Despite this, Redefine continues to emerge stronger, reshaping itself to capitalise on the upside to thrive amid complexity,” said König. “Our half-year results reflect measurable improvement, an opportunity-led strategy, and a well-capitalised balance sheet that positions us to weather volatility and drive long-term value creation.”

Some of the notable highlights during the half-year period include an improvement in Redefine’s loan-to-value (LTV) to 41.2%, moving closer to the targeted 38-41% range. A key contributor is the ongoing simplification of the Polish joint ventures – a strategic priority aimed at lowering LTV, reducing equity risk, and alleviating high finance costs. “Disposing of select joint venture interests would free up capital to reduce debt or reinvest into core assets, both of which support earnings and reduce equity risk,” said König.

Debt strategy delivers stability amid shifting macro conditions

 Chief Financial Officer Ntobeko Nyawo said Redefine successfully refinanced the majority of its R3.5 billion in maturing debt in FY2025, with only R500 million remaining. The group’s liquidity position improved to R6 billion from R4.8 billion at 31 August 2024, with ample reserves to cover maturities through to 2026 – a strong buffer as trade-related tariff wars play out.

He noted that 77.6% of total debt is hedged for an average tenor of 1.1 years and the maturity weighted average term of debt is healthy at 3.4 years. Moody’s reaffirmed Redefine’s Ba2 rating with a stable outlook, supporting continued access to debt capital markets. “Our proactive approach, including the successful issue of R2.1 billion in bonds this period, reflects the strength of our debt funding relationships,” said Nyawo.

Industrial and retail outperform, office under pressure

 According to Chief Operating Officer Leon Kok, Redefine’s operational performance reflects its sustained focus on efficiency, asset quality, and tenant retention. In South Africa, overall portfolio occupancy improved to 94.7%, with the industrial sector achieving standout results – just 1.1% vacancy, lease renewal reversions of 4.6%, and high tenant retention, all driven by active asset management.

The retail sector also showed a positive turnaround, recording the first positive lease renewal reversion in over three years at 0.4%, indicating improving tenant sentiment and the strength of dominant, well-located centres.

By contrast, the office portfolio remains challenging due to a national oversupply and constrained rental growth which places pressure on renewal reversions. However, nodes like Rosebank and parts of the Western Cape are seeing strong demand for P-grade space. Kok noted that economic growth and political stability, along with clearer interest rate direction, would be key to unlocking rental growth in the office market.

Redefine has also made major progress in its renewable energy drive. “We increased our installed solar PV capacity by 20% during the period to 52 MWp, and we’re targeting a further 25% increase – around 13.3 MW – over the next 6 to 12 months,” said Kok. “This will bring our total installed capacity to over 64 MWp, in line with our commitment to reduce reliance on the national grid and drive long-term sustainability.”

Strategic progress in Poland underpins diversified growth

 In Poland, Redefine’s EPP core retail platform maintained an exceptional occupancy of 99.2%, with a healthy rent-to-sales ratio of 9.1%, indicating sustainable tenant health and rental affordability.

Redefine’s Polish logistics platform (ELI), co-owned with Madison, is progressing with a planned portfolio division and revised shareholders agreement, which is expected to be finalised by June. Vacancy in this portfolio is projected to decline from 6.6% to 3.5% by June, thanks to recent leasing activity.

In addition, Redefine is advancing its self-storage platform in Poland, with 10,000 sqm of net lettable area currently under development and 38,000 sqm under consideration. The initial €50 million equity commitment is being deployed into these developments, and the company is actively seeking a co-investment partner to match this with an additional €50 million in capital.

Capitalising on opportunities to enhance relevance

 Redefine reaffirms its distributable income per share guidance of 50-53 cents for the period and expects to maintain a dividend payout ratio within the 80-90% range. The company’s strategic focus remains firmly on disciplined capital allocation, simplification of joint ventures, organic growth, and operational efficiency.

“We are not chasing expansion for its own sake,” concluded Konig. “Our goal is to enhance the quality and performance of our current portfolio, maintain liquidity, and continue creating long-term value for our stakeholders. The recent sale of Power Park Olsztyn in Poland, increased ownership in Pan Africa Mall from 51% to 68%, and the completion of its second expansion phase are all examples of how we are optimising our asset base.”

Looking ahead, the group remains focused on harnessing technology as an enabler of more efficient operations and value creation.

The post Redefine strengthens position in uncertain market appeared first on SA REIT.

By Samantha Lambert, General Manager, Redefine Properties

In an era of unprecedented environmental and operational challenges, South Africa’s office parks stand at a critical juncture. Energy insecurity, water scarcity, and ageing municipal infrastructure are no longer distant concerns but immediate challenges that demand innovative solutions. Yet, within these challenges lies an opportunity to reimagine office parks as beacons of sustainability and operational resilience.

The business imperative for sustainable office parks

Sustainable office parks are no longer just an environmental consideration; they are a business imperative. Unreliable municipal power supply and recurring water shortages directly impact operational continuity and tenant satisfaction. Simultaneously, tenants and investors increasingly demand spaces that combine operational resilience with environmental responsibility. This convergence of operational necessity and stakeholder expectations is reshaping how we approach office park development and management.

Black River Office Park in Cape Town’s Observatory district exemplifies this transformation. The park’s evolution has been accelerated by significant node activation, including Amazon’s new head office development across the way. This strategic location, with its superior road infrastructure connecting to both northern and southern suburbs, has catalysed the area’s development into what we envision as an emerging Century City-calibre node.

Infrastructure that powers performance

Leading sustainable office parks are distinguished by infrastructure investments that address both environmental impact and operational resilience:

• Renewable energy systems: Black River’s solar fleet, with an installed capacity of 1,496 kWp supported by 5,715 panels, significantly reduces grid dependence while ensuring consistent power supply.
• Backup power solutions: A comprehensive backup generator system, coupled with a centralised power plant, ensures business continuity during grid interruptions – a critical feature that’s no longer optional but essential for tenant operations.
• Water security measures: Strategic use of borehole water for refuse yards and irrigation supports water-wise landscaping, reducing municipal water dependence while maintaining attractive green spaces.

These investments deliver measurable returns through reduced operating costs and enhanced tenant satisfaction. The park’s near-full occupancy demonstrates the strong market demand for sustainable, resilient office space.

The multi-tenant advantage: How diversity drives growth

Sustainability extends beyond utility management to encompass how spaces support diverse business needs. Black River Office Park comprises 14 distinct buildings, each with its own identity, enabling a unique ecosystem where corporate offices and business process outsourcing (BPO) operations successfully coexist. As we’ve discovered, sustainable office parks must be flexible enough to accommodate varying density requirements while maintaining premium-grade standards.

The park’s design thoughtfully incorporates energy-efficient building systems alongside carefully planned green spaces that enhance both environmental performance and user well-being. Supporting amenities promote tenant productivity and satisfaction, while flexible spaces readily adapt to changing business needs.

This approach has attracted a diverse tenant mix, including boutique gyms, award-winning salons, medical practices, and varied food offerings. As a result, it has created a vibrant, community-centric environment that supports approximately 2,000 employees, a number set to double with recent expansions.

Collaboration: The key to sustainable success is collaboration

Achieving meaningful sustainability requires close collaboration among REITs, tenants and vendors. At Black River, this collaborative approach begins with our tenants, working closely with them to optimise space utilisation and resource efficiency. We engage suppliers in sustainable procurement practices while maintaining strong partnerships with the City of Cape Town and CapeBPO to align with regional development goals. Our Red Thread initiative exemplifies this collaborative spirit, repurposing materials from gutted buildings to benefit the community and demonstrate our commitment to circular economy principles.

Smart design, smarter returns

Modern technology plays a crucial role in maximising sustainable infrastructure performance. At Black River, we’re investing in smart building systems for resource optimisation, complemented by advanced monitoring tools for energy and water consumption. Our commitment to continuous assessment of environmental performance drives strategic upgrades that maintain our premium-grade status.

The planned redevelopment of Gate House, which anchors the entry point to Black River Park, illustrates our commitment to ongoing evolution. This project will enhance the building’s exterior while maintaining its distinct character, demonstrating how sustainable design can complement heritage features.

Market leadership through environmental excellence

As South Africa continues to face environmental and infrastructure challenges, sustainable office parks will play an increasingly vital role in our business landscape. The success of Black River Office Park demonstrates that sustainability isn’t just about environmental responsibility; it’s about creating resilient, future-ready spaces that deliver lasting value for all stakeholders.

Property owners and managers must take a long-term view, balancing immediate operational needs with future sustainability requirements. This means investing in robust infrastructure, fostering collaborative ecosystems, and maintaining unwavering commitment to continuous improvement.

The future belongs to office parks that can adapt, evolve and thrive in the face of change. Embracing sustainable practices today not only protects our environment but also ensures the long-term viability of our assets. At the same time, it creates spaces where businesses can flourish for generations to come.

The post Office parks reimagined appeared first on SA REIT.

The company reported that its South African portfolio achieved a net operating profit margin of 77.8%, while EPP, its directly owned Polish retail property platform, improved its margin from 66.4% to 71.7%. This led to a consolidated group net operating profit margin of 75.9%.

Redefine CEO Andrew König highlighted that the global path to economic normalisation has been disrupted by changes in US policy under President Donald Trump, which introduced uncertainty around interest rates and inflation. “The stage is now set for a shallow easing cycle, and rates may not reach the levels we previously expected. While European interest rates continue to trend downward, escalating geoeconomic tensions cloud the 2025 outlook. To sustain growth in valuations, we cannot rely solely on interest rate movements. Our strategic focus remains on organic income growth, as this will drive value creation in the current market.”

Looking ahead, Redefine’s strategy is focused on disciplined capital allocation, the sale of non-core assets to reduce its loan-to-value ratio, restructuring joint ventures to enhance visibility of income streams, whilst delivering income growth. König noted that commercial real estate transactional activity is on the rise, which will support the company’s plans to offload non-core assets, with growing interest in the market.

Despite the disruption caused by the delayed national budget speech, König pointed to two promising initiatives from the National Treasury: efforts to remove South Africa from the greylist by October and the restoration of the country’s investment-grade credit rating. “This is critical for our business, as Redefine’s Moody’s rating was downgraded alongside South Africa’s. A reversal of this could improve access to international debt markets, and the delayed budget may even help with these efforts.”

 Green shoots in the SA portfolio

 Redefine’s South African portfolio has demonstrated solid performance, particularly in the industrial and retail sectors, which drove a 1% increase in overall occupancy since August 2024. Additionally, 80% of renewals were completed at stable or increased rental terms, a positive indicator of growth.

The industrial sector has proven especially resilient, with occupancy rising to 97.6%, alongside positive rental reversions in a competitive market. “The industrial sector continues to be one of our strongest performers, and we see potential for further growth if capital availability allows us to expand,” said Leon Kok, Redefine’s COO.

Conversely, the office sector remains challenged by excess supply and limited demand, except in select nodes. A significant lease renewal resulted in a -17% renewal reversion during the period. However, Redefine mitigated this impact through strong leasing activity in other locations, such as the Western Cape and Sandton, which benefit from proximity to the Gautrain. “Demand is focused on high-quality assets, and our active asset management ensures our portfolio remains well-positioned to attract this limited demand,” Kok added.

Sustainability commitments

 Redefine is making notable strides towards its sustainability goals, with an ambition to become the most sustainable property company by 2030. The company plans to expand its renewable energy capacity by 47%, with an anticipated 17% of energy consumption coming from renewable sources by year-end. Additionally, Redefine has achieved a 38% reduction in greenhouse gas emissions across its European portfolio, further solidifying its commitment to environmental sustainability.

The company also received recognition from Sustainalytics, earning three badges, including being ranked the 16th most sustainable global real estate company, the only South African REIT to place among the top 50 worldwide.

Growth in Poland

 While South Africa faces ongoing challenges, Poland’s economic growth has benefited from European interest rate cuts and social grants that have boosted household spending and retail conditions. EPP’s core properties have seen impressive occupancy levels of 99.3%, with rental reversions rising from 0.2% to 1.5%. The rent-to-sales ratio remains well below 9%, indicating healthy tenant affordability.

Redefine is pursuing a strategy of selling non-core assets and restructuring joint ventures in Poland to reduce complexity and lower the see-through LTV. “We are exploring options to simplify our joint ventures to either exit or fully own them,” König explained.

 Strong cash generation

 Redefine’s financial position remains strong, with a liquidity profile of R6.4 billion as of November 2024. The company has also proactively managed its debt profile, including the FY25 maturities that are progressing well on the back of improved liquidity levels in the capital markets. As of February 2025, Redefine’s weighted average cost of debt decreased to 7.2%, providing some relief amid global inflationary pressures.

Ntobeko Nyawo, Redefine’s CFO, emphasised, “Our focus continues to be on generating organic growth from our existing portfolio, maintaining a strong balance sheet, and weathering the current economic cycle. We are positioning the company to capture opportunities in high-quality assets, while ensuring strong cash generation to support our dividend payouts.”

Looking ahead: Living the upside

Redefine enters 2025 with a focus on “living the upside,” aiming for sustainable, long-term value creation. König concluded, “While some macroeconomic factors, including US policy shifts, remain unpredictable, we are confident in our ability to create our own upside and deliver on our strategic goals.”

Despite macroeconomic challenges, the company is maintaining its earnings guidance for FY25, with distributable income per share expected to be between 50 and 53 cents.

The post Redefine navigates uncertainty with focus on organic growth appeared first on SA REIT.

In 2024, Redefine received an overall Sustainalytics ESG risk rating of 6.5, positioning it 35th out of 15,111 companies rated by Sustainalytics worldwide and 12th globally in the real estate category. A rating of 6.5 places Redefine in the lowest negligible-risk bracket, meaning that the company’s exposure to ESG issues is low, while its ability to manage any issues with the help of its practices and policies is high.

Redefine is dedicated to setting the benchmark for ESG leadership in the South African real estate sector. Its strategy embeds ESG principles into every decision, ensuring long-term value creation through sustainable investment and operations. The company’s environmental strategy is defined by clear policies, measurable impact, and accountability across key focus areas.

As part of its ESG efforts, Redefine integrates numerous sustainable design practices into its office parks and properties. Energy-efficient buildings, green spaces, and eco-friendly materials are standard, reinforcing its dedication to operational efficiency and environmental responsibility. These efforts translate into tangible benefits, from lower utility costs and healthier workspaces to increased tenant satisfaction.

As demand for responsible and sustainable real estate grows, Redefine continues to lead by example. For instance, Blue Route Mall is advancing its sustainability efforts by working toward becoming a plastic-free mall, while Matlosana Mall has implemented waste reduction and energy conservation initiatives to minimise its impact.

Sustainalytics’ ESG Risk Ratings provide a multi-dimensional assessment of a company’s exposure to industry-specific risks and its ability to manage them. The rating system is built on three key pillars: Corporate Governance, Material ESG Issues (MEIs), and Idiosyncratic Issues. By assessing companies through this framework, Sustainalytics analyses policies, practices, and performance data to determine ESG risk levels.

As ESG factors increasingly shape investment decisions, Redefine’s achievements reinforce its status as a responsible, forward-thinking REIT. Looking ahead, the company remains focused on advancing its ESG strategy, continuously improving sustainability measures, and driving meaningful change in the real estate sector.

As stated by Ursula Mpakanyane, Head of ESG at Redefine Properties: “At Redefine, sustainability is not just a commitment; it is embedded in everything we do. Being the only South African REIT featured in Sustainalytics’ Global 50 Top-Rated ESG Companies is a testament to our unwavering dedication to responsible real estate. Our negligible-risk ESG rating of 6.5 reflects the strength of our policies, governance, and environmental initiatives, reinforcing our ability to manage ESG risks effectively. As we continue to integrate sustainability into our operations, from energy-efficient buildings to waste reduction and green design, we remain focused on creating long-term value for our stakeholders while shaping a more resilient and sustainable built environment.”

With a commitment to ESG leadership, Redefine is not just future-proofing its business; it is shaping the future of responsible real estate. Through innovation, accountability, and a results-driven approach, Redefine continues to set new standards, delivering lasting value for stakeholders and the environment. This is not just progress; it’s a sustainable legacy in the making.

The post Redefine raises the bar for ESG with global recognition appeared first on SA REIT.

Johannesburg, 2 December 2024 – Redefine Properties (JSE: RDF), one of South Africa’s leading real-estate investment trusts (REIT), has noted an improvement in trading conditions in South Africa’s retail sector going into the 2024 holiday season. With positive trends in retail sales, rental renewal rates and visitor foot count, the momentum in the sector bodes well for South Africa’s future growth.

In August 2024, retail sales in South Africa increased year-on-year by 3.2%. This marked the sixth consecutive month of growth in retail activity and at a robust pace. Additionally, foot traffic in major shopping centres rose by 8.3% year-on-year during the second quarter of 2024, a positive trend that has continued since December 2021. The rent-to-turnover ratio, which is a measure of retailer’s cost of occupancy, is now at its best level in more than ten years.

Nashil Chotoki, Retail national asset manager at Redefine, attributed the growth in retail activity to non-discretionary spending, with food and value-focused retailers serving as the main industry drivers. “Within the Redefine portfolio, grocers contribute 64% of turnover growth. Therefore, a tenant mix of essential services and retailers aligned with value offerings that is relevant to the demographics of the catchment areas will be a key success factor for shopping centres. It is why Redefine will increase its exposure to this category to 40% of its GLA in the next financial year,” Chotoki explained. “Lower interest rates and improved consumer confidence will further drive retail sales growth into some of the discretionary retail categories, and, ensuring that the tenant mix of a shopping centre is aligned to this will create sustainable growth.”

These trends come on the heels of the release of Redefine’s annual results for the 2024 financial year (FY24). The REIT’s retail portfolio accounts for 45% of its South African property asset platform, with a carrying value of R28.3 billion (up from R24.6 billion in FY23). Redefine owns 59 retail properties nationwide, occupied by 2,807 tenants with an annual trading density of R34,700 per sqm. The portfolio’s rent-to-turnover ratio of 7.7% reflects sustainable revenue growth prospects across its retail formats.

Redefine also enjoys an active occupancy rate of 95%, which it expects to increase in FY25 due to healthy letting demand. Furthermore, with the help of tenant support programmes and data-driven insights, Redefine ensures tenants are placed in optimal macro-locations to enhance their trading performance. This has enabled Redefine to improve its rent reversion rate on renewal to 0.2% and achieve a renewal success rate of 88%. Our analysis goes way beyond shopper data and combines a variety of data to drive insights to make decisions that inform our strategy at an asset level.

“We have also found that upgrades to stores, particularly grocers, drive improvements in turnover through attracting new customers to shopping centres. That is why Redefine is working closely with national retailers to support this, culminating in 8,500 sqm worth of upgrades scheduled to commence in February 2025,” Chotoki added.

To further diversify income streams, Redefine has pursued alternative revenue opportunities through in-mall and exterior billboards, and electric vehicle charging infrastructure installed at eight sites. Sustainability remains a top priority, with solar photovoltaic plants generating 18% of the portfolio’s energy needs thanks to an installed capacity of 34,587 kWp. Expansion plans will add another 12,351 kWp in capacity.

“There are still challenges in our path, but what is certain is the resilience and promise that South Africa’s retail industry poses from both a consumer and business perspective. Through strategic planning and implementation, and by prioritising the needs of consumers and our tenants, we are fully tapping into the power of retail spaces as social and economic enablers,” Chotoki concluded.

The post Redefines’retail portfolio grows as trading conditions in SA improve appeared first on SA REIT.

 Johannesburg, November 2024 – Redefine Properties, South Africa’s listed real estate investment trust (REIT), has officially opened the newly expanded Pan Africa Mall. The expansion added 9,000sqm of additional retail space, increasing the mall’s total gross lettable area (GLA) to over 25,000sqm. The mall is co-owned by Redefine Properties and Talis Property Fund.

Pan Africa Mall, located in Alexandra, underwent a significant upgrade, offering a wider range of stores and restaurants for the community. The centre now features a new upper-level floor for fashion retailers, including the relocated Mr Price and Ackermans stores, and an extended ground floor, which includes a new Roots Butchery, an expanded Truworths, and an FNB branch. Notable new tenants include W.Edit, Sportscene, Pick n Pay Clothing, Jam Clothing, Hungry Lion, Vision Works, The HUB, Selfast, Nizams, Clothing Junction, and Tekkie Town.

Andrew König, Chief Executive Officer at Redefine, says, “The expansion of Pan Africa Mall is a major milestone for both Redefine and the Alexandra community. By creating opportunities for local businesses and investing in sustainable solutions like solar power, we are contributing to the area’s economic growth while ensuring the centre serves the community for years to come.” The new expansion reflects Redefine’s vision to enhance the retail experience and collaborate with the Alexandra community towards collective growth.

Pan Africa Mall’s environmental, social, and governance (ESG) credentials will be improved as the upgrade incorporates full back-up power and water – including the exploration of sinking a borehole, a R12.2 million solar photovoltaic (PV) system with an 851kWp capacity, and the installation of energy-efficient lighting and water efficient toilets. Including these ESG measures into the centre’s operations is vital to Redefine’s commitment to sustainability, enhancing customer loyalty, and future-proofing the shopping area, helping the community it serves.

Tebogo Mogashoa, Chairman of Talis Property Fund, adds, “As investors deeply committed to Alexandra, Talis Property Fund sees this expansion as more than just retail growth – it’s an investment in the social fabric and economic future of the area.

“We have seen how the Pan Africa Mall has evolved into a welcoming space that fosters strong community connections, where families, small businesses, and social partners come together. Building on a foundation of trust, our partnerships remain instrumental in creating lasting value, reflecting the strength of collaboration in stimulating local economic development.

“We’re grateful to our social partners who have played a central role in helping us realise this vision.”

In a pioneering initiative, the centre was the first of its kind in South Africa built with fully integrated public transport, which includes a 50,000sqm taxi facility. Street hawkers are now being offered permanent stalls – managed by the Alexandra Taxi Association. Redefine is committed to growing smaller businesses and improving the area for customers.

“This project is about more than just expanding a shopping centre. It is about empowering local businesses and driving urban renewal in Alexandra. Redefine is committed to creating lasting value for the community and shaping a sustainable future for South African cities,” König concludes.

The post Redefine unveils newly expanded Pan Africa Mall appeared first on SA REIT.

Johannesburg, 4 November 2024 – Redefine Properties (JSE:RDF) has reported solid improvements across its key operational metrics for the financial year ending August 31, 2024. This year has marked a crucial turning point for the property sector, as easing interest rates and increasing confidence are leading to better property fundamentals and a more favourable operating environment.

Andrew König, CEO of Redefine, stated that the decrease in political risk, along with a stable electricity supply, has boosted confidence. He noted, “Advancements in strategic reforms, such as Operation Vulindlela and the Government of National Unity’s emphasis on supporting local government as well as a commitment to achieving 3% economic growth, are all contributing to this increased confidence, which serves as a cost-effective form of economic stimulus. This, combined with falling interest rates, is helping to propel the property cycle upward.”

Redefine has focused on preparing for a potential recovery in the property cycle. The reported enhancements in operating metrics, though starting from a low baseline, are primarily the result of strategic initiatives. These include efforts to simplify the asset base, optimise capital by restructuring R27.7 billion in local debt, develop talent, and expand sustainability initiatives like the implementation of solar PV systems to meet energy needs.

Redefine’s COO, Leon Kok, noted that during the reporting period, most of the company’s South African operating metrics have either stabilised or improved. “In particular, occupancy rates increased to 93.2%, up from 93.0% in FY23, with noticeable enhancements across all sectors. Tenant retention, which has become more difficult due to heightened competition from excess supply, is nearing 90%. This is a strong result that reflects the quality of Redefine’s portfolio and the strength of our relationships with tenants, who are eager to renew long-term leases with us.”

He stated that Redefine’s retail portfolio continues to perform well, with occupancy rates for FY24 rising to 95.0% (FY23: 93.6%). “We anticipate further improvements in occupancy rates for FY25 due to positive sentiment and decreasing interest rates, which are expected to enhance consumer spending power.”

Redefine reported an overall improvement in renewal reversions, now at -5.9%, up from -6.7% in FY23, primarily driven by the retail and industrial sectors. While the office portfolio saw negative reversions of -13.9%, Kok explained that this was due to market rentals not keeping pace with underlying rental escalations. He anticipates stabilisation as market conditions improve.

However, occupancy in the office portfolio continues to benefit from Redefine’s exposure to P- and A-grade assets. The limited demand in the office market is increasingly focused on higher-quality properties, where Redefine holds a more competitive advantage.

Redefine’s industrial portfolio remains resilient, benefiting from long leases and quality tenants, with renewal reversions increasing by 5.5% during the period. Kok noted that this result reflects both the portfolio’s quality and the underlying activity supporting market rental growth. “Our strategy in this sector is bullish regarding capital allocation, as we have access to developable land in prime locations near key transport hubs, which should create a strong pipeline of leasing opportunities.”

Kok highlighted the increase in solar PV capacity as another positive result from FY24. During the year, Redefine added a further 8MW of solar capacity, with an additional 18MW currently underway. Once completed, this will bring the total installed capacity to over 60MW.

Solar PV accounts for 18% of the energy requirements for the South African retail portfolio, while Polish retail, logistics, and office sectors utilise 25%, 86%, and 100% green energy, respectively.

In Poland, EPP’s core portfolio has achieved an occupancy rate of 99.1% (FY23: 98.4%), with renewal reversions turning positive at 0.2% (FY23: -7.2%), which signals a return to market rental growth.

“The Polish economy is stabilising, and we are beginning to observe a rebound in retail spending growth due to moderating inflation and electricity costs returning to pre-energy crisis levels,” König explained. “Likewise, the logistics sector is performing well, supported by a market that favours infrastructure expansion, particularly in Western Europe and Germany.”

ELI, Redefine’s Polish logistics platform, has an occupancy rate of 93.4%, and the 62,601 sqm of developments completed during the period are fully occupied.

Redefine’s self-storage operations in that market are also growing, following the acquisition of TopBox. Along with seven new developments being considered, this could potentially increase the net lettable area by an additional 33 277 sqm.

Redefine CFO Ntobeko Nyawo said that from a financial standpoint, Redefine’s balance sheet remains strong. “We achieved distributable income per share of 50.02 cents, in line with our market guidance. Net operating income in our South African portfolio grew by 5.2% to R4.967 billion, demonstrating our ability to maintain profitability amidst challenging conditions.”

The EPP core portfolio delivered net property income of R1.3 billion, which is an improvement on last year’s R1.2 billion, and was largely driven by rental indexation and increased occupancy levels. The cash distributions from the joint ventures also increased to R612.4 million compared with R334.3 million in FY23.

“We have acknowledged concerns regarding the complexity and high leverage of our joint ventures. To address these issues, we have developed a comprehensive plan and programme that will be implemented over time. Although this is not an immediate process, we have a medium-term strategy designed to tackle the challenges associated with these joint ventures, including necessary corporate actions. We are also pleased to report that institutional investment is returning to the Polish market, which supports the launch of our action plan.”

Nyawo said that the solid operational results were offset by the net finance charges increasing by 15.1% to R2.1 billion. “However, if we look at the quality of our earnings, it is pleasing that 95.8% of FY24 distributable income is recurring in nature; demonstrating the business’ ability to generate sustainable earnings in a tough operating environment.”

Nyawo stated that a major priority this year has been developing an efficient funding model to support the growth ambitions of the property platform. During the period, Redefine achieved a significant milestone with its innovative R27.7 billion common debt-security structure, which is anticipated to enhance competition among funders.

“The substantial refinancing completed in FY24 has resulted in a very low-risk debt maturity profile for us. In FY25 and FY26, no more than 10% of our group debt will be maturing, and with access to liquidity of R4.8 billion, our business is able to absorb headwinds and cease opportunities as they arise.”

He noted that the SA REIT’s loan-to-value ratio for FY24 stood at 42.3%, slightly exceeding the target range of 38% to 41%. The acquisition of the Mall of the South contributed 1.1% to this figure, which Redefine had previously communicated to the market. There are plans in place to reduce this ratio within the target range over the medium term.

“Finally, we are pleased to report that our distribution results include a payout of 22.2 cents for the second half, bringing our FY24 payout ratio to 85%. This is within our established dividend payout range of between 80-90%.”

Looking ahead, König said that Redefine is optimistic about FY25, with expectations for distributable income per share to range between 50-53 cents. “We are aware of the geopolitical risks that could disrupt inflation trends and monetary easing. Therefore, we are committed to improving our business performance by enhancing operational efficiency, restructuring our debt, and further simplifying our asset base. This approach will enable us to achieve risk-adjusted returns throughout market cycles. We are transitioning from merely identifying opportunities to actively capitalising on them, building on the progress we’ve made over the past year and focusing on the opportunities we identified in FY24.”

He added that much of the recent improvement in Redefine’s share price can be attributed to macroeconomic factors, such as increased confidence and the downward shift in interest rates. “Moving forward, we need to reinforce this improvement with operational results that support our share price. Our strategy emphasises organic growth, and as our share price approaches a level where the forward yield aligns with our debt pricing, we can reassess the overall debt-equity balance. Additionally, we will offer a dividend reinvestment plan, which seeks to conserve cash for the company and give investors the opportunity to cost effectively reinvest in Redefine’s compelling investment proposition.”

The post Redefine Properties reports solid financial results for FY24 appeared first on SA REIT.

The post Redefine restructuring of R27.7 billion secured evergreen funding appeared first on SA REIT.

As a stakeholder in South Africa’s property sector and a key player in several CIDs, I’ve observed first-hand the significant impact of these initiatives on our urban landscape.

Understanding CIDs

A CID is a defined area where property owners collaborate to provide supplementary services beyond those offered by local municipalities. In areas where municipal services struggle to meet the growing demands of our dynamic cities, CIDs step in to elevate the urban experience. CIDs provide a range of crucial additional services, including enhanced security measures, cleaning operations, and various urban management initiatives such as traffic management, landscaping, pothole and traffic light repairs that improve the overall business environment.

The funding model for CIDs involves property owners paying levies to support additional services. At Redefine Properties, we’ve been at the forefront of this urban evolution, taking an active role in shaping the governance and strategic direction of CIDs where our properties are located. In most instances where Redefine participates in CIDs, a member of our team is assigned as an active director on the CIDs’ board to ensure that the funds collected are well spent and that the necessary governance checks and balances are in place. Redefine ensures that we have clean audits on all CIDs that we participate in each year.

This collaborative approach between property owners allows CIDs to become powerful tools for this level of revitalisation. They not only maintain but actively improve the quality of our shared urban spaces, contributing significantly to the attractiveness and competitiveness of key business areas in Johannesburg.

The economic impact of CIDs

But why should this matter to you, whether you’re a Redefine tenant, business owner, property investor, or simply someone who cares about the future of our cities? The answer lies in the ripple effect of urban redevelopment. A well-managed CID doesn’t just improve the aesthetic appeal of an area; it becomes a catalyst for economic growth within and around the demarcated CID area.

Businesses thrive in environments where customers feel safe and comfortable. Property values stabilise and increase where there are successful CIDs in place. Employment opportunities multiply as the area attracts new investments. In essence, CIDs are not just about maintaining streets; they’re about nurturing the very ecosystem that allows our urban economies to grow.

Sandton Central: A success story

Take, for instance, Sandton Central, Johannesburg’s financial capital, which has maintained its status as a world-class urban centre thanks in large part to the tireless efforts of its CIDs which have been in place since 2003.

Driven by the commercial property owners, including Redefine, the Sandton Central Management District was founded to ensure the creation of an exceptional experience in this key node of Johannesburg. It was established for the employee, visitor, tourist, shopper, property owner and resident of Sandton Central and thus focuses on how this area can better serve these stakeholders. Their team of public safety ambassadors, dedicated JPMD cars with paramedic staff, and on the ground cleaning staff work around the clock, ensuring that Sandton remains a beacon of urban excellence.

As a significant property owner in Sandton, Redefine has played a key role in this CIDs preservation and further transformation. Recently, Redefine as well as other property owners and tenants within the precinct partnered with the City of Johannesburg’s road agency, Eskom and the Sandton Central Management District to power traffic lights at major intersections using generators from its buildings during loadshedding. This initiative has led to all but four intersections being powered by private owners in the event of load shedding or an electrical fault. This hands-on approach has allowed us to pioneer innovative solutions to urban challenges, contributing to Sandton’s success story.

Legal challenges and the need for reform

However, the road to urban revitalisation is not without its obstacles. In 2015, a Supreme Court of Appeal judgement in the Randburg Management District case sent shockwaves through the CID community. By questioning the legality of CID levies under the Gauteng City Improvement Districts Act, this ruling effectively rendered CID funding voluntary. This decision has significant practical implications: without a secure legal basis, CIDs face uncertainty in their operations and long-term planning, potentially undermining their ability to provide consistent, high-quality services.

This legal uncertainty has increased the difficulty of starting new CIDs and the ongoing sustainability of existing CIDs, but I believe it also presents an opportunity for meaningful reform. As industry leaders, we have a responsibility to advocate for a robust provincial and/or municipality legal framework that will secure the long-term sustainability of CIDs. Why? Because this isn’t just about protecting our investments; it’s about safeguarding the future of our cities.

The CID imperative

 CIDs have proven their worth in transforming urban spaces and driving economic growth, as evidenced by success stories like Sandton Central. However, their future hinges on establishing a recognised legal framework at the municipal level in Gauteng and potentially nationwide.

At Redefine, we’re actively working to strengthen and expand the CID model. We’re advocating for clear legislation, engaging with stakeholders, and investing in innovative urban management solutions. Our commitment stems from our belief in CIDs’ potential to drive urban revitalisation.

We invite all stakeholders – other property owners, our tenants, and city officials – to join us in recognising the value of well-managed CIDs and strengthening this crucial tool for urban development. Your active participation, from governance to advocacy, is essential.

Written by Scott Thorburn, National asset manager – Office at Redefine Properties

The post Redefine comments on transformative potential of CID’s appeared first on SA REIT.