Archives for October 2020

The COVID-19 pandemic continues to wreak havoc everywhere – and South Africa is no exception. At Redefine we are continuing to adapt to the “new normal” and are ensuring our business is on track and functioning well.

We will provide more information on our plans and strategic initiatives during our upcoming annual results presentation in November.

Please be aware, however, that in order to accommodate the external auditors’ requirement for added audit emphasis, particularly around asset valuations as a result of the impact of the COVID-19 pandemic, the finalisation of Redefine’s financial results for the year ended 31 August 2020 (“financial results”) may be delayed. Accordingly, the announcement of our annual results has been postponed from Monday 9 November, to Monday 30 November 2020.

Details of our results webcast and presentation will be communicated closer to the time.

Growthpoint Properties has acquired the newly developed, income-producing Grand Prix Park in Gosforth Park, Germiston, for R140m.

Early in the industrial park’s development process Growthpoint recognised the potential of the 18,000sqm property and agreed to acquire it from the developer on completion, on condition that the final product was of a suitably high standard and at least 75% let.

The development was completed in late 2019 and two years after discussions began, the property transferred to Growthpoint in June 2020.

The park’s seven different units vary in size, with most ranging between 2,000sqm and 2,800sqm. Each unit is self-contained and has its own entrance, secure yard, parking and landscaping. All units include an office component and feature sprinkler fire protection.

Grand Prix Park’s tenants include Allied Mineral Products SA, which is the park’s biggest tenant across two units, as well as Simmons SA and Consumer Package Goods (a division of Imperial Logistics). Its largest unit, occupied by Gunnebo, is freestanding and measures 3,800sqm.

Errol Taylor, Head of Asset Management: Industrial at Growthpoint Properties, remarks, “We felt that this property was well located in a good industrial node with easy access to superior arterial links connecting with the N17, N12 and N3 highways. Its size and location make it especially well-suited for secondary logistics and light industrial users. Growthpoint is highly selective when considering properties to grow our industrial portfolio. We are confident that Grand Prix Park is a good match for our strategy and an asset that will enhance our portfolio.”

Besides the quality of the development and its excellent location, an appealing factor for Growthpoint was the wide range of businesses for which the facilities would be well suited because they are industry-agnostic and flexible. The size of the units makes them stand out in the market, being bigger than standard maxi-units yet less expansive than highly-specialised, massive distribution centres.

Growthpoint Properties is significantly invested in industrial property in Germiston and Ekurhuleni. Earlier this year, Growthpoint and Serra Services achieved Gauteng’s first Green Star Existing Building Performance (EBP) rating for an industrial building, with a 5-Star certification for a 7,400sqm facility in Meadowbrook, Germiston. Serra’s premises are directly adjacent to Growthpoint’s award-winning 5-Star Office Design v1 certified Grundfos development.

Growthpoint creates space to thrive with innovative and sustainable property solutions. It is South Africa’s largest primary JSE-listed REIT and is invested in real estate and communities across Africa, Australia, the UK and Eastern Europe.

Rosebank, South Africa, 06 October 2020: JSE listed diversified real estate investment trust Redefine Properties is pleased to announce that it has reached a mutually beneficial and alternative arrangement relating to the conclusion of the sale of the Mall of the South (MOTS). As part of the agreement, the 73 111sqm regional shopping centre in Aspen Hills, south of Johannesburg will be acquired by a limited liability special purpose vehicle (SPV) for R1.76 billion in cash. RMB Investments and Advisory Proprietary Limited will hold an 80% equity interest in the SPV and Redefine 20%.

The deal will be funded through a loan agreement with RMB.

The transaction is expected to close before 1 November 2020 once all conditions are met, including approval by the Competition Commission and other usual approvals.

Construction of MOTS began during 2013, and at that time the property was considered to be an attractive asset to complement Redefine’s retail property portfolio. In order to secure participation in the development, Redefine entered into a structured financing transaction with Zenprop and RMB, which would allow or require Redefine to purchase MOTS upon the occurrence of certain events.

“Given that circumstances had changed dramatically, clearly unforeseen at the time of entering the put agreements, all the parties agreed to engage constructively to restructure the put arrangements,” says Andrew Konig, CEO, Redefine Properties.

“The restructure allows additional time for MOTS to recalibrate to the post COVID-19 retail real estate environment and provides Redefine with the opportunity to either acquire or dispose MOTS over a three-year period. We do not anticipate the restructured arrangement to have a significant adverse impact on our loan-to-value ratio.”

Konig reiterated his views expressed at the pre-close briefing for the year ending 31 August 2020 that “property fundamentals are going to be challenged for the rest of 2020 and beyond” due to unprecedented and evolving market conditions.

The coronavirus pandemic has dealt a blow to retail tenants and landlords already struggling with declining disposable incomes and a sluggish economy. The public health crisis temporarily closed malls nationwide at the end of March, when the Government enforced a strict lockdown, the hardest the world has seen.

The transaction constitutes a category 2 transaction in terms of the JSE Listings Requirements and is not subject to approval by Redefine shareholders.