Redefine Properties differentiates international portfolio

08 May 2015

Although South African real estate investment trust (Reit) Redefine Properties would continue operating in South Africa, the company would seek to expand its international portfolio.

During the first half of the 2015 financial year, ended February 28, Redefine entered into a JV with Redefine International (RI) to acquire a 50% interest in a portfolio of 56 retail properties in Germany.

Redefine CEO Andrew Konig said: “[This marks] our first direct entry into Europe,” he added. The total investment was just over R700-million and Redefine’s aggregate consideration for the first phase of the acquisition was R418-million, at an initial yield of 7.5%.

Currently, about 15% of the group’s portfolio was invested offshore and was expected to grow to about 25%. The company’s strategy was to invest in markets where it had local representation, where it had aligned interests with local partners, where the economies were developed, with no currency restrictions, and which had a sophisticated rule of law and tax regime.

The company also acquired European real estate manager Valad for €145-million through its Australian subsidiary Cromwell Property Group.

“Redefine intends to grow its direct holding over time, as Cromwell prefers commercial office property exposure in Australia. We have grown the [group’s] portfolio significantly during the period. In total, we have concluded acquisition of about R10.7-billion, [including new South African assets].

Our focus is still in South Africa; if you take into consideration all the investments that have been made, 90% of it was here,” Konig noted.


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