Redefine International set for September listing

Posted On Tuesday, 24 August 2010 02:00 Published by eProp Commercial Property News
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Redefine is on track to list its subsidiary, Redefine International, on the JSE on 7 September 2010, providing South African private and institutional investors with the opportunity to utilise Rands to invest in an international portfolio of properties

Mike WattersRedefine International CEO Mike Watters says Redefine is the first listed property company to receive approval for foreign direct investment in offshore property. “Redefine International’s sole asset will be its shareholding in Redefine International plc  – a company listed on the AIM market of the London Stock Exchange. Each linked unit in Redefine International will effectively equate to one share in the plc company,” he says.

Redefine International will list as Redefine Properties International Limited, and will trade as Redefine International. The JSE share code will be RIN

The JSE has approved the listing of up to 348,505,303 Redefine International linked units in the Real Estate – Real Estate Holdings and Development sector of the JSE, which includes a capital raising by way of a private placement of up to 180-million additional linked units.

“The listing is being preceded by the private placement in order to afford potential investors with the opportunity to participate in the equity of Redefine International,” says Watters. Potential investors (including existing Redefine unitholders) may subscribe for up to 180-million Redefine International linked units at an issue price payable in Rand, which is equivalent to 50 pence per linked unit.

“The offer, which opens at 09h00 on Monday 23 August and closes at 12h00 on Monday 30 August, is expected to garner a positive response, based on the feedback we received at the presentations conducted earlier this month,” he says.

The listing and private placement is subject to, among other conditions, a minimum amount of the rand equivalent of £55-million being received.

The additional capital raised will fund the growth aspirations of the plc company, which invests in retail and commercial real estate primarily in the United Kingdom, Europe and Australia. The company currently owns a portfolio of 91 quality properties in the UK, Germany and Switzerland, valued at approximately £294-million with an effective GLA of 250 000m2. Post listing, the portfolio will include an additional six quality properties in the UK valued at approximately £194-million with an effective GLA of approximately 96,000m2.

It also has interests in two listed funds, namely Wichford in the United Kingdom and Cromwell in Australia.

Watters says the group’s strategy is to provide investors with strong investment returns and a balanced exposure to lower risk income-generating assets and opportunities that will provide a higher capital return. “The investment in Redefine International is expected to provide potential investors with a forward yield of over 7.5%,” he says.

Redefine International plc will pay out 100% of distributable core earnings in dividends in each financial period.

Distributions will be received by Redefine International in pounds and converted to rands at the ruling exchange rate on the date they are received. This rand denominated income will be distributed to Redefine International unitholders as interest. Interest distributions will be paid twice yearly by Redefine International for the six month periods ended August and February.

Watters says South African participants will own an investment in good quality offshore properties at an attractive yield and a growing income stream with an added benefit that investing offshore may provide an effective rand hedge.

“It is the view of many economists and market commentators that over time, the rand will weaken against the pound, euro and Australian dollar. Aside from the growth anticipated from the portfolio, distributions that are paid in pounds will be boosted by the weakening rand/pound exchange rate,” he says.

Watters adds that property values are expected to continue recovering in the UK, Germany and Switzerland. “Once a general economic recovery is underway, we also expect interest rates to rise until they normalise. The group will accordingly focus on interest rate hedging strategies.

“The company will continue to be managed conservatively, with a focus on protecting existing assets. The market is presenting a number of attractive investment opportunities and these will be assessed in accordance with the group’s strategy, subject to available financing and maintaining sound financial health,” he says.

Last modified on Wednesday, 22 January 2014 09:34

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