Cape Town - Redefine, the listed property income fund, is finalising the acquisition of a R255 million property portfolio.

Brian Azizollahoff, the chief executive, said the acquisition consisted of nine properties that were mainly in Gauteng, with a smaller exposure to KwaZulu-Natal.

The portfolio split of the properties to be acquired was 11 percent commercial, 18 percent specialised commercial, 64 percent industrial and 7 percent retail.

Details on the seller could not be disclosed as some conditions still had to be met. The properties would be acquired at a forward income yield of about 12 percent.

"The buildings are all single-tenanted and have solid long-term leases, with the shortest remaining lease period being six years."

Azizollahoff said Redefine had recently bought land at Shelley Beach in KwaZulu-Natal for the development of a 27 000m2 community shopping centre for R200 million.

Redefine would be a co-owner and co-developer of the shopping centre, which was due to open by October next year.

"The centre is 80 percent pre-let and 90 percent of these tenants are national or major retailers."

The development would have an initial return of 12 percent.

Redefine made acquisitions of about R400 million in its 2004 financial year, which ended in August.

These included the Standard Bank building on Cape Town's foreshore for R220 million, Motown, a specialised retail and light industrial complex in Durban, for R30 million, and Hatfield Square in Pretoria for R50 million.

Last week the company announced that it had bought Allcare House in Grayston Drive in Sandton from Allcare Administrators for R34.5 million.

Redefine has started shifting its weighting more towards directly held properties and away from investments in other listed property companies.

Azizollahoff said this had changed the investment split between directly held and listed property from 40:60 at the end of the 2003 financial year to 60:40 at the end of the 2004 year.

He said the shift was made because directly held properties currently offered better value than listed property on average.

Redefine's recent sale of listed stakes, which included Grayprop and Growthpoint, were done at an average income yield of about 10.4 percent, while investments in directly held properties were made at yields of between 11 percent and 12 percent.

Redefine's total property assets are valued at about R3 billion.

The group's portfolio is made up of 55 percent commercial, 30 percent retail and 15 percent industrial. The average vacancy rate has come down to 5 percent.

"The vacancies are mainly in the office portfolio. As for industrial properties, there are almost no vacancies, which can be attributed to the general shortage in industrial space, especially for larger units in the good industrial townships."

Redefine dipped 2c to close at R2.75 yesterday. The real estate sector gave up 0.36 percent.