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Nick Wilson

Property Correspondent

LISTED property loan stock company Redefine recorded a total return of 91% last year, the highest in the listed property sector, Catalyst Fund Managers said.

Total return combines unit price movement and distribution growth. Redefine also reported 15% growth in distribution for the year to August last year.

Catalyst Fund Managers MD Andre Stadler said Redefine’s total return performance was due in part to strong levels of distribution growth, together with expectations of continued strong growth and "recovery in sentiment to Redefine after the distribution disappointment of 2003".

In 2003 Redefine reported a significant drop in distributions because of its exposure to the then poorly performing Arnold Property Fund (A-Prop).

Redefine CEO Brian Azizollahoff said the company’s growth in capital value was a function of growth in distributions and the low interest rate environment.

"As interest rates have dropped, income yields have dropped and capital values have increased," he said.

"The growth in distribution is due to improved rentals, letting of vacant space, tenant retention, control of expenses, the acquisition of yield-enhancing investments and lower cost of borrowings," said Azizollahoff.

"Redefine is looking at the opportunity of getting involved in an offshore fund. This would give us diversification."

Catalyst Fund Managers also said the South African Listed Property Index recorded a total return of 50,04% last year, making it the third year the index delivered a total return of more than 40%. In 2003 the index recorded a total return of 41% and in 2004 it increased it to 41,26%.