Geopolitical tensions, policy uncertainty and shifting consumer behaviour are forcing real estate investment trusts (REITs) to rethink traditional growth strategies, with Redefine Properties positioning itself for a more defensive and flexible future.
At its Capital Markets Day, the property group outlined plans to strengthen portfolio resilience as changing market conditions continue to reshape demand across the retail, office and industrial property sectors.
Redefine manages a R101-billion property portfolio concentrated mainly in Johannesburg and Cape Town. Its assets include Mall of the South, Centurion Mall, Cradlestone Mall and the Alice Lane Precinct.
Chief executive Andrew König said the company has faced mounting pressures from elevated interest rates, rising operating costs, sluggish economic growth and ongoing uncertainty across its markets.
These challenges have prompted a strategic shift away from relying solely on traditional rental income growth toward investments that improve operational resilience and unlock new value streams.
Alternative property formats offer growth potential
A key component of Redefine’s strategy is expanding into alternative property formats that align with changing consumer needs and usage patterns.
König said the company sees significant opportunities in self-storage and mini-unit developments, sectors that are experiencing increased demand as consumers and businesses seek more flexible space solutions.
According to Redefine, self-storage developments could deliver potential capital uplifts of up to 77%, while mini-unit developments could generate capital growth of approximately 55%.
The focus reflects a broader trend across the REIT sector, where property owners are increasingly required to anticipate how consumers shop, work, store goods and access services.
Rather than relying exclusively on conventional rental growth, landlords are being compelled to innovate and adapt their portfolios to remain competitive.
“In terms of stakeholder engagements, for us it is understanding your wants and clearly we need to define what matters too,” König said.
Energy security becomes a strategic priority
Beyond portfolio diversification, Redefine has identified energy security as a critical area of investment as power costs, supply disruptions and infrastructure constraints continue to affect both operating expenses and tenant expectations.
The company has significantly expanded its renewable energy programme, increasing its local solar photovoltaic generation capacity to 65.3MWp from 40.3MWp in the 2023 financial year. A further 5.6MWp of solar capacity is currently under development.
Redefine is also investing in battery energy storage systems to strengthen energy resilience across its portfolio.
The first phase of the battery programme will cover 20 buildings and provide 20MWh of storage capacity.
According to the company, the initiative is expected to generate approximately R19-million in savings during its first year while delivering a projected first-year return on investment of 16.9%.
Building resilience for future market cycles
Redefine’s latest strategy signals a growing focus on flexibility, sustainability and operational efficiency as the property sector adapts to a more complex economic environment.
By investing in alternative property formats and strengthening energy resilience, the group aims to position its portfolio for long-term growth while reducing its exposure to traditional market pressures and economic volatility.
- Redefine Properties is shifting its strategy from traditional rental income growth to investments that enhance operational resilience and unlock new value streams amid geopolitical tensions, policy uncertainty, and changing consumer behavior.
- The company plans to expand into alternative property formats such as self-storage and mini-unit developments, which could yield potential capital uplifts of up to 77% and 55%, respectively.
- Redefine's property portfolio, valued at R101 billion, is mainly concentrated in Johannesburg and Cape Town and includes assets like Mall of the South, Centurion Mall, Cradlestone Mall, and the Alice Lane Precinct.
- The group has increased its solar photovoltaic capacity from 40.3MWp to 65.3MWp during the 2023 financial year and is developing an additional 5.6MWp, alongside investing in battery storage systems providing 20MWh across 20 buildings.
- The battery energy storage initiative is projected to save approximately R19 million in its first year and deliver a 16.9% return on investment, enhancing energy resilience and reducing operating costs.
