Redefine Properties has disposed of 11 properties valued at R1.1 billion for the year ended August 31 as the property group’s total asset value declined to R102.1 billion from R103.2 billion in the previous year.
According to the group, the disposals formed part of the group’s portfolio management strategy, which also included selling vacant land for R52.8 million and its remaining 20 residential units at Park Central for R38.4 million.
READ: Redefine reworks R101bn portfolio to weather market shocks
In the financial results released on Monday, Redefine said the 11 properties sold had a combined gross lettable area of 93 472m². The group has also concluded agreements, subject to the fulfilment of normal conditions, to sell two office properties and one retail property for a further R180.1 million.
While the disposals reduce the group’s property holdings, Redefine invested in its remaining portfolio through developments, refurbishments and redevelopments aimed at improving the performance and long-term competitiveness of its properties.
“Agreements subject to the normal conditions precedent have been concluded to dispose of two office properties and one retail property for an aggregate consideration of R180.1 million,” reads the financial results.
The group also completed several redevelopment projects including an industrial redevelopment at Golf Air Park I, now known as Skyhawk Park. The R186 million project delivered an initial yield of 9%.
Other completed projects included the redevelopment of Park Meadows at a cost of R62 million and the repurposing of the former Ster-Kinekor space at East Rand Mall, in which Redefine holds a 50% share, at a cost of R37.5 million.
Tenant arrears declined to R144.8 million from R175.1 million, while the expected credit loss allowance decreased to R70.4 million from R94 million.
READ: Greenstone Mall ends Ster-Kinekor lease amid operational woes
The group’s operating performance, now at 77% increasing from 72.6% in the same period last year, showed improvements in its retail and office portfolios, while industrial properties continued to contribute to rental income growth.
Retail recorded active net property income growth of 6%, compared with 5.7% in the previous financial year. The improvement was supported by stronger lease renewals, tenant retention and lower net electricity costs following the addition of solar capacity.
Industrial properties remained an important contributor to the group’s portfolio, recording active net property income growth of 6.3%, although this was lower than the 12.3% achieved in the previous year. The vacancy rate increased marginally to 2.8% from 2.7%.
Redefine is also directing capital towards expanding its existing property holdings. Four industrial developments are under way at a combined cost of R440.5 million. The projects are expected to add 70 697m² of gross lettable area and generate an average initial yield of 8.6%.
An additional office development at Hertford Office Park is expected to cost R65.5 million and deliver an initial yield of 9.6%, adding 2 229m² of lettable space.
- Redefine Properties has disposed of 11 properties valued at R1.1 billion for the year ended August 31 as the property group’s total asset value declined to R102.1 billion from R103.2 billion in the previous year.
- According to the group, the disposals formed part of the group’s portfolio management strategy, which also included selling vacant land for R52.8 million and its remaining 20 residential units at Park Central for R38.4 million.
- READ: Redefine reworks R101bn portfolio to weather market shocks In the financial results released on Monday, Redefine said the 11 properties sold had a combined gross lettable area of 93 472m².
- The group has also concluded agreements, subject to the fulfilment of normal conditions, to sell two office properties and one retail property for a further R180.1 million.
- While the disposals reduce the group’s property holdings, Redefine invested in its remaining portfolio through developments, refurbishments and redevelopments aimed at improving the performance and long-term competitiveness of its properties.
