November 6 2023
Redefine Properties, one of SA’s largest landlord aims to grow its personal storage business to be worth at least R2bn in five years’ time. CEO Andrew Konig explained this after releasing financial results to the year to end-August 2023.
Redefine (JSE:RDF) and Polish group, Griffin Capital Partners, which is a private equity group set up a joint venture to acquire Stokado, they said in April 2023. Stokado is Poland’s second largest personal storage operator.
Redefine which has a market capitalisation of about R25bn, was listed in 2000. Today it has investments in South Africa and Poland. The company first invested in the east European country in 2016 and the group believes that its investments there will help drive it to success when the listed sector turns for the better.
Listed property groups have been under pressure amid high interest globally. These are starting to ease in Poland.
Redefine owns EPP, Poland’s largest mall owner as well logistics assets in eastern Europe’s largest economy. The group announced earlier in 2023 that it would invest in personal storage in Poland which is a sector in its infancy. Personal storage is gaining in popularity among western sand eastern Europeans. JSE-listed German property owner, Sirius Real Estate for example has been investing in a personal storage business for a number of years.
Poland’s economy is expected to grow at 2.7% in 2024.
“We believe that our investing strategy is holding up well. A number of landlords are battling through a lot of pain right now with a difficult economic environment, made tougher by very high interest rates. We took a lot of this pain when we sold certain non-core assets before the Covid-19 pandemic and exited investments which would no longer add value to us. Currently, we are not invested in other listed groups for example as we want to have direct management control over our investments,” said Konig.
The Stokado pipeline will run for five years. Redefine will consider bringing in equity partners for Stokado in the future.
“Personal storage is a new industry in Poland. We are excited to be a part of it as it grows in an economy with powerful fundamentals,” Konig said.
In the year under review, Redefine’s assets increased to R99.4bn from R92.4bn a year earlier. Occupancy levels in South Africa were 93%, slightly down from 93.3% a year earlier. Occupancy in Poland was 98.4%, up from 96.5% in the 2022. To cushion tenants from load-shedding and improve its green footprint, Redefine is adding 9.5MW of solar capacity, increasing its installed capacity to 46.4MW; the largest footprint in the country for a landlord.
Distributable income of R3.5bn, representing distributable income per share of 51.53 cents for the year ended 31 August 2023, was earned, higher than the midpoint of the company’s guidance range of between 48 and 52 cents. The group had a well-diversified asset portfolio that grew R7.9bn during the year to a current value of R96.8bn. A full year dividend of 43.80 cents per share was declared, increasing from 42.97 cents per share in financial year 2022, which signaled a healthy liquidity position. Earnings guidance for the 2024 financial year remains flat between 48 and 52 cents per share. Old Mutual Investment Group’s boutique property funds head, Evan Robins said the market had taken Redefine’s results in its stride.
alistair@propertyflash.co.za
