August 31 2026 17:30
Redefine Properties which is SA’s second largest home-based property group said at a capital markets presentation last week that it has positioned assets for a market in which long-term structural shifts are expected to have a greater influence on returns than the traditional property cycle.
It said that consumer-driven assets now account for 74% of the group’s asset base, reflecting a deliberate strategy to align capital with areas supported by long-term demand and everyday economic activity.
Speaking at the 2026 Capital Markets Day, CEO Andrew König said Redefine was focused on responding to the forces reshaping how people live, work, shop and use commercial space. These include demographic shifts, energy security, climate resilience, artificial intelligence and changing patterns of consumer behaviour.
Redefine has centred its strategy on three priorities: strengthening real estate fundamentals, building confidence and accelerating technological adoption. Together, these priorities are shaping where the group allocates capital, how it manages its assets and how it positions the portfolio for sustainable growth.
König said the operating environment as a recurring game of snakes and ladders, where geopolitical events, economic shocks and policy developments can quickly alter market sentiment and reset growth expectations. While these events often dominate headlines, Redefine believes the more significant drivers of long-term value creation lie in the structural changes unfolding across economies and industries.
“Durability is not built in a crisis; it is revealed in one,” König said.
In South Africa, this strategy was increasingly expressed through investments in convenience retail, township and rural retail centres, industrial and logistics assets and energy infrastructure. These are sectors where Redefine continues to see resilient demand fundamentals and opportunities for long-term income growth.
Within the retail portfolio, grocery and apparel categories continue to underpin turnover growth, while restaurants are benefiting from the recovery of large-format centres and growing demand for experiential retail. Retailers also continue to invest in physical stores despite the growth of e-commerce, particularly in grocery, pharmacy and value retail formats, reinforcing the conviction in well-positioned brick-and-mortar assets.
Redefine’s response is focused on active asset management rather than simply maintaining existing space, the group said. The group is planning approximately 18,700m² of store optimisation initiatives during 2027, while 28,900m² of grocer upgrades are scheduled across the portfolio as part of a broader programme to improve tenant performance, enhance customer experience and support long-term rental growth.
National retailers occupy approximately 72% of retail GLA, while grocers and pharmacies account for 20% of GLA and 16% of gross monthly rental income.
Within the industrial sector, Redefine is expanding its exposure to logistics-led assets while pursuing development opportunities, wheeling infrastructure and energy projects that can unlock additional value from existing properties. Demand for well-located logistics space remains strong, supporting the group’s ongoing repositioning towards higher-quality industrial assets.
Internationally, Redefine’s focus was on opportunities where it can actively create value while improving capital efficiency.
In Poland, this has included the continued simplification of joint-venture structures, the recycling of non-core assets and the expansion of emerging asset classes such as self-storage and mini-units. Redefine’s capital-allocation framework identifies both sectors as attractive long-term growth opportunities in a market that remains relatively underpenetrated compared with Western Europe. Potential capital uplifts of 77% for self-storage developments and 55% for mini-unit developments illustrate the scale of the opportunity within these formats.
Energy security is increasingly influencing both operating costs and tenant demand. Redefine said it responded through a multi-year investment programme focused on embedded generation, wheeling, storage and broader energy resilience. Local solar photovoltaic capacity has grown to 65.3MWp, compared with 40.3MWp in FY23, with a further 5.6MWp currently in progress.
By 2028, Redefine expected approximately 40% of its electricity demand to be met through renewable energy sources, incorporating a combination of embedded solar, traditional wheeling, virtual wheeling and generator-based wheeling arrangements. Currently, approximately 23% of energy demand is already met through renewable sources.
The group is also investing in battery energy storage systems, with a first phase comprising 20 buildings and 20MWh of storage capacity. The programme is expected to generate first-year savings of approximately R19 million and a projected first-year return on investment of 16.9%.
The group’s investments also extend to water management, supported by a target to reduce portfolio-wide water withdrawal by 10% by 2030 through smart monitoring, leak detection and efficiency interventions.
Technology was used to improve tenant engagement, operational efficiency and decision-making across the portfolio. AI adoption among employees has reached 76%, supported by organisation-wide deployment of AI-enabled tools.
The focus is no longer on experimentation but on implementation, Redefine said. Redefine introduced AI-enabled retail websites, automated facilities-management workflows, digital engagement tools and data-driven platforms designed to make it easier for stakeholders to interact with the business.
Since September 2025, AI-enabled systems have supported more than 47 000 secured payment transactions, while more than 108 000 facilities-management workflows have been automated since March 2024. AI-generated lead-generation initiatives have also produced hundreds of qualified leads for vacant space.
The group said these technologies can improve productivity, strengthen stakeholder experiences and create a more efficient operating model across the portfolio.
Supporting these initiatives is a focus on balance-sheet strength, funding flexibility and disciplined capital allocation.
“Maintaining financial flexibility is critical to executing our strategy through different market cycles,” said Ntobeko Nyawo, Redefine’s CFO. “Our focus remains on strengthening the balance sheet, broadening sources of capital and ensuring that we retain the capacity to invest in opportunities that support long-term growth,” he said.
Redefine’s see-through loan-to-value ratio improved from 47.3% at the end of the 2025 financial year to 45.1% by the third quarter of its 2026 financial year, while ongoing efforts to simplify Polish joint ventures and recycle non-core assets are expected to support further improvement over time.
The group has also continued to broaden its funding base, refinance debt on more favourable terms and improve debt margins across both South African and Polish operations. Green funding now accounts for approximately 38% of total group debt, while reduced funding margins are contributing to meaningful savings and improved earnings quality.
Operational efficiency gains are also beginning to translate into stronger profitability. Group net operating profit margin improved from 76.5% to 77.2%, as it continues to work towards its medium-term objective of achieving operating margins above 80%.
Redefine’s improving property fundamentals are translating into tighter guidance of 6.5% to 7.0% growth in distributable income per share, despite continued macro-economic volatility, it said. This was higher than South Africa’s headline annual consumer price inflation which cooled to 4.3% in July 20216, down from 5.0% in June 2026
With distributable income growth expected to be at the upper end of guidance for the 2026 financial year, Redefine said the combination of disciplined capital allocation, proactive sourcing of capital, operational efficiency and targeted investment is creating a more durable growth platform.
alistair@propertyflash.co.za
