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Johannesburg - JSE-listed property loan-stock company Redefine Income Fund (RDF) expects 2008 to be tougher than 2007.
Addressing shareholders at the company's annual general meeting (AGM) on Friday, acting chairperson Wolf Cesman said Redefine had done well in 2007 but that this didn't mean Redefine "was unaffected by the tough market conditions".
"The business' potential looks good, but the continued rise in interest rates makes buying property more difficult," said Cesman. Redefine currently has a property portfolio valued at R5.05bn.
Just as a shareholder asked whether the power failures that were gripping the country presented an opportunity for Redefine, the lights went out at Rosebank, Johannesburg venue where the AGM was held.
'Can't we make more money?'
"Can't we make more money out of the power failure by installing generators in our properties so that we can charge our tenants for the services?" the shareholder asked.
CEO Brian Azizollahoff said this was an opportunity, but large generators are prohibitively expensive to buy and maintain: "To buy a generator for a 53 000m² building will cost us R17m and to maintain it will cost R11 000 a month without switching it on."
Availability of generators that are big enough to cope with keeping all of a building's electrical needs up and running at the same time is also a problem, said Azizollahoff.
The smaller-sized generators currently available are only able to provide enough power to support key equipment, such as computers or refrigerators.
Azizollahoff said, however, that gas and diesel generators could be "a perfect solution" to retailers' power problems. In financial 2007, Redefine derived 28% of its revenue from retail properties in its portfolio.
Shopping centres in the portfolio include South Coast Mall in Shelly Beach, KwaZulu-Natal and Sable Square in Century City, Cape Town.
Resolution withdrawn
The resolution that gives general authority to the directors to issue up to 5% of the authorised but unissued linked units for cash was withdrawn.
Fin24 has noted since October 2007 that some shareholders continue to have a problem with this resolution. At Amalgamated Electronic Corporation (Amecor) AGM last year, this resolution was not passed.
Another resolution that normally gets little support from minority shareholders is that which deals with the placement of unissued linked units under directors' control. This was was passed with a 76.5% majority.
- Fin24