Redefine merger pays off

Johannesburg - On Wednesday Redefine announced a consolidated distribution of 11.75c per linked unit for the two months to end-August.

This distribution is marginally higher than the revised forecast of 11.7c released in March.

Anton de Goede, property portfolio manager at Coronation Fund Managers, says it appears that the original ApexHi property portfolio has had a positive impact on distribution growth, especially against the background that the Redefine distribution has underperformed in the past 10 months.

The total distribution for the year to end-August amounts to 56.55c per linked unit, slightly less than the total distribution of 56.63c per linked unit for the previous year.

Wolf Cesman, joint chief executive of Redefine, says the managements of Redefine, ApexHi and Madison have been successfully integrated and the benefits arising from savings in property management, administrative expenses and interest on loans could take longer to realise then initially expected, but the board expects the total distribution for the year to end-August 2010 to be between 68c and 71c per linked unit.

This represents an increase of between 20% and 25%, compared with the 2009 distribution.

The property portfolio?s total vacancy rate is currently 8.5%, of which 10.8% is offices standing empty, 7.2% industrial property and 6.9% retail property.

De Goede says office occupancies are cyclical in nature and in a weaker economic environment office space will first come under pressure. But, he says, this holds positive revenue potential when the economy improves and should serve as a support base for the distribution growth forecast.

The R18.2bn property portfolio at the end of August comprised 403 properties with a overall gross rental space of 3.6m square metres. Offices represent 39% of this, retail 35% and industrial property 26%.

- Sake24.com

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