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Redefine International Update on AUK Progress
REDEFINE INTERNATIONAL P.L.C.
(Incorporated in the Isle of Man)
(Registered number 010534V)
LSE share code: RDI
JSE share code: RPL
ISIN: IM00B8BV8G91
(“Redefine International” or “the Company”)
REDEFINE INTERNATIONAL UPDATE ON AUK PROGRESS
Redefine International, the opportunistic income focused FTSE 250 UK-REIT, is pleased to announce good progress ahead of
initial expectations on asset management initiatives on its recently acquired Aegon UK (“AUK”) portfolio.
Following the EU referendum result, the Company has completed two encouraging leases totalling £0.6 million which
represents a 10% increase on ERV. Since exchanging contracts on the AUK portfolio in September 2015, the Company has
increased the AUK portfolio’s WAULT from 7.5 years to 8.0 years, saved £0.3 million in vacancy costs and achieved an
additional uplift of £0.6 million to annualised rental income, representing a 5% increase on ERV.
Mike Watters, CEO of Redefine International commented:
"We firmly believe the diversified nature of the Redefine International portfolio, with 21% of market values located in
Germany, together with our income focus and long average lease length will prove to be defensive in light of the uncertainty
following the UK’s vote to exit from the EU. We remain comfortable with our debt profile with an average debt maturity of 7.4
years and no significant debt maturing until 2020. Completed refinancing activities post our half year results have reduced the
cost of debt to 3.4% from 3.6%.
“We are pleased with the level of income enhancing activity achieved on the AUK portfolio to date with this early success
improving the quality of our portfolio and our ability to deliver our income focused total return strategy going forward.”
AUK London offices:
At 127-133 Charing Cross Road, adjacent to the new Crossrail development and Tottenham Court Road Elizabeth Line Station,
the Company has completed two rent reviews to Three Monkeys and Superdrug on 12,524 sqft totalling £0.8 million
representing a 29% increase on passing rent.
The Company sees significant reversionary potential for the asset based on recent letting activity in the immediate area. In the
longer term the property presents a development opportunity with nearby properties securing planning permission for schemes
totalling as much as 12 floors.
AUK Regional offices:
- At Lochside, Edinburgh, Origa has taken 11,202 sqft of vacant space on a 15 year lease, with a 10 year break, for £0.2
million, which is 2.1% ahead of ERV and means the property is now fully let saving an additional £0.1 million in void
costs
- At the Omnibus building in Reigate, Deutsche Leasing has signed a 15 year lease, with a 7.5 year break, on 11,015 sqft of
vacant space at an annualised rent of £0.3 million, 10.1% ahead of ERV. 40% of the vacant space on acquisition has now
been filled, saving £0.1 million in void costs
The portfolio presents an immediate income opportunity through removing the residual vacancies in the Manchester, Leeds and
Reigate offices totalling 47,614 sqft. Across the remainder of the portfolio the Company has identified a number of
opportunities to regear leases increasing both the lease term and rental income.
AUK Retail Parks:
National retail park vacancies are at a 14 year low, which is evident across all our retail parks with demand exceeding available
space.
- At Banbury Cross Retail Park the property is now 98% let following a successful reconfiguration of the Harveys unit to
free up available space:
- Tapi has agreed a 10 year lease on a vacant 4,998 sqft unit for £0.1 million, which is 2.3% above ERV
- Poundstretcher has agreed a 10 year lease on 10,056 sqft for £0.2 million which is 2.2% ahead of ERV
- Since the EU referendum result, DFS has signed a 10 year renewal on 20,056 sqft of space at £0.3 million which is
4.9% above ERV
The latter two leasing transactions, despite agreed at rents below passing, are both above ERV and ahead of business plans
made on acquisition which will support valuations.
- At Queens Drive, Kilmarnock, the Company has achieved full occupation following a 10 year £0.2 million lease agreement
with Smyths Toys in line with ERV on a vacant 15,000 sqft unit
The Company is assessing a number of opportunities across the portfolio’s retail assets to add additional space and enhance the
tenant mix to drive footfall, including the creation of food and beverage pods together with a range of commercialisation
initiatives which have not previously been applied to the parks, to generate additional income.
AUK Logistics:
The Company has agreed four lettings which have increased the logistics portfolio WAULT by 36% to 7.0 years.
- At Camino Park, Crawley:
- Royal Mail has agreed a 10 year reversionary lease on 221,037 sqft with a break option in five years
- After the EU referendum result, DFS has signed a 10 year lease on 27,306 sqft at £10.25 per sqft, a 15.5% uplift to
passing rent and 14.6% above ERV
- At Express Park, Bridgwater, Exel has agreed a lease extension until 2019 on 133,550 sqft at £5.7 per sqft which is 8.6%
higher than ERV
- At Kingsthorne Industrial Park, Kettering, Rexson Systems has agreed a new 10 year lease at renewal on 12,737 sqft at
£0.1 million, which is 17.9% ahead of passing rent and in line with ERV
This reversionary portfolio is continuing to benefit from strong tenant enquiries which are expected to drive future rental
growth in the short to medium term.
For further information:
Redefine International P.L.C.
Michael Watters, Stephen Oakenfull, Janine Ackermann Tel: +44 (0) 20 7811 0100
FTI Consulting - UK Public Relations Adviser
Dido Laurimore, Claire Turvey, Ellie Sweeney Tel: +44 (0) 20 3727 1000
FTI Consulting - SA Public Relations Adviser
Max Gebhardt Tel: +27 (0) 11 214 2402
JSE Sponsor
Java Capital Tel: +27 (0) 11 722 3050
12 July 2016
Note to editors:
About Redefine International
Redefine International is an opportunistic, income focused FTSE 250 UK Real Estate Investment Trust (UK-REIT) committed
to delivering superior distributions to its shareholders throughout the property cycle. Our income driven total returns are
underpinned by a diversified portfolio, together with an efficient capital structure.
The continued transformation of both our corporate structure and asset base offer a solid foundation to drive further value. Our
opportunistic investment philosophy is to effectively allocate recycled capital from mature assets into sectors and locations with
strong occupier fundamentals and individual assets with realisable upside.
Our diversified portfolio, independently valued at £1.5 billion, is focused in Europe's two strongest economies, being the
United Kingdom and Germany. The portfolio is weighted towards well located properties across a range of sectors, including
retail, offices, distribution and hotels, which benefit from strong demand and from which we believe we can capture income
and value growth by attracting high calibre occupiers on long leases.
Currently our secure income stream is supported by a diversified portfolio and tenant base, with a WAULT of 8.1 years
complemented by an average debt maturity of 7.4 years of which over 90% of interest costs are either fixed or capped.
We hold a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange and are
included within the FTSE 250 and EPRA indices.
For more information on Redefine International, please refer to the Company’s website www.redefineinternational.com.
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