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PLS REDEFINE INCOME FUND LIFTS NAV BY 42 CENTS ONE YEAR AFTER LISTING

Release Date: 14/02/2001 16:07
Code(s): RDF
Wrap Text
REDEFINE INCOME FUND LIMITED
NEWS RELEASE
WEDNESDAY, FEBRUARY 14, 2001

PROPERTY LOAN STOCK COUNTER REDEFINE INCOME FUND LIMITED LIFTS NAV BY 42 CENTS ONE YEAR AFTER LISTING
AN increase of 42 cents in net asset value is a welcome anniversary benefit for investors in the R1,3-billion Redefine Income Fund exactly one year down the road from listing on the Johannesburg Securities Exchange on February 23, 2000. Redefine is the only hybrid listed property loan stock (PLS) company, with a portfolio now comprising R609-million in 59 directly-owned properties and R704-million in 12 listed PLS and property unit trusts (PUTS).
Redefine chief executive Peter Penhall said the increase in NAV has come mainly through the exceptional performance and re-rating by the investment market of the core PLS and PUT counters in which Redefine has a substantial stake, which boosted Redefine's investment base from an original R604-million to R704-million.
These are PLS Hyprop (up from a standing cost of R124-million to R161-million); PUT Grayprop (R79-million to R102-million); and PUT Sycom (R56-million to R76-million), with all but one of the listed counters returning positive growth Penhall said: "What we have seen is capital appreciation of 60 percent in our 'paper' investment and an increase in net asset value of 42 cents per linked unit. This translates into NAV of R2,42 per linked unit.
"We have also seen an increase in the value of our of directly-owned property portfolio, although this has not been taken into account in the current NAV assessment."
Redefine is due to publish its interim results in March and the counter remains on track in delivering a 17 percent investment return on the listing price of R2,00, paid quarterly, a feature which, together with the A+ Fitch investment rating, separates Redefine from the other PLS and PUT counters in the Real Estate sector.
The interim accounts will reflect conversion of a percentage of deferred debt from interest free to interest bearing status.
Penhall said: "About half of the deferred payments will be comfortably brought to account and we are confident that growth in earnings during the next 12 months will absorb the cost and maintain projected growth."
He said: "Performance in our first year of operation fully vindicates the hybrid concept of investment in roughly equal proportion: directly in bricks and mortar and indirectly through equity.
"Historically, contributions to revenue have been on a 50-50 basis between direct and listed property investments."
"At listing, we pioneered a totally different investment concept for real estate investment which has helped deliver perceptions that property is becoming an exciting investment medium again."
"Nevertheless, it is easy to understand that the market has bided its time in rating Redefine until there was a track record against which it can be judged." "On the basis of our first year, we can say that the hybrid concept really does work. We fully expect to see a re-rating of Redefine once constant performance has been demonstrated through the publication of its annual results.
"Also, in terms of our pre-listing objective of making Redefine one of the most liquid of property investments, we have been encouraged by the trading volumes in Redefine linked units, which has averaged R7-million- R8-million a month in the last three-four months. There has also been a noticeable pick-up in investment by private investors."
He pointed out that there were questions regarding the real estate sector's excessive exposure to the retail industry and an over-supply of office accommodation in key business nodes.
"It should be borne in mind that our geographic spread of properties covers 715 properties and more than 13 000 tenants, so we are better able to absorb the knocks that may arise from changes in the economy," Penhall said.
Refer to www.redefine.co.za for fuller information. End
Note: At August 31, 2000, year-end net asset value was 198.86 cents per linked unit. Enquiries: Peter Penhall: (011) 283-0110 Far Out Communication cc Communication and Editorial Practitioners
Office: 10 Rembrandt Plaza, 286 Lister Road, Rembrandt Park, 2090 Telephone: 27 11 346-2666 Fax: 27 11 346-0290 email: manucomm@iafrica.com Home: 27-11 882-4446 286 Pasteur Road Rembrandt Park 2090

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