Redefine Income Fund Limited - News Release

Redefine Income Fund Limited - News Release                                     
Redefine Income Fund Limited                                                    
Redefine income fund`s 2002 year-end results shine in prevailing negative gloom 
about property sector investments                                               
IN a productive financial year ended August 31, 2002, property loan stock       
company Redefine Income Fund achieved its earnings and growth projections, and  
increased linked unit distributions.                                            
The hybrid asset base grew to R1,9-billion, with the property portfolio standing
at R808-million and the listed securities portfolio at R1,1-billion.            
Turnover increased 16 percent from R214,2-million to R248,8-million, with       
property delivering R106-million and listed securities R142-million.            
Year-end net asset value was R2,44 per linked unit.                             
The income fund declared a final quarterly distribution of 9,5 cents per linked 
unit.                                                                           
This brought total distributions for the year to 37 cents per linked unit, a 5,7
percent increase on the prior year`s return of 35 cents.                        
CEO Peter Penhall said: "The very satisfying results announced today flow from  
investment strategies we implemented during the year that resulted in total     
investment asset growth of 40 percent, funded by a combination of debt and the  
issue of additional linked unit capital."                                       
Penhall said performance departed from the generally gloomy view of the property
investment sector and a trend of declining or muted earnings that prevailed in  
2002.                                                                           
He attributed this to the inherent benefits of a hybrid income fund deriving    
revenue from directly-held property and from investments in listed property loan
stock and property unit trust companies.                                        
"Within this model, we had the flexibility to take quick advantage of           
opportunities that arose through either property acquisitions or by way of      
capital re-alignment within the listed securities in which we are invested."    
more                                                                            
On interest rate increases, Penhall said hedging mechanisms introduced in the   
previous financial year had shielded Redefine`s distributable income.           
Penhall said: "We have achieved an average annual blended cost of long term     
borrowings of 13,8 percent by entering into a series of interest rate hedges and
linking the cost of long-term finance to long bond yields.                      
"We are currently negotiating to extend Redefine`s interest rate hedging levels 
and term."                                                                      
Property portfolio                                                              
Penhall said an important development was an independent valuation of the 62-   
unit property portfolio at R808-million, an increase in value of R9-million,    
based on a sound lease expiry profile, with 44 percent of contractual income    
secured beyond August 2007.                                                     
"As a result of our focus on tenant retention and increased leasing activity, 30
percent of leases expirying in financial year 2003 have already been secured, or
are under firm negotiation."                                                    
Redefine sold two properties deemed to be non-core and acquired 23 for a net    
purchase consideration of R353-million. Penhall said the additions, mainly well-
located A-grade commercial and retail properties with quality tenants on long   
leases, had further enhanced the lease and risk profile.                        
Vacancies of lettable area amounted to 6,8 percent of the property portfolio."  
Listed securities portfolio                                                     
Penhall said that listed securities portfolio had not escaped the negative re-  
rating of the listed property sector, borne on pessimistic foreign business     
sentiment and interest rate increases.                                          
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"There was a reduction in value of the listed securities portfolio of R84-      
million. We have accounted for this through the income statement as a capital   
item against previously created non-distributable reserves."                    
Penhall said: "Against negativity perceptions, we were encouraged by the rising 
yields of listed property counters, and employed capital realignment strategies 
to increase our holdings in six counters and to reduce overall exposure in five 
others."                                                                        
He said investment in S A Retail Limited acquired from Sanlam Investment        
Managers had the double benefit of providing increased exposure to the retail   
property sector and broadening Redefine`s institutional shareholder base.       
At year-end, Redefine held investments in 12 listed counters with a total market
value of R1,1-billion.                                                          
Redefine`s steadily growing income delivery every quarter is recognised by the  
high level of interest in Redefine linked units, with liquidity in trades on the
JSE Securities Exchange being sustained at 54 percent of `free float`, and an   
average monthly trade volume of 8,5-million linked units. During the year, as   
part of capital realignment and asset growth policies, 84-million linked units  
were issued, increasing the total in issue to 321-million linked units.         
Penhall said: "Subject to volatility in interest rates, we anticipate growth in 
distributions to linked unit holders. Our eventual target of total market       
capitalisation in excess of R1-billion should further enhance tradability of    
Redefine`s linked unit capital."                                                
The financial year closed with negotiations under a joint cautionary            
announcement, issued with Rand Leases Properties, still in place.               
Penhall said these were at an advanced stage.                                   
Ends                                                                            
Contact: Peter Penhall                                                          
Office:  011 283-0031                                                           
Cell:    083 448 0045                                                           
Website: http://www.redefine.co.za                                              
Date: 03/10/2002 10:02:00 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department