Redefine Income Fund Limited - Acquisition of Rand Leases Portfolio of

Redefine Income Fund Limited - Acquisition of Rand Leases Portfolio of          
Investment Property.                                                            
Redefine income fund Acquires Rand Leases Property Portfolio for R349,5-million 
- boosts total hybrid asset base to R2,2-billion                                
PROPERTY loan stock company Redefine Income Fund today announced that           
negotiations had been concluded for wholly-owned subsidiary Outward Investments 
to acquire from Rand Leases Properties (RL Props) a portfolio of 27 investment  
properties for R349,5-million.                                                  
Redefine CEO Peter Penhall said: "It`s a win-win result for Redefine, for RL    
Props, and for the linked unit holders of both companies.                       
"We take over RL Props` loans and ownership of a portfolio of well-tenanted     
mainly A-Grade income-generating properties which offers ample scope for both   
income and asset growth under our management to the benefit of our linked unit  
holders.                                                                        
"We retain an interest in RL Props while reducing our exposure to the property  
development business. As we will be liquidating outstanding mortgages over the  
properties, RL Props itself will have zero gearing and a highly liquid asset in 
the form of Redefine linked units, and the means to focus on its operational    
strength of land and property development.                                      
"The R L Props linked unit holders gain in that the net asset value after loans 
represented by the investment property portfolio is replaced with Redefine      
linked units, thereby increasing the company`s asset liquidity," Penhall said.  
The transaction lifts the value of Redefine`s property portfolio from R808-     
million to R1,2-billion which, with investments in other listed securities,     
raises the total hybrid asset base from R1,9-billion to R2,2-billion.           
Penhall said the acquisition was an admirable fit as it comprised prominently   
located commercial office blocks with single or multi-tenanted occupancies.     
There are also three retail centres: the Post House and Wedge Shopping Centres  
in the Bryanston Wedge growth area and the Corporate Park Shopping Centre in    
Midrand.                                                                        
"There is a good geographic spread with no undue exposure in any one area,"     
Penhall said.                                                                   
With one exception, leases were to a large degree for three to five years and   
longer. Vacancies represented 4,5 percent of gross lettable area, and had been  
partially discounted in the purchase price.                                     
The purchase consideration is to be settled by way of R6-million cash paid into 
a trust account; cash amounting to a maximum R267-million required to settle any
outstanding mortgages; and the issue of Redefine linked units (described as     
`consideration units`) to Rand Leases and its property owning subsidiaries at an
issue price of R2,47 each, on the transfer date of each property, subject to a  
Rand Leases `buy-back`  obligation.                                             
As part of the transaction, Rand Leases has agreed to re-purchase from Outward  
Investments 14-million Rand Leases linked units. This buy-back is to be set off 
against Redefine`s obligation to allot `consideration units` in a ratio of one  
unit for every 1,6 Rand Leases linked unit repurchased.                         
Penhall said the short-term influence on Redefine`s net asset value was         
marginally dilutionary:  pro forma historical NAV before the acquisition (at    
financial year-end August 31, 2002) stood at 244 cents per linked unit against a
NAV of 243,23 cents after the acquisition, based upon historical performance of 
the acquired portfolio.                                                         
Within this framework (the inclusion of the acquired portfolio), restated       
historical earnings reflected growth of 12,72 percent from 8,52 cents per linked
unit to 9,60 cents per linked unit but headline earnings showed a 3,94 percent  
decline from 37,07 cents per linked unit compared with 35,61 cents per linked   
unit.                                                                           
Penhall said: "The dilutionary effect of the transaction will be minimised going
forward. Our extensive due diligence has pointed to areas that will be addressed
to add value to the portfolio and to improve revenue and yield in the short to  
medium term. All in all, this is a good deal for both Redefine and R L Props and
is in keeping with our investment strategy to steadily grow the asset base and  
strengthen earnings."                                                           
The acquisition is subject to, among other conditions, to the agreement of      
linked unit holders of both companies and obtaining approval from the           
Competition Commission by not later than December 15, 2002.                     
The cautionary notice has been withdrawn.                                       
Date: 11/10/2002 11:11:29 AM Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department