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REDEFINE PROPERTIES LIMITED - Audited Group results for the year ended 31 August 2012

Release Date: 01/11/2012 08:00
Code(s): RDF     PDF:  
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Audited Group results for the year ended 31 August 2012

REDEFINE PROPERTIES LIMITED 
(Redefine or the company or the group)     
Registration number 1999/018591/06
JSE share code: RDF    ISIN: ZAE000143178    
Bond code: RDFB01      ISIN: ZAG000094228   
Bond code: RDFC05      ISIN: ZAG000099516

Audited Group results for the year ended 31 August 2012

- Distribution in line with forecast
- Recurring core income up 7,2%
- Funding costs down by 70 bps 
- Quality of property portfolio improved
- Fountainhead ManCo acquired
- Successful RI restructuring

Consolidated statements of comprehensive income                                                                                                                                  
                                                                                     Audited            Audited       
                                                                                   31 August          31 August       
                                                                                        2012               2011       
                                                                                       R000              R000       
Revenue                                                                           
Property portfolio                                                                 3 289 183          2 754 905       
 Contractual rental income                                                        3 332 059          2 763 122       
 Straight-line rental income accrual                                                (42 876)            (8 217)      
Listed security income                                                               360 917            342 367       
Fee income                                                                           103 372            205 485       
Hotel income                                                                         286 266            157 628       
Trading income                                                                        12 414             36 556       
Total revenue                                                                      4 052 152          3 496 941       
Operating costs                                                                     (788 818)          (732 648)      
Administration costs                                                                (232 117)          (158 787)      
Net operating income                                                               3 031 217          2 605 506       
Changes in fair values of properties, listed securities and                       
financial instruments                                                                227 078            532 305       
Amortisation of intangibles                                                         (101 105)           (96 808)      
Impairment of financial assets, property, plant and equipment,                    
and goodwill                                                                                          (848 713)      
Equity accounted profits/(losses)                                                    105 629            (19 988)      
Income from operations                                                             3 262 819          2 172 302       
Net interest                                                                      (1 712 981)          (937 467)      
 Interest paid                                                                   (1 912 318)        (1 098 871)      
 Interest received                                                                  199 337            161 404       
Foreign exchange (loss)/gain                                                         (36 656)             1 649       
Income before debenture interest                                                   1 513 182          1 236 484       
Debenture interest                                                                (1 742 715)        (1 825 321)      
Loss before taxation                                                                (229 533)          (588 837)      
Taxation                                                                            (537 318)            25 575       
Loss after taxation                                                                 (766 851)          (563 262)      
 Attributable to Redefine unitholders                                               342 079           (519 311)      
 Attributable to non-controlling interests                                       (1 108 930)           (43 951)      
Other comprehensive income                                                           451 351            112 242       
Exchange differences on translation of international operations                      451 351            107 598       
Revaluation of PPE (net of deferred taxation)                                                            4 644       
Total comprehensive loss                                                            (315 500)          (451 020)      
 Attributable to Redefine unitholders                                               621 476           (267 349)      
 Attributable to non-controlling interests                                         (936 976)          (183 671)      
                                                                                                                                                                                                                                       
Consolidated statements of financial position                                                        
                                                                                      Audited           Audited       
                                                                                    31 August         31 August       
                                                                                         2012              2011       
                                                                                        R000             R000       
ASSETS                                                                                                                
Non-current assets                                                                 43 376 376        40 036 545       
Investment properties                                                              29 735 776        28 847 983       
 Fair value of investment properties for accounting purposes                      28 754 581        27 775 325       
 Straight-line rental income accrual                                                 651 223           694 099       
 Properties under development                                                        329 972           378 559       
Listed securities                                                                   5 341 485         4 664 346       
Goodwill                                                                            2 753 971         2 570 534       
Intangible assets                                                                   1 905 363         1 279 075       
Interest in associates and joint ventures                                           1 963 050         1 236 726       
Loans receivable                                                                    1 527 301         1 323 126       
Other financial assets                                                                  5 349            12 938       
Guarantee fees receivable                                                              50 000            21 349       
Property, plant and equipment (PPE)                                                    94 081            80 468       
Current assets                                                                      1 245 426         1 680 758       
Properties held-for-trading                                                            25 833            31 052       
Trade and other receivables                                                           678 791           742 665       
Guarantee fees receivable                                                              21 349                        
Loans receivable                                                                       12 546            51 210       
Listed security income                                                                155 574           195 683       
Cash and cash equivalents                                                             351 333           660 148       
Non-current assets held-for-sale                                                    2 134 453         2 646 183       
Total assets                                                                       46 756 255        44 363 486       
EQUITY AND LIABILITIES                                                                                                
Shareholders interest                                                             15 250 599        14 785 027       
Share capital and premium                                                          11 660 936        11 788 301       
Reserves                                                                            3 589 663         2 996 726       
Non-current liabilities  debenture capital                                         4 791 714         4 831 731       
Linked unitholders interest                                                        20 042 313        19 616 758       
Non-controlling interests (NCI)                                                     1 301 316         2 271 224       
Total unitholders interest                                                         21 343 629        21 887 982       
Other non-current liabilities                                                      15 259 932        17 962 566       
Interest-bearing liabilities                                                       12 648 732        16 166 163       
Interest rate swaps                                                                   468 064           358 090       
Other financial liabilities                                                            62 767            11 516       
Deferred taxation                                                                   2 080 369         1 426 797       
Current liabilities                                                                 8 921 389         4 425 577       
Trade and other payables                                                              953 012         1 037 126       
Interest-bearing liabilities                                                        6 793 374         2 158 496       
Interest rate swaps                                                                    72 046            49 074       
Other financial liabilities                                                            15 948                        
Provision                                                                             161 769                        
Taxation payable                                                                       28 078           187 691       
Linked unitholders for distribution                                                   897 162           993 190       
Non-current liabilities held-for-sale                                               1 231 305            87 361       
Total equity and liabilities                                                       46 756 255        44 363 486       
Net asset value per linked unit                                                                      
(excluding deferred tax and NCI)(cents)                                                801,40            783,95       
Net tangible asset value per linked unit                                                             
(excluding deferred tax and NCI) (cents)                                               632,62            640,54       
                                                                                                                                                                                                         
Condensed consolidated statements of cash flow                                                                        
                                                                                       Audited          Audited       
                                                                                     31 August        31 August       
                                                                                          2012             2011       
                                                                                         R000            R000       
Cash generated from operations                                                       3 124 033        2 819 012       
Net financing costs                                                                 (1 378 850)        (937 467)      
Linked unit distributions paid                                                      (1 838 742)      (1 288 461)      
Payments to non-controlling interests                                                  (92 860)         (47 969)      
Net cash (outflows)/inflows from operating activities                                 (186 419)         545 115       
Net cash outflows from investing activities                                         (2 590 345)      (2 781 932)      
Net cash inflows from financing activities                                           2 393 403        2 284 967       
Net movement in cash and cash equivalents                                             (383 361)          48 150       
Cash and cash equivalents at beginning of year                                         660 148          606 980       
Translation effects on cash and cash equivalents of foreign operations                  74 546            5 018       
Cash and cash equivalents at end of year^                                              351 333          660 148       
^Includes restricted cash of R161 million (2011: R159 million)                                                      

2012 Distributable income analysis                                                                             
                                                                                      Local    International          Total   
                                                                                      R000            R000          R000   
Net property income (excluding straight-line rental accrual)                      1 935 707          607 534      2 543 241   
Listed security income                                                              360 917                        360 917   
Trading income                                                                       12 414                         12 414   
Hotel income                                                                                        286 266        286 266   
Fee income                                                                           42 933           60 439        103 372   
Total revenue                                                                     2 351 971          954 239      3 306 210   
Administration costs                                                               (119 074)        (113 043)      (232 117)  
Interest in associates (excluding fair value adjustments)                            19 132          155 762        174 894   
Net finance costs                                                                  (691 163)        (656 234)    (1 347 397)  
Net distributable profit before taxation                                          1 560 866          340 724      1 901 590   
Taxation                                                                               (254)         (29 213)       (29 467)  
Net profit before distributable adjustments                                       1 560 612          311 511      1 872 123   
Non-controlling interest (excluding fair value adjustments)                           3 442         (127 069)     (123 627)   
                                                                                  1 564 054          184 442      1 748 496   
Distribution adjustments:                                                             8 312          (14 093)        (5 781)  
Align consolidated foreign profits with anticipated dividends                                         8 781          8 781   
Fee income from offshore subsidiary                                                   8 312                          8 312   
Non-distributable costs included in administration costs                                            (22 874)       (22 874)  
Distributable income                                                              1 572 366          170 349      1 742 715   

Distributable income reconciliation                                                                                                   
                                                                                       Audited          Audited   
                                                                                     31 August        31 August   
                                                                                          2012             2011   
                                                                                         R000            R000   
Profit/(loss) for the year attributable to Redefine unitholders                        342 079        (519 311)   
Changes in fair values of properties (net of deferred taxation)                      1 249 136        (280 558)   
Changes in fair value of properties                                                    948 293        (285 141)   
Deferred taxation                                                                      300 843            4 583   
Impairment of PPE and goodwill                                                                         837 245   
Capital gains tax                                                                       35 206           49 000   
Headline profit attributable to linked shareholders                                  1 626 421           86 376   
Debenture interest                                                                   1 742 715        1 825 321   
Headline earnings attributable to linked unitholders                                 3 369 136        1 911 697   
Changes in fair values of listed securities and financial instruments                                
(net of deferred taxation)                                                            (985 969)        (311 471)   
Changes in fair values of listed securities and financial instruments               (1 175 371)        (247 164)   
Deferred taxation                                                                      189 402         (64 307)   
Fair value interest adjustment                                                         365 584                   
Amortisation of intangibles (net of deferred taxation)                                  83 505           79 208   
Impairment of financial assets                                                                          11 468   
Alignment of consolidated international profits with anticipated dividends               8 781            2 694   
Straight-line rental income accrual                                                     42 876            8 217   
Foreign exchange loss/(gain)                                                            36 656          (1 649)   
Fair value adjustment of associates and NCI                                         (1 163 292)           60 915   
Fee income from international subsidiary                                                 8 312                   
Capital adjustments included in administration costs                                   (22 874)           6 387   
Swaption included in net interest                                                                       10 000   
Pre-acquisition income on Hyprop units acquired in prior year                                           47 855   
Distributable earnings                                                               1 742 715        1 825 321   
Six months ended 29 February                                                           845 553          832 131   
Six months ended 31 August                                                             897 162          993 190   
Total distributions                                                                  1 742 715        1 825 321   
Actual number of linked units in issue (000) *                                       2 760 497        2 684 295   
Weighted number of linked units in issue (000)*                                      2 694 914        2 684 295   
Earnings and diluted earnings^ per linked unit (cents)                                   77,36            48,65   
Headline earnings and diluted headline earnings^ per linked unit (cents)                125,02            71,22   
Distribution per linked unit (cents)                                                     64,00            68,00   
*Excludes 5 876 766 treasury units.                                                                                                   
^No dilutionary instruments in issue.                                                                                                 

Condensed consolidated statements of changes in equity                                       
                                                                                       Audited          Audited   
                                                                                     31 August        31 August   
                                                                                          2012             2011   
                                                                                         R000            R000  
Opening balance                                                                     17 056 251       15 801 448   
Issue of linked units net of issue cost                                                495 887                    
Arrowhead unbundling                                                                  (623 252)                  
Total comprehensive loss for the year                                                 (315 500)        (451 020)  
Transactions with NCI                                                                   11 763          (26 308)  
NCI on acquisition of subsidiaries                                                     (73 234)                  
Issue of capital instrument                                                                            158 630   
Shares issued to non-controlling interest                                                            1 573 501   
Total share capital and reserves                                                    16 551 915       17 056 251   

Condensed segmental analysis                                                                                                                               
                                                                                     Office         Retail     Industrial    International           Total   
                                                                                      R000          R000          R000            R000           R000   
Year ended 31 August 2012                                                                                 
Contractual rental income (excluding straight-line rental income accrual)         1 220 335        907 009        364 405          840 310       3 332 059   
Operating costs                                                                    (281 556)      (198 374)       (76 112)        (232 776)       (788 818)  
Net property income                                                                 938 779        708 635        288 293          607 534       2 543 241   
Investment property portfolio (excluding development properties)                  9 522 696      7 602 649      3 953 621        8 326 838      29 405 804   
Year ended 31 August 2011                                                                                 
Contractual rental income (excluding straight-line rental income accrual)         1 255 220        922 604        358 888          226 410       2 763 122   
Operating costs                                                                    (330 429)      (218 184)       (62 459)        (121 576)       (732 648)  
Net property income                                                                 924 791        704 420        296 429          104 834       2 030 474   
Investment property portfolio (excluding development properties)                  8 181 042      6 578 164      2 540 346       11 169 872      28 469 424   

Commentary
Profile
Redefine is a property loan stock company listed on the Johannesburg Stock Exchange (JSE) and manages a diversified portfolio of property assets
valued in excess of R39 billion. The companys local investment assets comprise 253 properties valued at R21,6 billion and a R5,6 billion portfolio of
listed property securities. Redefine is internationally diversified by way of 182 offshore properties valued at R10,3 billion and investments in
associates and joint ventures totalling R1,6 billion which are held through JSE listed Redefine Properties International Limited (RIN) and its 71,7% London
Stock Exchange listed subsidiary Redefine International P.L.C. (RI).

Redefine is committed to being the property owner of choice and the companys primary objective is to provide sustained and growing income for
investors. Underscoring this is Redefines pursuit of revenue enhancing opportunities that translate into increasing distributions and the prospect of
long-term capital appreciation for unitholders.

Financial results
Redefine has declared a distribution of 32,5 cents per linked unit for the six months ended 31 August 2012, which combined with the distribution of
31,5 cents for the half year ended 29 February 2012, results in a total distribution of 64 cents per linked unit for the year ended 31 August 2012. On a
like-for-like recurring income basis, the distribution is 7,2% ahead of the prior year, after excluding 4,0 cents from 2011 for the contribution from
the properties unbundled with Arrowhead Properties Limited (Arrowhead), as well as eliminating non-recurring fee income from the current and prior
years distributions of 1,3 cents and 4,6 cents per linked unit respectively.

On a geographic basis, 90% of distributable income was generated locally. Contractual rental income comprised 81% of total revenue, income from
listed securities was 9%, hotel income 7%, and trading and fee income 3%. Operating costs represent 23,7% of contractual rental income (31 August 2011:
26,5%), mainly reflecting the full period efficiencies arising from the internalisation of local property management.

RIN together with Redefine International Fund Managers Limited (RIFM), the fund manager of RI, contributed 6,3 cents per linked unit to the
distribution for the year.

Changes in fair values
The groups property portfolio was independently valued at 31 August 2012 resulting in a net reduction in value of R948 million. The local portfolio
valuation increased by R679 million, which was offset by the offshore portfolio valuation declining by R1,6 billion, arising mainly from the Wichford
legacy assets and the fragile European economy impacting on shopping centres owned by RI. The investment in local listed securities increased in value
by R1,2 billion during the year, driven largely by the holding in Hyprop Investments Limited (Hyprop). The balance mainly relates to the mark to
market of the groups interest rate swaps. 

Local property profile

Portfolio split by tenant type
Single tenanted     33%
Multi tenanted      67%

Sectoral spread by GLA
Office              36%
Retail              31% 
Industrial          33%

Geographic spread by GLA
Gauteng             63%
Western Cape        16%
KwaZulu-Natal       10%
Other               11%

Lease expiry profile
                          Office       Retail   Industrial        Total       
Monthly                  121 567       13 657       13 237      148 461
2013                     269 331      231 375      252 276      752 982
2014                     153 203      117 408      158 956      429 567
2015                     221 784      142 057      183 111      546 952
Beyond 2015              257 119      417 781      390 172    1 065 072
 



Letting activity: During the year leases totalling 513 601 m2 were renewed at an average rental increase of 4,6%. A further 
293 924 m2 was let across the portfolio and together with vacancies from properties disposed of, after adjusting for unlettable space, reduced
vacancies by 1,1% to 5,8%. Vacancies are set out below as a percentage of gross lettable area (GLA):

                                31 August 2012      31 August 2011         
Office                                    8,4%                8,9%*    
Retail                                    5,4%                4,8%     
Industrial                                3,4%                6,8%     
Total                                     5,8%                6,9%*    
*After adjusting for unlettable space

Arrears amounted to R39 million (31 August 2011: R34 million) against which a provision for possible bad debts of R14 million 
(31 August 2011: R9 million) is held.

Local property portfolio strategy
At 31 August 2012, the local directly managed property portfolio comprised 253 properties with a total GLA of 3,1 million m² valued at R21,6 billion.
Redefine has made significant progress in implementing its strategy of improving the quality of the core property portfolio, with the average value
per property increasing from R50 million to R80 million.

Acquisitions: 19 properties with a GLA of 304 394 m² were acquired and transferred during the year for an aggregate purchase consideration of R2,7
billion at an initial yield of 8,9%. Agreements have been concluded with a number of vendors for the acquisition of properties for an aggregate
consideration of R429 million, some of which are subject to Competition Commission approval. 

The acquisition of the Nicol Grove Precinct properties from Zenprop for an aggregate consideration of R824,8 million remains subject to various
regulatory approvals. The long-stop date for transfer of each of these properties is 31 December 2012, which may be extended to a date not later than 31
July 2013, after which date either party shall be entitled to cancel the agreement. 

East Rand Mall: After a competitive tender process, Redefine was the successful bidder for the acquisition of the East Rand Mall for a purchase
consideration of R2,23 billion from Sanlam. Due diligence has been completed and the acquisition is now subject to the negotiation of formal legal
agreements and the receipt of Competition Commission approval. In view of the fact that Vukile Property Fund (Vukile) had a pre-emptive right over the
property, Redefine and Vukile have reached an agreement in terms of which Vukile will acquire a 50% undivided share in the mall on the same terms and
conditions that Redefine proposes acquiring it for.

Disposals: During the year, excluding the Arrowhead portfolio, 32 properties with a GLA of 260 943 m², no longer meeting 
Redefines investment criteria, were sold to various buyers for an aggregate consideration of R903,9 million at an average yield 
of 11,42%. Agreements for an aggregate consideration of R176,2 million have been concluded with a number of buyers for the disposal of properties,
which are subject to the usual conditions precedent. 

Unbundling: On 9 December 2011 Arrowhead was listed and unbundled to linked unitholders, facilitating a fast-track basis for the disposal of 89
properties that no longer met with Redefines investment criteria. As a result of the unbundling, Redefines net asset value per linked unit reduced by 30
cents.

Fountainhead Property Trust ManCo (the ManCo): With effect from 1 August 2012, 100% of the share capital and loan claims of the ManCo, (represented
by Evening Star Trading 768 Proprietary Limited and Fountainhead Property Trust Management Limited) was acquired for R684,5 million. The acquired
businesses contributed revenues of R5,1 million and net profit after tax of R4,1 million to the group for one month since acquisition. These amounts have
been calculated using the groups accounting policies. If the businesses had been acquired on 1 September 2011, management estimates that the revenue
and profit after tax from these businesses would have been R61 million and R48,7 million respectively.

Details of the net assets acquired and goodwill are as follows:

Purchase consideration:                                               R000              
Cost of shares acquired                                               361,6              
Loan claims acquired                                                  322,9              
Total purchase consideration                                          684,5              
                                                                                           
The assets and liabilities as at 1 August 2012 arising from the acquisition are as follows:                                         
                                                                 Provisional         Acquirees         
                                                                  Fair value    carrying amount    
                                                                       R000              R000              
Cash and cash equivalents                                             18 161             18 161             
Listed securities                                                      2 322              2 322              
Intangible assets                                                    655 133            279 000            
Trade and other receivables                                            9 886              9 886              
Trade and other payables                                              (6 756)            (6 756)            
Shareholders loan                                                   (322 890)          (322 890)          
Tax liabilities                                                       (1 142)            (1 142)            
Deferred tax                                                        (176 540)             6 897              
Fair value of net assets                                             178 174            (14 522)           
Goodwill*                                                            183 436                           
Shareholders loan acquired                                           322 890                           
Total cash flow on acquisition                                       684 500                           
Purchase consideration settled in cash                               684 500                           
Cash and cash equivalents in subsidiary acquired                     (18 161)                          
Cash outflow on acquisition                                          666 339                           
*The goodwill arises as a result of the expected synergies from the acquisition.                                          

The business combinations have been accounted for using provisional figures in terms of IFRS 3  Business Combinations. The excess of the purchase
price over the companies provisional net assets has been reflected as goodwill and intangible assets. Due to the fact that the effective date of the combination was near to year end, the finalisation of the acquired asset valuations was not complete at reporting date. A detailed assessment of the assets, liabilities and contingent liabilities acquired will be completed by the 2013 financial year end and the required adjustments processed.

Fountainhead Property Trust (FPT): On 28 September 2012, a proposal to acquire all of FPTs properties other than Orion Place, Gail Industrial Park
and Precision House (the Retained Properties) for a purchase consideration that will result in FPT unitholders receiving three Hyprop units and 62,5
Redefine units for every 100 FPT units was made to the FPT board. The Retained Properties (which are valued at approximately R10 million) will
continue to be held by FPT, free of any gearing, to seed a new portfolio as part of a broad Black Economic Empowerment strategy consistent with the objectives
of the Property Charter.            

Listed securities portfolio
The listed securities portfolio comprises:                                                                    
                                                    August 2012                    August 2011                    
                                                Value  Interest held                Value  Interest held    
                                                R000              %                R000          %                
Hyprop Investments Limited                  5 287 983           30,4            4 122 626       45,7             
Arrowhead Properties Limited  A units         27 286            3,0                                              
Arrowhead Properties Limited  B units         23 772            3,0                                              
Fountainhead Property Trust                     2 444           0,03                                              
Oryx Properties Limited                                                         155 731       26,4             
Dipula Income Fund Limited                                                      385 989       33,8             
                                            5 341 485                           4 664 346                       

Hyprop: Consistent with the companys stated objective to exit its listed securities portfolio, two million Hyprop units were sold during the year,
resulting in the holding reducing by 0,8% to 30,4%. The decrease from 45,7% to 31,2% was due to Hyprop issuing new units during the year to acquire a
portfolio of retail assets.

Dipula Income Fund Limited (Dipula): On 21 April 2012 it was announced that the company had sold its remaining interest in Dipula to a Black
Economic Empowerment consortium which became effective from 1 June 2012. 

Oryx Properties Limited Limited (Oryx): The companys entire holding in Oryx was sold on 28 September 2012, realising R184 million and is reflected
under non-current assets held for sale. 

Redefine International: The successful capital raising by RI through a firm placing and open offer, which closed on 3 October 2012, realised gross
proceeds of £127,5 million and has resulted in RINs holding in RI since the year end decreasing from 71,7% to 65,7%. 

Given the demand for new RIN linked units under its pro rata offer, which was oversubscribed, the company was not allocated any new linked RIN units
in terms of the underwriting agreement. In order to broaden the RIN unitholder base, the company made available a portion of its RIN linked units taken
up by it under the pro rata offer for placement with third party placees. This has resulted in Redefines beneficial interest in RIN decreasing since
the year end by 4,6% to 49,3%, which will result in RIN being equity accounted going forward. Redefines effective interest in RI has similarly
declined from 38,7% at the year end to 32,4%.

Subsequent to year end RIN announced the conclusion of an agreement to extend and restructure their R1.5 billion Delta facility as well as the restructuring of their VBG portfolio. Discussions are on-going on the Gamma facility with a Standstill agreement currently in place. 

The company has reached agreement, subject to South African Reserve Bank approval, to acquire a further 13,95% in RIFM, which will increase the
companys holding to 90%. 

Distribution adjustment: It is Redefines policy to distribute its share of income from international subsidiaries to the extent of dividends
received. Accordingly, an adjustment has been made to the companys distributable earnings for the period to equate the consolidated results from its
international subsidiaries for the period to the anticipated dividends.

Interest in associates and joint ventures
This comprises Cromwell Property Group (Cromwell), a listed Australian property trust, together with Redefines interest in joint venture property
investments of R298,6 million. During the period under review, the group participated in a capital raise by Cromwell which resulted in Redefine taking
a direct 3,9% interest in Cromwell and RI increasing its holding to 23,2%. On 8 October 2012, the company acquired a further 0,3% through a call
option, which was exercised, and increased the groups total holding in Cromwell to 27,3%.

Funding
Redefines local borrowings at 31 August 2012, of R9,2 billion, represented 32,2% of the value of its local property and listed securities portfolio.
Redefines average cost of funding is 8,92% and the interest rates are fixed on 68% of borrowings for an average period of 4,2 years. RIs borrowings
of R10,1 billion are all negotiated directly by RI and have no recourse to Redefines South African balance sheet. RI has now repaid or is in the
process of restructuring over £250 million of legacy financing facilities since 29 February 2012, which has resulted in R1,2 billion of international debt
classified as non-current liabilities held-for-sale. Discussions with the Gamma facility servicer are on-going and a workable solution for the £199,7
million debt will be negotiated.

On 5 September 2011, Redefine made its debut in the local bond market with an issue of R250 million 90 day Commercial Paper under its R5 billion
Domestic Medium Term Note Programme. This issue has been rolled four times since the initial issue, achieving an all-in rate of 5,3% on the 3 September
2012 issue. On 27 March 2012 Redefine issued a R500 million three year bond, that was priced at an all-in rate of 7%. New local funding will be sourced
from the debt capital markets once disposal proceeds from the sale of listed securities have been reinvested.

Moodys credit rating (refreshed 12 October 2012):
Global long term Baa3
Global short term P-3
National long term A3.za
National short term P-2.za

Deferred Taxation
Redefine has accounted for Capital Gains Tax at the increased local rate of 18,6% which affects disposals after 1 September 2012. The change in tax
rate caused deferred taxation to increase by R423 million.

Contingencies
At 31 August 2012, Redefine had guarantees and suretyships in respect of its BEE initiatives and joint ventures amounting to R380,9 million. Redefine
has capital commitments outstanding amounting to R955 million and committed acquisitions of R1,3 billion.

Changes to the board
Gerald Leissner (non-executive) resigned from the Board on 22 February 2012 following the unbundling of Arrowhead. He was replaced on 12 March 2012
by Leonard Brehm (independent non-executive) who sadly passed away on 
4 July 2012. Roger Rees (independent non-executive) was appointed to the Board and as a member of the audit and risk committee on 27 September 2012.

Prospects
The local economic outlook has deteriorated, with no real improvement in the office sector anticipated. Redefines core property portfolio is
expected to continue to bear fruit from the restructure. Fee income is largely unpredictable and a strict focus on cost containment and sweating the assets
will be maintained. Accordingly, distributable income is anticipated to grow in the coming year between 5,5% to 7%. This forecast has not been reviewed
or reported on by the groups independent external auditors.

Debenture interest distribution
Unitholders are advised that interest distribution number 47 of 32,5 cents per linked unit has been declared for the six months ended 31 August 2012.
The distribution will be payable to Redefine linked unitholders in accordance with the abbreviated timetable set out below:
                                                                                    2012
Last day to trade cum interest distribution                        Friday, 16 November
Linked units trade ex interest distribution                        Monday, 19 November
Record date                                                          Friday, 23 November
Payment date                                                         Monday, 26 November

There may be no dematerialisation or rematerialisation of linked units between Monday, 19 November 2012 and Friday, 23 November 2012, both days
inclusive.

Basis of preparation
The results for the year ended 31 August 2012 have been audited by the groups independent external auditors PKF (Jhb) Inc. The unqualified audit
opinion is available for inspection at the companys registered office. These results have been prepared in accordance with International Financial
Reporting Standards, IAS 34  Interim Final Reporting, the AC500 series issued by the Accounting Practices Board or its successor, JSE Listings Requirements
and the requirements of the South African Companies Act, 2008. The accounting policies used are consistent with those applied in the annual financial
statements for the year ended 31 August 2011. 

These financial results have been prepared under the supervision of Andrew Konig (CA)SA, the financial director of the group.

By order of the Board
Redefine Properties Limited
31 October 2012

Directors: D Gihwala (Chairman),  M Wainer* (CEO), M N Flax, G J Heron, M K Khumalo, A J Konig* (FD), H K Mehta, B Nackan, D Perton, R W Rees, 
D H Rice* (COO)         *Executive  British
Registered office: 3rd Floor, Redefine Place, 2 Arnold Road, Rosebank, 2196. 
(PO Box 1731, Parklands, 2121)
Transfer secretaries: Computershare Investor Services (Proprietary) Limited
Sponsor: Java Capital
Company secretary: Probity Business Services (Proprietary) Limited
www.redefine.co.za
Date: 01/11/2012 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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