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REDEFINE PROPERTIES LIMITED - Summary of audited group results for the year ended 31 August 2016

Release Date: 03/11/2016 07:15
Code(s): RDF     PDF:  
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Summary of audited group results for the year ended 31 August 2016

REDEFINE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1999/018591/06
JSE share code: RDF      ISIN: ZAE000190252
("Redefine" or "the company" or "the group")
(Approved as a REIT by the JSE)

SUMMARY OF AUDITED GROUP RESULTS
FOR THE YEAR ENDED 31 AUGUST 2016

HIGHLIGHTS

OPERATING
MARGIN
maintained at 80%

PROPERTY
ASSETS
expanded by
R8,9 billion

LTV
maintained below 40%

TOP EMPLOYER
2017

MOST
EMPOWERED
REIT in the 2016 Empowerdex Survey

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

                                                                                                     Restated*
Figures in R'000s                                                                           2016          2015
Continuing operations   
Revenue   
Property portfolio revenue                                                             6 548 293     6 304 742
- Contractual rental income                                                            6 510 127     6 141 437
- Straight-line rental income accrual                                                     38 166       163 305
Investment income                                                                         98 355       344 229
Total revenue                                                                          6 646 648     6 648 971
Costs   
Operating costs                                                                      (2 241 032)   (2 084 709)
Administration costs                                                                   (210 241)     (228 834)
Net operating profit                                                                   4 195 375     4 335 428
Other gains                                                                               80 036       128 514
- Insurance proceeds received                                                                  -       119 420
- Trading income/(loss)                                                                      294       (1 946)
- Fee income                                                                              62 927             -
- Sundry income                                                                           16 815        11 040
Changes in fair values of properties, listed securities    
and financial instruments                                                                168 471     2 242 360
Amortisation of intangible assets                                                       (62 856)      (62 856)
Impairment of financial assets                                                          (13 886)             -
Equity accounted profit (net of taxation)                                              1 405 932       453 053
Profit before finance costs and taxation                                               5 773 072     7 096 499
Net interest costs                                                                   (1 389 672)   (1 433 753)
- Interest income                                                                        596 418       249 311
- Interest expense                                                                   (1 986 090)   (1 683 064)
Foreign exchange gain/(loss)                                                             309 941     (223 072)
Profit before taxation                                                                 4 693 341     5 439 674
Taxation                                                                                (88 298)       170 662
Profit from continuing operations                                                      4 605 043     5 610 336
Discontinued operations   
Profit from discontinued operations (net of taxation)                                      5 923             -
Profit for the year                                                                    4 610 966     5 610 336
Attributable to:   
- Redefine Properties Limited shareholders                                             4 565 617     5 334 419
- Non-controlling interest                                                                45 349       275 917
Other comprehensive income                                                                74 829       522 382
Items that may not be reclassified subsequently to profit or loss   
Share of revaluation of property, plant and equipment of an associate                      1 177             -
Items that are or may be reclassified subsequently to profit or loss   
Exchange differences on translation of foreign operations:   
- Subsidiaries                                                                          (12 687)      (70 491)
- Associates                                                                              86 339       592 873
   
Total comprehensive income for the year                                                4 685 795     6 132 718
Attributable to:   
- Redefine Properties Limited shareholders                                             4 640 446     5 856 801
- Non-controlling interest                                                                45 349       275 917
Earnings and diluted earnings per share - continuing operations                           101.32        142.52
* Refer to restatement note  
   
STATEMENT OF FINANCIAL POSITION   
   
                                                                                                     Restated*
Figures in R'000s                                                                           2016          2015
ASSETS      
Non-current assets                                                                    77 029 317    67 765 330
Investment properties                                                                 51 728 681    49 898 869
- Fair value of investment properties                                                 48 223 712    46 589 717
- Straight-line rental income accrual                                                  1 474 928     1 436 762
- Properties under development                                                         2 030 041     1 872 390
Listed securities                                                                        974 620       988 793
Goodwill and intangible assets                                                         5 304 191     5 367 047
Interest in associates and joint ventures                                             17 954 385    10 434 484
Derivative assets                                                                        172 296       166 047
Loans receivable                                                                         838 692       621 825
Other financial assets                                                                    36 391       252 717
Property, plant and equipment                                                             20 061        35 548
Current assets                                                                         1 612 719     1 433 778
Properties held-for-trading                                                                    -         1 080
Trade and other receivables                                                              577 560       617 964
Loans receivable                                                                          20 799       587 440
Other financial assets                                                                   675 078             -
Derivative assets                                                                         73 286        11 002
Listed security income receivable                                                         57 630        86 368
Cash and cash equivalents                                                                208 366       129 924
Non-current assets held-for-sale                                                       1 170 172     1 289 612
Total assets                                                                          79 812 208    70 488 720
EQUITY AND LIABILITIES      
Equity                                                                                49 641 362    45 137 272
Shareholders interest                                                                 49 360 062    45 137 272
Stated capital                                                                        36 526 352    33 209 605
Reserves                                                                              12 833 710    11 927 667
Non-controlling interests                                                                281 300             -
Non-current liabilities                                                               21 453 096    21 946 950
Interest-bearing borrowings                                                           21 148 712    21 602 140
Derivative liabilities                                                                    35 066        69 891
Deferred taxation                                                                        269 318       274 919
Current liabilities                                                                    8 532 556     3 404 498
Trade and other payables                                                                 922 864       906 398
Interest-bearing borrowings                                                            7 041 390     1 980 226
Interest accrual on interest-bearing borrowings                                          307 881       199 832
Derivative liabilities                                                                     2 978        24 496
Other financial liabilities                                                              253 016       271 154
Taxation payable                                                                           4 427        22 392
Non-current liabilities held-for-sale                                                    185 194             -
Total equity and liabilities                                                          79 812 208    70 488 720
Number of shares in issue^ ('000)                                                      4 700 911     4 393 103
Net asset value per share (excluding deferred tax       
and NCI) (cents)                                                                        1 055.74      1 033.72
Net tangible asset value per share (excluding deferred tax, NCI and goodwill      
and intangible assets) (cents)                                                            942.91        911.55
^ Net of 361 396 896 (2015: 361 396 896) treasury shares   
   
STATEMENT OF CHANGES IN EQUITY

                                                                 Shareholders   Non-controlling
Figures in R'000s                                                    interest         interests   Total Equity
Balance as at 31 August 2014 (as previously reported)              32 720 342         3 015 595     35 735 937
Restatement*                                                        (573 562)                 -      (573 562)
Balance as at 31 August 2014 (restated*)                           32 146 780         3 015 595     35 162 375
Total comprehensive income for the year                             5 856 801           275 917      6 132 718
Profit for the year (restated*)                                     5 334 419           275 917      5 610 336
Other comprehensive income for the year (restated*)                   522 382                 -        522 382
Transactions with owners (Contributions and distributions)          8 372 109         (264 910)      8 107 199
Issue of ordinary shares                                           11 179 971                 -     11 179 971
Dividends (restated*)                                             (2 870 318)         (264 910)    (3 135 228)
Recognition of share-based payments                                     8 008                 -          8 008
Cash adjustment on business combination (Leaf)                         54 448                 -         54 448
Changes in ownership interests                                    (1 238 418)       (3 026 602)    (4 265 020)
Transactions with non-controlling interests                       (1 238 418)       (3 026 602)    (4 265 020)
Balance as at 31 August 2015 (restated*)                           45 137 272                 -     45 137 272
Total comprehensive income for the year                             4 640 446            45 349      4 685 795
Profit for the year                                                 4 565 617            45 349      4 610 966
Other comprehensive income for the year                                74 829                 -         74 829
Transactions with owners (Contributions and distributions)          (417 656)          (12 814)      (430 470)
Issue of ordinary shares                                            3 318 016                 -      3 318 016
Dividends                                                         (3 673 124)          (12 814)    (3 685 938)
Recognition of share-based payments                                    16 846                 -         16 846
Share of post acquisition change in net assets of associates         (79 394)                 -       (79 394)
Changes in ownership interests                                              -           248 765        248 765
Acquisition of subsidiary with NCI                                          -           248 765        248 765
Balance as at 31 August 2016                                       49 360 062           281 300     49 641 362
* Refer to restatement note   

STATEMENT OF CASH FLOWS

                                                                                                     Restated*
Figures in R'000s                                                                           2016          2015
Cash generated from operations                                                         4 494 765     4 239 622
Interest received                                                                        596 418       306 229
Interest paid                                                                        (2 125 060)   (1 623 328)
Taxation paid                                                                          (111 864)      (97 442)
Net cash inflow from operating activities                                              2 854 259     2 825 081
Net cash outflow from investing activities                                           (7 358 891)   (6 371 977)
Net cash inflow from financing activities                                              4 737 426     3 459 777
Net movement in cash and cash equivalents                                                232 794      (87 119)
Cash and cash equivalents at beginning of year                                           129 924       350 606
Translation effects on cash and cash equivalents                                       (154 352)     (133 563)
Cash and cash equivalents at end of year                                                 208 366       129 924

DISTRIBUTABLE INCOME ANALYSIS

Figures in R'000s                                                  South Africa    International         Total
Contractual rental income (excluding straight-line    
rental accrual)                                                       6 510 127                -     6 510 127
Investment income                                                        98 355                -        98 355
Total revenue                                                         6 608 482                -     6 608 482
Operating costs                                                     (2 241 032)                -   (2 241 032)
Administration costs                                                  (180 573)         (29 668)     (210 241)
Net operating profit                                                  4 186 877         (29 668)     4 157 209
Other gains                                                              22 576           57 460        80 036
Distributable equity income                                              61 076          962 580     1 023 656
Net distributable profit before finance costs and taxation            4 270 529          990 372     5 260 901
Net interest costs                                                  (1 426 791)           37 119   (1 389 672)
- Interest income                                                       296 310          300 108       596 418
- Interest expense                                                  (1 723 101)        (262 989)   (1 986 090)
Realised foreign exchange gains                                               -           66 615        66 615
Net distributable profit before taxation and NCI                      2 843 738        1 094 106     3 937 844
Current taxation and with holding taxation                                1 931         (95 830)      (93 899)
Net income from operations before distributable adjustments           2 845 669          998 276     3 843 945
NCI's share of distributable income                                    (15 724)                -      (15 724)
Distributable income before distributable income adjustments          2 829 945          998 276     3 828 221
Below the line-distributable income adjustments:    
- Antecedant distribution                                                83 088                -        83 088
- Accrual for listed security income                                      3 250                -         3 250
- Transaction costs relating to business acquisitions                     4 187                -         4 187
- Other                                                                  10 028           25 681        35 709
Distributable income                                                  2 930 498        1 023 957     3 954 455
    
RECONCILIATION OF HEADLINE AND DISTRIBUTABLE EARNINGS

                                                                                                     Restated*
Figures in R'000s                                                                           2016          2015
Profit for the year attributable to Redefine shareholders                              4 565 617     5 334 419
Changes in fair value of properties                                                    (827 689)   (2 111 739)
Bargain purchase on acquisition of associate                                           (288 548)             -
Profit on dilution of ownership interest in an associate                                (11 610)             -
Impairment of interest in an associate                                                     4 639             -
Non-controlling interest portion of changes in fair value of properties                   28 848             -
Insurance proceeds received                                                                    -     (119 420)
Headline earnings attributable to Redefine shareholders                                3 471 257     3 103 260
Changes in fair values of listed securities and financial instruments      
(net of deferred taxation)                                                               162 488     (532 016)
Amortisation of intangible assets (net of deferred taxation)                              45 256        45 256
Impairment of loan to joint venture                                                        9 247             -
Transactions costs relating to business acquisitions                                       4 187         4 874
Antecedent distribution                                                                   83 088       209 474
REIT distributable income declared post year-end                                           3 250        13 751
Straight-line rental income accrual                                                     (38 166)     (163 305)
Unrealised foreign exchange (gain)/loss                                                (243 326)       233 848
Fair value adjustments and other non-distributable items of associates 
and NCI (other than investment property)                                                 421 465       160 558
NCI portion of Fountainhead's distributable income for the period 1 March 2015      
to 3 August 2015                                                                               -       101 917
Other distributable income                                                                35 709        46 262
Pre-acquisition distribution received                                                          -        21 520
Distributable income for the year                                                      3 954 455     3 245 399
Six months ended February                                                              1 871 951     1 444 227
Six months ended August                                                                2 082 504     1 801 172
Total distributions                                                                    3 954 455     3 245 399
Actual number of shares in issue (000)^                                                4 700 911     4 393 103
Weighted average number of shares in issue (000)^                                      4 500 281     3 743 055
Diluted weighted average number of shares in issue (000)^                              4 500 281     3 743 055
Basic and diluted earnings per share (cents)                                              101.45        142.52
- Continuing operations                                                                   101.32        142.52
- Discontinued operations                                                                   0.13             -
Headline earnings per share (cents)                                                        77.13         82.91
Diluted headline earnings per share (cents)(#)                                             77.13         82.91
Distribution per share (cents)                                                             86.00         80.00
 ^  Excludes 361 396 896 (2015: 361 396 896) treasury shares     
(#) There were no dilutive shares in issue

SEGMENTAL ANALYSIS

Figures in R'000s                              Office         Retail      Industrial    Specialised         Total
Year ended 31 August 2016  
Contractual rental income**                 2 449 801      2 751 315       1 170 058        138 953     6 510 127
Operating costs                             (783 123)    (1 075 576)       (341 362)       (40 971)   (2 241 032)
Net property income                         1 666 678      1 675 739         828 696         97 982     4 269 095
Investment property  
portfolio(#)                               18 033 797     21 344 930      10 163 302      1 326 783    50 868 812
Year ended 31 August 2015  
Contractual rental income**^                2 257 374      2 820 293       1 021 436         42 334     6 141 437
Operating costs^                            (740 678)    (1 078 539)       (265 233)          (259)   (2 084 709)
Net property income^                        1 516 696      1 741 754         756 203         42 075     4 056 728
Investment property  
portfolio(#)                               18 355 620     20 622 822       9 917 549        420 100    49 316 091

**  Excluding straight-line rental income accrual.
(#) Excluding properties under development and held-for-trading. Properties classified as held-for-sale are included.
 ^  The Fountainhead reporting segment disclosed in the prior year has been allocated to the underlying segments.

COMMENTARY

PROFILE

Redefine is an internally managed Real Estate Investment Trust (REIT) with a primary goal of
growing and improving cash flow to deliver quality earnings, which will underpin sustained growth in
distributions, and support growth in total return per share. Redefine is listed on the Johannesburg
Stock Exchange (JSE) with a market capitalisation of R58,1 billion and is included in the JSE
Top 40 index. Redefine manages a diversified property asset platform with a value of R72,7 billion
(2015: R63,8 billion), comprising local and international property investments. Redefine's shares are
among the most actively traded on the JSE, making it a highly liquid single entry point for gaining
exposure to quality domestic properties and a spread of multiple international commercial real
estate markets.

At 31 August 2016, Redefine's diversified, local property portfolio was valued at R54,7 billion
(2015: R52,8 billion). The group's international real estate investments, valued at R18,0 billion
(2015: R11,0 billion) represent 24.8% (2015: 17.2%) of total property assets and provide geographic
diversification into the UK, German, Polish and Australian property markets. Redefine has a 30.1%
(2015: 30.1%) equity interest, with a value of R5,0 billion (2015: R4,8 billion), in Redefine International
PLC (RI PLC) which is listed on both the London Stock Exchange (LSE) and the JSE. Redefine and
RI PLC co-own a German retail portfolio valued at R799 million (2015: R653 million). In addition,
Redefine has a R6,3 billion (2015: R5,0 billion) presence in the Australian property market through a
direct 50% (2015: 50%) interest in North Sydney's landmark tower, Northpoint, as well as a holding
of 25.5% (2015: 25.6%) in Cromwell Property Group (Cromwell), one of the leading property groups
listed on the Australian Stock Exchange (ASX). On 1 June 2016, Redefine acquired a 44.9% share in
Echo Polska Properties (EPP) valued at R3,9 billion. EPP owns a portfolio of prime retail and office
real estate assets throughout Poland. EPP listed on both the Luxembourg Stock Exchange (LuxSE)
and the JSE during September 2016.

FINANCIAL RESULTS

Redefine's Board has declared a distribution of 44,3 (2015: 41.0) cents per share for the six months
ended 31 August 2016, an increase of 8.0% (2015: 7.5%) on the comparable period, which is in line
with market guidance. This brings the full year distribution to 86,0 (2015: 80.0) cents per share
resulting in year-on-year growth of 7.5% (2015: 7.3%). Gross distributable income for the year
increased by 21.8% (2015: 36.3%) benefiting from a number of substantial quality acquisitions made
in recent years.

Property portfolio revenue for the year contributed 98.5% (2015: 94.8%) of total revenue, income
from listed securities represented 1.5% (2015: 5.2%).

Operating costs were 34.4% (2015: 33.9%) of contractual rental income (excluding straight-
line rental income accruals) - the increase resulting mainly from higher municipal costs. Net
of electricity and utility recoveries, operating costs were 17.9% (2015: 18.0%) of contractual
rental income. Redefine's international property investments contributed 25.9% (2015: 17.0%) of
distributable income.

CHANGES IN FAIR VALUES

The group's property portfolio was independently valued at 31 August 2016 producing a net
increase in value of R307,4 million (2015: R1,9 billion). In terms of IAS 40 and IFRS 13, Redefine's
investment properties are measured at fair value and are categorised as level 3 investments. There
were no transfers between levels 1, 2 and 3 during the period. The investment in listed securities
decreased in value by R275,4 million (2015: increase of R160,8 million) during the year. The balance
of R136,5 million (2015: R146,4 million) mainly relates to the increase in the mark-to-market of
the group's derivatives, which protect the group against adverse movements in interest and foreign
exchange rates, these were valued using the swap curve and forward pricing methods respectively.
In terms of IAS 39 and IFRS 13, Redefine's listed securities and derivatives are measured at fair
value through profit or loss and are categorised as level 1 and level 2 investments respectively. There
were no transfers between levels 1, 2 and 3 during the period.

PROPERTY PORTFOLIO

The portfolio vacancy rate declined during the year by 0.5% (2015: 0,1%) to 4.9% (2015: 5.4%). Leases
covering 492 126m(2) (2015: 510 649m(2)) were renewed during the year at an average rental increase of
3.3% (2015: 3.0%) with the tenant retention rate a pleasing 92.0% (2015: 87.0%). A further 401 128m(2)
(2015: 338 294m(2)) was let across the portfolio. Net arrears improved to R39,8 million
(2015: 41,8 million). Net arrears represent 6.3% (2015: 8.3%) of gross monthly rental.

PORTFOLIO SPLIT BY TENANT

Multi tenants    67.6%
Single tenants   32.4%

SECTORAL SPREAD BY GLA

Office           28.5%
Retail           28.0%
Industrial       42.9%
Specialised       0.6%

GEOGRAPHIC SPREAD BY GLA

Gauteng          65.6%
Cape             18.9%
KwaZulu-Natal     8.0%
Other             7.5%


LEASE EXPIRY PROFILE (GLA)     
     
                    Office      Retail    Industrial    Specialised        Total
Monthly             43 537      35 360         7 738              -       86 635 
2017               199 024     200 913       145 211              -      545 148 
2018               207 343     208 290       191 853              -      607 486 
2019               140 988     153 989       230 683              -      525 660 
2020               147 469     161 059       172 515              -      481 043 
2021               184 507     185 926       154 892         26 970      552 295 
Beyond 2021        182 493     249 905       941 932              -    1 374 330 
Vacancy            181 399      64 401        85 364              -      331 164 
                 1 286 760   1 259 843     1 930 188         26 970    4 503 761 

SECTORAL VACANCY BY GLA
                          31 August 2016 vacancy    Strategic
                        before strategic vacancy     vacancy*    31 August 2016   31 August 2015
                                             (%)          (%)               (%)              (%)
Office                                      14.1          5.4               8.7              8.5
Retail                                       5.1          1.5               3.6              4.3
Industrial                                   4.4          1.0               3.4              3.8
Specialised                                    -            -                 -                -
                                             7.4          2.4               4.9              5.4

*Strategic vacancies comprises properties held-for-sale and properties under development.

REDEFINE'S PROPERTY PORTFOLIO STRATEGY

Redefine continues to deliver on its strategy of diversifying, growing and improving the quality of
its property portfolio. During the year, management's primary domestic portfolio focus was on
protecting, expanding and improving existing well-located properties.

Acquisitions: Redefine acquired and transferred four properties, with a GLA of 21 547m(2), during
the year, for an aggregate consideration of R228,3 million, at an initial yield of 9.4%. In addition,
Redefine acquired three development properties for an aggregate consideration of R285,7 million
with a developable area of 369 285m(2) (Redefine's share: 153 104m(2)). Subsequent to the reporting
period, Redefine acquired a further two development properties, for an aggregate consideration of
R250,5 million with a developable area of 493 265m(2) (Redefine's share: 268 715m(2)).

Developments: Redevelopment projects are in progress in the existing portfolio with an approved
value of R1,1 billion at an average yield of 6.4%. New development projects covering 156 876m(2) of
GLA with an approved value of R2,5 billion at an average yield of 9.2%, are presently in progress.
Projects totalling R2,2 billion were completed during the year.

Disposals: 16 properties with a GLA of 177 189m(2), which did not meet Redefine's investment
strategy, were disposed of during the year to various buyers for an aggregate consideration of
R1,4 billion, at an average yield of 8.5%. In addition, agreements, subject to the usual conditions
precedent, were concluded for the disposal of properties for an aggregate consideration of
R431,5 million, with a GLA of 82 067m(2) at an average yield of 7.2%.

Government-tenanted offices: In line with its strategy to dispose of its government tenanted
portfolio, Redefine concluded an agreement with Delta Property Fund Limited (Delta) to dispose of
15 office properties with a GLA of 191 567m(2) at an average yield of 16.4% for R1,3 billion in exchange
for 162 043 079 Delta shares. The effective date of the transaction was 1 April 2016. Redefine will
dispose of the balance of its government-tenanted portfolio on a deal-by-deal basis.

Student accommodation: During the year, Redefine acquired a 51% equity interest in Respublica
Student Living Proprietary Limited (RSL) for R438,6 million at an initial yield of 10.6%. RSL owns
and manages student accommodation facilities with a current capacity of 3 687 beds. Yale Village
(Parktown) and Hatfield Square, two of Redefine's secondary office assets, are being converted into
student accommodation with a bed capacity of 332 and 2 200 beds respectively.

Sustainability: As part of Redefine's focus on sustainability and cost efficiency, various energy-
efficient and sustainable building technologies are being implemented in new developments as well
as in existing buildings, including the installation of solar PV (photo voltaic) and smart metering
of electricity and water. To protect income, Redefine has taken steps to ensure that there is
uninterrupted electricity supply at its key retail properties.

LISTED SECURITIES

Redefine currently owns the following listed securities:

                                                    2016                           2015
                                      Market value                  Market value
                                              R000     (%) held             R000    (%) held
Emira Property Fund                        784 321         11.5          988 793        11.5
Arrowhead Properties Limited               190 299          2.4                -           -
                                           974 620                       988 793

INTERESTS IN ASSOCIATES

Redefine currently holds the following equity-accounted investments in associates:

                                                 2016                       2015
                                 Stock       Carrying                   Carrying
                              exchange     value R000  (%) held       value R000    (%) held
Cromwell Property Group            ASX      5 511 449      25.5        4 349 773        25.6
Redefine International
P.L.C.                     LSE and JSE      4 972 179      30.1        4 751 602        30.1
Echo Polska Properties       LuxSE and
N.V.                               JSE      3 918 640      44.9                -           -
Delta Property Fund Limited        JSE      1 597 967      22.8                -           -
International Hotel          LuxSE and      
Properties Limited                 JSE        332 767      27.5                -           -
                                           16 333 002                  9 101 375

RI PLC: On 16 February 2016, RI PLC undertook a capital raise in which Redefine participated and
acquired 81,4 million additional RI PLC shares for a consideration of R762 million. During the year,
Redefine also participated in RI PLC's dividend re-investment schemes and elected to receive
14,9 million shares.

EPP: Redefine's international strategy is centred on geographic diversification and exploiting
attractive initial yield spread. On 1 June 2016, Redefine significantly extended the scope of its
international interests via a 44.9% investment into EPP, a high-yielding commercial platform
comprising 21 properties in the Polish market valued at EUR1.2 billion (R19,4 billion). The
transaction represented a unique opportunity to create the leading commercial real estate platform
in Poland and to build instant critical mass by acquiring a high quality retail-based portfolio with a
strong local partner also providing a substantial development pipeline which will generate additional
growth. Redefine's purchase consideration was funded by an offshore 12-month bridge facility of
EUR250 million (R4,04 billion). Subsequent to year-end, Redefine successfully placed secured bonds
with a principal amount of EUR150 million (R2,4 billion) bearing a coupon of 1.5%, exchangeable in
five years into ordinary shares of RI PLC, the proceeds of which were used to partially refinance the
bridge facility. The balance of the bridge facility will be refinanced through a combination of secured
offshore bank funding and cross currency swaps.

OFFER TO ACQUIRE THE PIVOTAL FUND LIMITED (PIVOTAL)

On 30 August 2016, Redefine announced an offer to acquire all of the Pivotal shares from Pivotal
shareholders by scheme of arrangement. Following implementation of the scheme, Pivotal
shareholders will receive approximately 138,54 Redefine shares and 9,38 EPP shares for every 100
Pivotal shares held. The Pivotal acquisition is in line with Redefine's strategy to diversify, grow and
improve the quality of its portfolio and recycle its capital through disposing of non-core assets and
replacing them with prime assets. The acquisition positions Redefine even more competitively in
the commercial property sector in line with its strategic intent to become the landlord of choice
in A-grade office space in sought after areas in South Africa. The transaction is subject to Pivotal
shareholder, senior lender and the usual regulatory approvals which are expected by 
30 November 2016.

FUNDING AND EQUITY RAISES

Redefine's debt represented 38.5% (2015: 36.7%) of the value of its property assets as at 31 August 2016.
The average cost of local funding is 8.8% (2015: 8.4%) - interest rates are fixed on 82.1% (2015: 81.3%) 
of local borrowings for an average period of 2,2 years (2015: 2,8 years). The interest cover
ratio (which includes equity-accounted profit and listed security income) is 4.3x (2015: 3.4x). Redefine
has unutilised committed bank facilities of R3,4 billion (2015: R2,9 billion) as at 31 August 2016 which
provides assurance that Redefine will be able to meet its short-term commitments. The majority of
the short-term portion of interest-bearing borrowings is being refinanced.

On 20 July 2016, Redefine issued 137 million shares through an accelerated bookbuild for
R1,5 billion in cash. In addition, Redefine conserved R1,8 billion in cash through the issue of
170,9 million shares under the dividend re-investment alternative, which was taken up by 47% of
shareholders.

Moody's credit rating:
On 11 May 2016, Moody's repositioned the national scale rating. As a result of the recalibration,
Redefine's national credit rating has improved and has been adjusted to the following:

Global long-term Baa3                                Global short-term P-3

National long-term Aa2.za                            National short-term P-1.za

The rating was refreshed during July 2016 and remains unchanged.

COMMITMENTS

Capital development commitments outstanding amount to R2,4 billion (2015: R2,2 billion) and
committed property acquisitions totalled R250,5 million (2015: R415 million). Future commitments
will be funded by undrawn banking facilities.

BROAD-BASED BLACK ECONOMIC EMPOWERMENT

Redefine has achieved a Level 3 BBBEE contributor rating, significantly bolstering its empowerment
credentials compared to the previous Level 6 status.

PROSPECTS

The general overview of the demand side of the domestic economy suggests a tight economic
situation for all corporates, consumers, investors and the public sector. The most pressing factor in
the present situation is the lack of investor confidence. Productive investment remains the panacea
for future economic growth and job creation. It is therefore imperative that all facets of South
Africa should aim to advance the wellbeing of the economic and business environment. Business
confidence and trust remain key variables to improved economic performance.

On the international front, low interest rates, volatile exchange rate movements and tepid growth are
set to continue.

Redefine's diversified asset platform has been structured to sustain the creation of value at low risk,
and combined with a motivated and aligned management team, focused on disciplined execution of
what matters most, to realise Redefine's vision to be the best South African REIT. Prospects for 2017
are subject to numerous factors which remain uncertain, including volatile financial markets, the
continuing possibility of a sovereign credit downgrade and the outcome of the offer to acquire Pivotal.
Growth in distributable income per share for 2017 is anticipated to range between 7.5% to 8.5%.

This forecast is predicated on the assumption that current trading conditions will prevail. Forecast
rental income is based on contractual terms and anticipated market-related renewals. The forecast
has not been reviewed or reported on by the group's independent external auditors.

Redefine's use of distribution per share as a relevant measure of financial performance remains 
unchanged from prior years.

DECLARATION OF A CASH DIVIDEND WITH THE ELECTION TO REINVEST THE CASH DIVIDEND IN RETURN FOR REDEFINE
SHARES

The directors of Redefine have declared a final cash dividend of 44,30000 cents per share, for the six
months ended 31 August 2016, from the company's distributable income (the cash dividend).

Shareholders will be entitled, in respect of all or part of their shareholdings, to elect to reinvest the
cash dividend in return for Redefine shares (the share reinvestment alternative), failing which they
will receive the cash dividend of 44,30000 cents per share that will be paid to those shareholders not
electing to participate in the share reinvestment alternative.

A circular providing further information in respect of the cash dividend and share reinvestment
alternative will be posted to Redefine shareholders on 4 November 2016.

The right to elect shares in jurisdictions other than the Republic of South Africa ("SA") may be 
restricted by law, and failure to comply with any of these restrictions may constitute a violation of 
the securities laws of any such jurisdictions. Shareholders' rights to elect shares are not being offered, 
directly or indirectly, in the United Kingdom, European Economic Area or EEA, Canada, United States of America, 
Japan or Australia unless certain exemptions from the requirements of those jurisdictions are applicable.

Shareholders who have dematerialised their shares through a Central Securities Depository
Participant (CSDP) or broker, should instruct their CSDP or broker with regard to their election in
terms of the custody agreement entered into between them and their CSDP or broker.

                                                                                           2016
Circular and form of election posted to shareholders and announcement 
on SENS                                                                      Friday, 4 November
Finalisation information including the share ratio and price per
share published on SENS                                                    Tuesday, 15 November
Last day to trade in order to participate in the election to receive
shares in terms of the share reinvestment alternative or to receive a
cash dividend (LDT)                                                        Tuesday, 22 November
Shares trade ex dividend                                                 Wednesday, 23 November
Listing of maximum possible number of shares under the share
reinvestment alternative                                                    Friday, 25 November

                                                                                           2016
Last day to elect to receive shares in terms of the share
reinvestment alternative or to receive a cash dividend (no late forms
of election will be accepted) at 12:00 (SA time)                            Friday, 25 November
Record date for the election to receive shares in terms of the share
reinvestment alternative or to receive a cash dividend
(record date)                                                               Friday, 25 November
Announcement of results of cash dividend and share reinvestment
alternative released on SENS                                                Monday, 28 November
Cash dividend paid to certificated shareholders on or about                 Monday, 28 November
Accounts credited by CSDP or broker to dematerialised
shareholders with the cash dividend payment                                 Monday, 28 November
Share certificates posted to certificated shareholders on or about       Wednesday, 30 November
Accounts updated with the new shares (if applicable) by CSDP or
broker to dematerialised shareholders                                    Wednesday, 30 November
Adjustment to shares listed on or about                                      Friday, 2 December

Notes:

Shareholders electing the share reinvestment alternative are alerted to the fact that the new shares will be listed
on LDT + 3 and that these new shares can only be traded on LDT + 3, due to the fact that settlement of the shares
will be three days after the record date, which differs from the conventional one day after record date settlement
process.

Shares may not be dematerialised or rematerialised between Wednesday, 23 November 2016 and Friday,
25 November 2016, both days inclusive. The above dates and times are subject to change. Any changes will be
released on SENS.

TAX IMPLICATIONS

Redefine was granted REIT status by the JSE with effect from 1 September 2013 in line with the
REIT structure as provided for in the Income Tax Act, 58 of 1962, as amended (the Income Tax Act),
and section 13 of the JSE Listings Requirements. The REIT structure is a tax regime that allows a
REIT to deduct qualifying distributions paid to investors, in determining its taxable income.The cash
dividend of 44,30000 cents per share meets the requirements of a qualifying distribution for the
purposes of section 25BB of the Income Tax Act (a qualifying distribution) with the result that:
 
-  Qualifying distributions received by resident Redefine shareholders must be included in the
   gross income of such shareholders (as a non-exempt dividend in terms of section 10(1)(k)(aa)
   of the Income Tax Act), with the effect that the qualifying distribution is taxable as income in
   the hands of the Redefine shareholder. These qualifying distributions are, however, exempt
   from dividends withholding tax, provided that the South African resident shareholders provided
   the following forms to their CSDP or broker, as the case may be, in respect of uncertificated
   shares, or the company, in respect of certificated shares:

    -    a declaration that the dividends are exempt from dividends tax; and

    -    a written undertaking to inform the CSDP, broker or the company, as the case may be,
         should the circumstances affecting the exemption change or the beneficial owner cease
         to be the beneficial owner, both in the form prescribed by the Commissioner for the South
         African Revenue Service.
 
   Shareholders are advised to contact their CSDP, broker or the company, as the case may
   be, to arrange for the abovementioned documents to be submitted prior to payment of the
   distribution, if such documents have not already been submitted.
 
-  Qualifying distributions received by non-resident Redefine shareholders will not be taxable as
   income and instead will be treated as ordinary dividends but which are exempt in terms of the
   usual dividend exemptions per section 10(1)(k) of the Income Tax Act. It should be noted that
   until 31 December 2013, qualifying distributions received by non-residents were not subject
   to dividends withholding tax. Since 1 January 2014, any qualifying distribution will be subject
   to dividends withholding tax at 15%, unless the rate is reduced in terms of any applicable
   agreement for the avoidance of double taxation (DTA) between South Africa and the country of
   residence of the shareholder. Assuming dividends withholding tax will be withheld at a rate of
   15%, the net dividend amount due to non-resident shareholders is 37,65500 cents per share.
 
   A reduced dividend withholding rate in terms of the applicable DTA, may only be relied upon
   if the non-resident shareholder has provided the following forms to their CSDP or broker, as
   the case may be, in respect of uncertificated shares, or the company, in respect of certificated
   shares:

     -    a declaration that the dividend is subject to a reduced rate as a result of the application of
          a DTA; and

     -    a written undertaking to inform their CSDP, broker or the company, as the case may be,
          should the circumstances affecting the reduced rate change or the beneficial owner cease
          to be the beneficial owner both in the form prescribed by; the Commissioner for the South
          African Revenue Service.

    Non-resident shareholders are advised to contact their CSDP, broker or the company, as the
    case may be, to arrange for the abovementioned documents to be submitted prior to payment
    of the dividend if such documents have not already been submitted, if applicable.

    Shareholders are advised that in electing to participate in the share reinvestment alternative,
    pre-taxation funds are utilised for the reinvestment purposes and that taxation will be due on
    the total cash dividend amount of 44,30000 cents per share.

OTHER INFORMATION

- The ordinary issued share capital of Redefine is 5 062 307 743 ordinary shares of no par value
  before any election to reinvest the cash dividend.

- Income tax reference number of Redefine: 917/852/484/0.

The cash dividend or share reinvestment alternative may have tax implications for resident as
well as non-resident shareholders. Shareholders are therefore encouraged to consult their
professional advisers should they be in any doubt as to the appropriate action to take.

DIVIDEND DECLARATION AFTER REPORTING DATE

In line with IAS 10 Events after the Reporting Period, the declaration of the dividend occurred after
the end of the reporting period, resulting in a non-adjusting event which is not recognised in the
financial statements.

RESTATEMENTS

Investments in associates and joint ventures

The group's accounting policy for investments in associates and joint ventures is to use the equity
method, whereby the investments are initially recognised at cost and increased or decreased by the
group's share of post-acquisition profits or losses and other comprehensive income.

In prior periods, the group did not include its share of the associates other comprehensive income
when applying the equity method. Accordingly, these results are restated with the change applied
retrospectively. The change is of a non-cash flow nature and has no effect on the distributable
income or profit or loss. We believe this change will give a fairer reflection of the economic
substance of investments, particularly where those investments operate in foreign currencies and
will provide more relevant information to the users of the financial statements.

Loans receivables - Ma Afrika Tikkun Endowment Trust

In the financial year ended 31 August 2013, Redefine granted Ma Afrika Tikkun Endowment Trust
(Ma Afrika) a loan to acquire Redefine shares. The loan is secured by 55 520 130 Redefine shares
and will be repaid using the dividends on the shares and the proceeds generated by the future sale
of shares. As the loan only has recourse to the shares and no other assets, the issue of the shares
on loan account should have, for accounting purposes, been treated as an option grant which vested
on the date when the loan was granted.

In prior years, Redefine accounted for the shares as issued and recognised a loan receivable. The
comparatives for the 2016 financial statements have been restated to account for the issue of a
share option, instead of the issue of Redefine shares and related loan. The guarantee fee receivable
related to this loan has also been derecognised and is included in the valuation of the option.

Dipula BEE Trust

In 2012, Redefine sold 50 million Dipula Income Fund Limited B shares (Dipula B shares) to the Dipula 
BEE Trust for a consideration of R270 million and a 33.3% beneficiary interest in the Dipula BEE Trust. 
The Dipula BEE Trust obtained bank funding for the purchase of the shares. Redefine in turn provided a 
guarantee of R180 million and agreed to a put option of R90 million (minimum) as security for the bank loan.
The Dipula BEE Trust cannot dispose of the 50 million Dipula B shares without Redefine's approval.
Redefine has assessed that it neither retained nor transferred substantially all the risks and rewards
of ownership of the 50 million Dipula B shares and Redefine retained control of the 50 million Dipula
B shares. Therefore, Redefine should have continued to recognise the 50 million Dipula B shares
to the extent of its continuing involvement. Redefine should also have a recognised an associated
liability for the amount it could be required to pay in terms of the guarantee and put option. In
2012, Redefine derecognised the 50 million Dipula B shares and recognised a financial guarantee
receivable and disclosed the related financial guarantee liability. Accordingly, this transaction has been restated
retrospectively to reflect Redefine's continuing involvement in the 50 million Dipula B shares and
associated liability.

RECLASSIFICATION

Derivative assets and liabilities

In the prior year, the interest rate swaps presented as derivative assets and liabilities were
offset. Accordingly, the derivative assets/liabilities have been reclassified with the change applied
retrospectively. The change is of a non-cash flow nature and has no effect on the distributable
income or profit or loss.

Interest accrual on interest-bearing borrowings

In the prior years, the interest accrual on interest-bearing borrowings was presented together with
trade and other payables. The interest accrual on interest-bearing borrowings has been reclassified to
a separate line on the Statement of Financial Position with the change applied retrospectively. The
change is of a non-cash flow nature and has no effect on the distributable income or profit or loss.
There is no impact on the group's basic or diluted earnings per share and no impact on the total
operating, investing or financing cash flows for the year ended 31 August 2015.

Cash flow - Dividends paid

In the prior years, the dividends paid and dividends paid to non-controlling interests were presented
as cash flows from operating activities. Dividends paid and dividends paid to non-controlling
interests have been reclassified to cash flows from financing activities with the change applied
retrospectively to be in line with how Redefine manages it's cash.

PRIOR YEAR RESTATEMENT

                                                                                                 2015
                                                                    As previously        Restatement/
Figures in R'000s                                                        reported    Reclassification    As restated
STATEMENT OF FINANCIAL POSITION
Non-current assets                                                     67 465 410             299 920     67 765 330
Interest in associates and joint ventures                               9 823 319             611 165     10 434 484
Derivative assets                                                          93 150              72 897        166 047
Loans receivable                                                        1 184 924           (563 099)        621 825
Other financial assets                                                          -             252 717        252 717
Guarantee fees receivable                                                  73 760            (73 760)              -
Current assets                                                          1 422 776              11 002      1 433 778
Derivative assets                                                               -              11 002         11 002
Total assets                                                           70 177 798             310 922     70 488 720
Equity                                                                 45 145 459             (8 187)     45 137 272
Stated capital                                                         33 738 010           (528 405)     33 209 605
Reserves                                                               11 407 449             520 218     11 927 667
Non-current liabilities                                                21 894 566              52 384     21 946 950
Derivative liabilities                                                          -              69 891         69 891
Other financial liabilities                                                17 507            (17 507)              -
Current liabilities                                                     3 137 773             266 725      3 404 498
Trade and other payables                                                1 106 230           (199 832)        906 398
Interest accrual on interest-bearing borrowings                                 -             199 832        199 832
Derivative liabilities                                                     10 488              14 008         24 496
Other financial liabilities                                                18 437             252 717        271 154
Total equity and liabilities                                           70 177 798             310 922     70 488 720
Number of shares in issue ('000)                                        4 448 623            (55 520)      4 393 103
Net asset value per share (cents)                                        1 021.00               12.72       1 033.72
Net tangible asset value per share (cents)                                 900.35               11.20         911.55

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Other gains                                                               162 274            (33 760)        128 514
- Fee income                                                               33 760            (33 760)              -
Profit before finance costs and taxation                                7 130 259            (33 760)      7 096 499
Net interest costs                                                    (1 376 835)            (56 918)    (1 433 753)
- Interest income                                                         306 229            (56 918)        249 311
Profit for the year                                                     5 701 014            (90 678)      5 610 336
Other comprehensive (loss)/income                                        (90 397)             612 779        522 382
Exchange differences on translation of foreign operations:
- Associates and joint ventures                                          (19 906)             612 779        592 873
Total comprehensive income for the year                                 5 610 617             522 101      6 132 718
Total comprehensive income for the year - attributable to
Redefine Properties Limited shareholders                                5 334 700             522 101      5 856 801
Earnings per share (basic and diluted)                                     142,82              (0,30)         142,52

                                                                                                 2015
                                                                    As previously        Restatement/
Figures in R'000s                                                        reported    Reclassification    As restated
STATEMENT OF CASH FLOW
Cash flows from operating activities
Cash generated from operations                                          4 299 358            (59 736)      4 239 622
Interest paid                                                         (1 683 064)              59 736    (1 623 328)
Dividends paid                                                        (2 859 144)           2 859 144              -
Dividends paid to non-controlling interests                             (264 910)             264 910              -
Net cash inflow from operating activities                               (298 973)           3 124 054      2 825 081
Cash flows from financing activities
Dividends paid                                                                  -         (2 859 144)    (2 859 144)
Dividends paid to non-controlling interests                                     -           (264 910)      (264 910)
Net cash inflow from financing activities                               6 583 831         (3 124 054)      3 459 777

                                                                                                 2014
                                                                    As previously       Restatement/
Figures in R'000s                                                        reported    Reclassification    As restated
STATEMENT OF FINANCIAL POSITION
Non-current assets                                                     55 007 339           (272 715)     54 734 624
Interest in associates and joint ventures                               4 173 173             (1 614)      4 171 559
Derivative assets                                                               -              75 746         75 746
Loans receivable                                                        1 727 212           (549 455)      1 177 757
Other financial assets                                                     23 510             252 608        276 118
Guarantee fees receivable                                                  50 000            (50 000)              -
Current assets                                                            992 697               1 927        994 624
Derivative assets                                                               -               1 927          1 927
Total assets                                                           57 490 164           (270 788)     57 219 376
Equity                                                                 35 735 937           (573 562)     35 162 375
Stated capital                                                         22 558 039           (528 405)     22 029 634
Reserves                                                               10 162 303            (45 157)     10 117 146
Non-current liabilities                                                14 997 245              32 073     15 029 318
Derivative liabilities                                                     95 192              59 580        154 772
Other financial liabilities                                                36 731            (27 507)          9 224
Current liabilities                                                     6 756 982             270 701      7 027 683
Trade and other payables                                                1 294 307           (140 096)      1 154 211
Interest accrual on interest-bearing borrowings                                 -             140 096        140 096
Derivative liabilities                                                        926              18 093         19 019
Other financial liabilities                                                12 872             252 608        265 480
Total equity and liabilities                                           57 490 164           (270 788)     57 219 376
Number of shares in issue ('000)                                        3 404 630            (55 520)      3 349 110
Net asset value per share (cents)                                          976,03              (0,94)         975,09
Net tangible asset value per share (cents)                                 819,52              (3,54)         815,98

EXTERNAL AUDITORS

The appointment of KPMG Inc. as the group's external auditors commencing for the financial year
ending 31 August 2016 was confirmed by shareholders at the annual general meeting held on
18 February 2016.

BASIS OF PREPARATION

The summary consolidated financial statements are prepared in accordance with the JSE Listings
Requirements for provisional reports and the requirements of the Companies Act applicable
to summary financial statements. The JSE Listings Requirements require provisional reports to be
prepared in accordance with the framework concepts and the measurement and recognition
requirements of International Financial Reporting Standards (IFRS) and the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements
as issued by the Financial Reporting Standards Council, and to also, as a minimum, contain the
information required by IAS 34 Interim Financial Reporting. The accounting policies applied in the
preparation of the consolidated financial statements from which the summary financial statements
are derived are in terms of IFRS and are consistent with those applied in the previous consolidated
financial statements.

This summarised report is extracted from the audited information, but is not itself audited. The
consolidated financial statements are audited by KPMG Inc., who expressed an unmodified opinion
thereon. The auditor's report does not necessarily report on all the information contained in these
summary consolidated financial statements. Shareholders are therefore advised that in order to
obtain a full understanding of the nature of the auditor's engagement, they should obtain a copy of
the auditor's report together with the accompanying audited consolidated financial statements, bot
of which are available for inspection at the company's registered office. The directors of Redefine
Properties Limited take full responsibility for the preparation of this report and that the selected
financial information has been correctly extracted from the underlying consolidated financial
statements.

By order of the Board

Leon Kok (CA(SA)), Redefine's financial director, was responsible for supervising the preparation of
these summary consolidated financial statements.

Redefine Properties Limited

3 November 2016

Executive directors:
M Wainer (Executive Chairman)
A J Konig (CEO)
L C Kok (FD),
D H Rice+ (COO)
M J Ruttell(@)

Non-executive directors:
M Barkhuysen*
N B Langa-Royds*
H K Mehta*,
P Langeni*
B Nackan (Lead independent)*
D A Nathan*
G Z Steffens(#)*
M J Watters
*Independent  +British  (@)Irish  (#)German
   
                                                                                                  
Registered office:
3rd Floor, Redefine Place, Arnold Road, Rosebank, 2196
(PO Box 1731, Parklands, 2121)

Transfer secretaries:
Computershare Investor Services Proprietary Limited

Sponsor:
Java Capital

Company secretary:
B Baker

http://www.redefine.co.za



Date: 03/11/2016 07:15:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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