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REDEFINE PROPERTIES LIMITED - Condensed unaudited Group results for the six months ended 28 February 2019

Release Date: 06/05/2019 07:05
 
Wrap Text
Condensed unaudited Group results for the six months ended 28 February 2019

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

Condensed unaudited Group results
for the six months ended 28 February 2019


Highlights

Active portfolio margin maintained at 82.2%

Deployed R3.5 billion into property assets

Moody's investment grade credit rating reaffirmed

Top employer status maintained

Sipho Pityana appointed as independent non-executive Chairman

Commentary

Profile
Redefine is a leading South African-based Real Estate Investment Trust (REIT), with a diverse, property
asset platform valued at R92.0 billion (FY18: R91.3 billion). Redefine's portfolio is anchored domestically
in directly held retail, office and industrial properties, and is complemented by property investments in
Poland, the United Kingdom (UK) and Australia.

Redefine's primary goal is to grow and improve cash flows, which will deliver quality earnings, growth
in distributions, and sustain long-term growth in total returns for shareholders.

Redefine is listed on the Johannesburg Stock Exchange (JSE), has a market capitalisation of R57.0 billion
(FY18: R56.2 billion) and is ranked in the JSE Top 40 index. By volume, Redefine shares are
among the most actively traded on the JSE, making it a highly liquid single entry point for investors to
gain exposure to domestic and multiple international real estate markets.

At 28 February 2019, Redefine's diversified local property assets were valued at R72.9 billion 
(FY18: R72.4 billion). The Group's international real estate investments, valued at R19.1 billion 
(FY18: R18.9 billion) represented 20.7% (FY18: 20.7%) of total property assets, providing geographic
diversification into the Polish, UK, Australian and African markets.

Financial results
The Redefine board of directors has declared a distribution of 49.19 (HY18: 47.30) cents per share for
the six months ended 28 February 2019, an increase of 4.0% (HY18: 5.5%) on the previous comparable
period which is in line with market guidance. Total revenue and gross distributable income showed
growth of 11.7% (HY18: 9.6%) and 4.8% (HY18: 8.6%) respectively.

Redefine's property portfolio contributed 97.8% (HY18: 98.0%) of total revenue, with the remaining 2.2%
(HY18: 2.0%) arising from investment income.

The operating cost margin declined marginally to 34.7% (HY18: 33.9%) of contractual rental income.
Net of electricity and utility recoveries, operating costs were 16.8% (HY18: 17.3%) of contractual rental
income.

Redefine's international property investments contributed 25.4% (HY18: 25.3%) to distributable income.

                                                                          28 February        28 February   
                                                                                 2019               2018   
                                                                                    %                  %   
Property cost-to-income ratios                                                                             
Gross cost-to-income ratio                                                       34.7               33.9   
Net cost-to-income ratio                                                         16.8               17.3   
Total cost-to-income ratios                                                                                
Gross cost-to-income ratio                                                       38.2               36.4   
Net cost-to-income ratio                                                         21.6               20.9
   
The above cost-to-income ratios are calculated in accordance with the SA REIT Association's Best   
Practice Recommendations.                                                                                  


Changes in fair value
The Group's property portfolio was independently valued by external valuers at 28 February 2019
resulting in a net increase in value of R185.4 million (HY18: R1.3 billion). In terms of IAS 40 and
IFRS 13, Redefine's investment properties are measured at fair value through profit or loss using
valuation inputs which are categorised as level 3 in the fair value hierarchy. There were no transfers
between levels 1, 2 and 3 during the year.

The exchangeable bonds issued by Redefine were fair valued at 28 February 2019 resulting in a
R146.8 million (HY18: R174.5 million) decrease in the liability. The exchangeable bonds are measured
at fair value through profit and loss. The fair value is determined with reference to the Bloomberg
Valuation Service price and has been classified as level 1.

The fair value of the investment in listed securities decreased by R645.7 million (HY18: R257.7 million)
mainly driven by the decrease in the Delta Property Fund Limited ("Delta") share price. The Group's
derivatives, which protect the Group against adverse movements in interest and foreign exchange
rates, were valued using the swap curve and forward pricing methods respectively, resulting in a
decrease of R365.0 million (HY18: R397.1 million) in the Group's liabilities. In terms of IFRS 9 and IFRS
13, Redefine's listed security investments and derivatives are measured at fair value through profit or
loss and are categorised as level 1 and level 2 respectively.

The balance of the fair value movements relates to gains on foreign unlisted investments of
R103.8 million (HY18: R11.8 million).

South African property portfolio
The active portfolio vacancy rate increased during the period to 5.7% (FY18: 4.5%). Leases covering
225 363m(2) (HY18: 269 209m(2)) were renewed during the year at an average rental decrease of 6.0%
(HY18: 0.3% increase) while the tenant retention rate was a pleasing 96.6% (HY18: 94.7%). A further
231 354m(2) (HY18: 205 213m(2)) was let across the portfolio. The student accommodation portfolio
had an average occupancy of 79.0% (FY18: 91.7%) as at 28 February 2019. Net arrears amounted to
R90.9 million (HY18: R76.0 million), representing 11.5% (HY18: 10.1%) of gross monthly rentals.

GEOGRAPHIC SPREAD BY VALUE
Gauteng                                              73%
Cape                                                 18%
KwaZulu-Natal                                         4%
Other                                                 5%

SECTORAL SPREAD BY VALUE
Retail                                               39%
Office                                               37%
Industrial                                           19%
Specialised                                           5%

*Specialised includes a hospital, a hotel and student accommodation.


LEASE EXPIRY PROFILE BY GLA (m(2))
                                Office         Retail     Industrial     Specialised            Total    
Monthly                         87 055         50 947         29 839                -         167 841     
2019                            69 680         48 388         86 588                -         204 656     
2020                           194 592        205 084        170 387              167         570 230     
2021                           149 301        217 124        181 695           27 330         575 450     
2022                           163 225        245 643        272 872              380         682 120     
2023                            96 374        168 129        104 515                -         369 018     
Beyond 2023                    339 093        394 254        954 189                -       1 687 536     
Vacancy                        203 102         63 173         33 287            1 908         301 470     
                             1 302 422      1 392 742      1 833 372           29 785       4 558 321     


WEIGHTED AVERAGE VACANCY PER SECTOR
                                                      Strategic vacancies                             
                                28 February          Vacant                                             
                                2019 before      properties          Vacant                             
                                  strategic           under      properties   28 February   31 August   
Sector                            vacancies   redevelopment   held-for-sale          2019        2018   
Office                                15.6%            1.9%            1.6%         12.1%        9.5%   
Retail                                 4.6%               -               -          4.6%        4.5%   
Industrial                             1.8%               -               -          1.8%        1.0%   
Specialised                            6.4%               -               -          6.4%           -   
                                       6.6%            0.5%            0.4%          5.7%        4.5%   


Redefine continues to advance its strategy of diversifying, growing and improving the quality of the
property portfolio. Management's primary focus domestically was on protecting, expanding and
improving existing well-located properties mainly through development and redevelopment activities.

Acquisitions: Two industrial properties with a total GLA of 17 215m(2) were acquired for an aggregate
purchase consideration of R130.0 million, at an average yield of 9.7%.

New developments: Developments with a total value of R1.7 billion and an initial yield of 8.6% were
completed during the period. Infrastructure projects at the S&J Jupiter site and Matlosana Mall were
completed costing R87.6 million. Projects in progress total R943.7 million at an average initial yield of
8.9%. In addition, infrastructure projects totalling R272.2 million for the S&J and Atlantic Hills sites
are currently under way.

Redevelopments: Projects in progress total R791.1 million with an average initial yield of 6.0%. Future
committed projects total R68.1 million with a projected initial yield of 3.0%.

Held-for-trading: During the period, two parcels of vacant land which had been classified as held-for-
trading were disposed of for a consideration of R65.2 million realising a profit of R23.2 million. Subject
to the usual conditions precedent, Redefine has agreed to dispose of a further R15.1 million of vacant
land after the period-end.

Disposals: Five properties with a GLA of 66 948m(2), which no longer served Redefine's investment
criteria, were disposed of during the year to various buyers for an aggregate consideration of
R390.0 million, at an average yield of 9.8%. Redefine disposed of 50.0% of its share in the newly
developed Loftus Hotel for R45.5 million as well as a portion of land for R24.4 million. Agreements,
subject to the usual conditions precedent, were concluded for the disposal of eight properties for an
aggregate consideration of R383.4 million covering a GLA of 55 406m(2) at an average yield of 6.1% and
one portion of vacant land for a total consideration of R42.0 million.

Student accommodation: The development of Roscommon House in Claremont, which partially
opened for trading during February 2019, has 582 beds with a total development cost of R231.7 million
and an projected yield of 10.0%. Paton House in Pietermaritzberg, a future committed project, at a
cost of R108.1 million has an estimated initial yield of 10.6% and 538 beds. Subject to town planning
approval, Redefine plans to develop phase 2 of Yale Village in Johannesburg at a cost of R53.9 million
on an 8.9% initial yield and 196 beds. During the period, a property was purchased for R33.0 million
which will be developed in the future.

Sustainability: Redefine has continued to invest in long-term renewable energy solutions and has
added an additional 1MWp of Solar PV capacity increasing our total capacity to 23,5 MWp. We will
continue with similar investments in the second half of the year and plan to pilot energy storage
technologies as another alternative in the second half of 2019. We continue to pursue green building
certifications and have recently submitted 30 buildings for Existing Building Performance Green Star
ratings, the largest ever single batch submission received by the GBCSA. We continue to implement
energy and water efficiency projects to reduce our impact on precious natural resources as is evident
in our reported energy savings of 7 182 MWh in 2018.

International property portfolio
Redefine continues to progress its strategy of geographic diversification and exploiting attractive yield
spreads in hard currency markets.

The Polish Logistics Platform's active portfolio vacancy was 6.8% (FY18: 1.5%) at 28 February 2019.

New developments: In Poland, phase 1 of the Strykow development, with a GLA of 77 673m(2) was
completed during the period at a total cost of EUR35.6 million (R564.6 million) and an initial yield of 6.3%.
A further three of the exclusive priority right development projects agreed with Panattoni Development
Europe sp.zo.o are in progress, with a total GLA of 143 664 m(2) and a total estimated development cost
of EUR98.8 million (R1.6 billion) and is expected to achieve an initial income yield of 6.8%.

Student accommodation: Redefine has continued with the development of its Australian student
accommodation investment through its 90% beneficial interest in Journal Student Accommodation
Fund. The Leicester Street development was completed during the period, at a total cost of R1.3 billion
(AUD130.0 million) and began trading in February 2019 with 804 beds with an average occupancy rate
of 78.0%. The Swanston Street facility at a total development cost of R1.1 billion (AUD110.0 million),
will have 587 beds and it is anticipated that it will be completed in time for the 2020 student intake.

LEASE EXPIRY PROFILE BY GLA (m(2))
                                                         Logistics platform    
2019                                                                 40 181    
2020                                                                 34 420    
2021                                                                 39 701    
2022                                                                 91 891    
2023                                                                 42 085    
Beyond 2023                                                         116 233    
Vacancy                                                              26 673    
                                                                    391 184    


Investments in associates and joint ventures
                                                                   2019                     2018             
                                                             Carrying   Shares        Carrying   Shares   
                                                                value     held           value     held   
                                        Stock exchange          R'000        %           R'000        %   
EPP                                      LuxSE and JSE      7 498 902     44.4       6 996 725     39.0   
RDI REIT Plc (RDI)                         LSE and JSE      3 355 288     29.4       3 958 407     29.4   
Oando Wings Development Limited             Not listed        453 242     39.9         553 498     38.9   
                                                           11 307 432               11 508 630            


EPP: During January 2019, Redefine acquired an additional 44 291 338 shares for a total consideration
of R1.0 billion (EUR64.9 million). Subsequent to the reporting period, on 24 April 2019, EPP conducted
an accelerated book build and issued 77 956 989 new shares. On 3 May 2019, Redefine acquired an
additional 44 291 339 shares for a total consideration of R1.0 billion (EUR64.9 million) bringing its effective
shareholding to 45.4%.

RDI: In accordance with IAS 36 Impairment of Assets and given the prolonged decline in the share
price of RDI as well as the existence of other impairment indicators, the carrying value of RDI
was subject to impairment testing, by comparing the carrying amount to the recoverable amount,
being value-in-use. A discounted cash flow calculation was performed considering the forecasted
future expected cash flows which were discounted at relevant market rates in order to calculate
the value-in-use. The carrying amount of RDI was accordingly impaired by R194.0 million (FY18:
R753.8 million).

Equity-accounted profit: The equity-accounted profit decreased substantially from the prior
comparable period, mainly due to the sale of Cromwell and Cromwell Partner's Trust during 2018.

Exchange rates: The Rand appreciated when compared to the prior period and as a result, Redefine's
proportionate share of the underlying foreign currency denominated associates' net assets decreased.
This decrease was largely neutralised by the natural hedge created by the foreign currency denominated
debt held against these assets, as it decreased similarly.


                                                                    28 February             31 August   
Foreign currency                                                           2019                  2018   
AUD                                                                      9.9668               10.6736   
EUR                                                                     15.8708               17.1709   
GBP                                                                     18.5624               19.1406   
USD                                                                     13.9515               14.7074   


Interest-bearing borrowings
Redefine's interest-bearing borrowings (net of cash and cash equivalents and including the fair value
of cash settled hedges) represented 42.3% (FY18: 40.0%) of the value of its property asset platform
at 28 February 2019. The Group's property asset platform is made up of property, listed and unlisted
property shares, loans receivable, and interests in associates and joint ventures. The average cost of
Rand-denominated funding is 9.2% (FY18: 9.3%), interest rates are hedged on 79.2% (FY18: 81.9%) of
local borrowings for an average period of 2.6 years (FY18: 2.3 years). Including foreign currency debt
and derivatives, the average cost of debt is 6.2% (FY18: 6.3%). Interest rates are hedged on 78.2%
(FY18: 81.2%) of total borrowings for an average period of 2.9 years (FY18: 2.8 years). The interest cover
ratio (which includes equity-accounted dividends and listed security income) is 4.6x (FY18: 4.3x).

Redefine had unutilised committed bank facilities of R5.8 billion (FY18: R3.8 billion) at 28 February
2019 which provides assurance that the Group will be able to meet its short-term commitments.

Moody's credit rating
On 23 April 2019, Moody's issued its latest credit opinion for Redefine and confirmed the rating as
follows:

Global long-term:                 Baa3
Global short-term:                P-3
National long-term:               Aa1.za
National short-term:              P-1.za
Outlook:                          Stable

Moody's has maintained a Baa3 long-term global rating for the EUR150.0 million senior secured
exchangeable bonds issued by Redefine.

Equity raises
There were no share issues during the period and given Redefine's share price at the time, the Board
resolved not to offer a dividend reinvestment alternative to shareholders for the December 2018
dividend payment.

Capital commitments
Capital development commitments outstanding amount to R3.1 billion (FY18: R3.2 billion). Future
commitments will be funded by undrawn banking facilities and proceeds from capital recycling
activities.

Broad-based black economic empowerment (B-BBEE)
Redefine is currently rated as a level three (FY18: level four) B-BBEE contributor under the revised
Property Sector codes that were promulgated during 2017. Redefine will continue to actively contribute
to the growth of the organisation and country by conducting its business in a manner that promotes
transformation and further aims to maintain its rating through sustainable and inclusive business
practices.

Prospects
While policy and political uncertainty has somewhat decreased, decision-makers have adopted a "wait
and see" approach, until after the elections to make long-term decisions. Broad-based weakness in
business confidence is a persistent trend which is fuelled by the the slow pace of structural reforms,
power blackouts and higher inflationary pressures. Household consumption remains constrained by
the VAT increase from 14% to 15%, exorbitant fuel price increases and the recently announced increase
in electricity tariffs. Dampened confidence and floundering investment spending are negative factors
for local property fundamentals as-well-as economic growth in the medium term. With this backdrop
we believe that our purpose-driven strategic approach remains appropriate for the environment in
which we are operating.

We are pleased to report that Redefine has delivered its market guidance of 4% growth (49.19 cents
per share) in distribution per share for the first half of 2019. We anticipate maintaining this growth rate
for the full 2019 financial year.

There is one certainty and that is that it will remain an uncertain environment in which to operate
for some time to come. Uncertainty delivers challenges, but through a purpose-driven strategy,
Redefine is well-positioned to take advantage of the resultant opportunities and we remain focused on
what matters most (operate efficiently, invest strategically, optimise capital, engage talent and grow
reputation) to stay a step ahead of the unexpected.

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
The Board have declared a gross dividend of 49.19000 cents per share for the six months ended
28 February 2019 (the dividend).

In accordance with Redefine's status as a REIT, shareholders are advised that the dividend meets the
requirements of a "qualifying distribution" for the purposes of section 25BB of the Income Tax Act,
No. 58 of 1962 (Income Tax Act). The distribution on the shares will be deemed to be a dividend for
South African tax purposes, in terms of section 25BB of the Income Tax Act.

The dividend received by or accrued to South African tax residents must be included in the gross
income of such shareholders and will not be exempt from income tax (in terms of the exclusion to
the general dividend exemption, contained in paragraph (aa) of section 10(1)(k)(i) of the Income Tax
Act) because it is a dividend distributed by a REIT. This dividend is, however, exempt from dividend
withholding tax in the hands of South African tax resident shareholders, provided that the South African
resident shareholders provided the following forms to their Central Securities Depository Participant
(CSDP) or broker, as the case may be, in respect of uncertificated shares, or the company, in respect
of certificated shares:

(a)   a declaration that the dividend is exempt from dividends tax; and
(b)   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 dividend, if such documents have
not already been submitted.

Dividends received by non-resident shareholders will not be taxable as income and instead will be
treated as an ordinary dividend which is exempt from income tax in terms of the general dividend
exemption in section 10(1)(k)(i) of the Income Tax Act. Assuming dividend withholding tax will
be withheld at a rate of 20% (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), the net dividend amount due to non-resident shareholders is 39.35200 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)   a declaration that the distribution is subject to a reduced rate as a result of the application of a
      DTA; and
(b)   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 distribution if
such documents have not already been submitted, if applicable.

The dividend is payable to Redefine's shareholders in accordance with the timetable set out below:

Last date to trade cum dividend                                                   Tuesday, 21 May 2019
Shares trade ex dividend                                                        Wednesday, 22 May 2019
Record date                                                                        Friday, 24 May 2019
Payment date                                                                       Monday, 27 May 2019

Shareholders may not dematerialise or rematerialise their shares between Wednesday, 22 May 2019
and Friday, 24 May 2019, both days inclusive. Payment of the dividend will be made to shareholders
on Monday, 27 May 2019. In respect of dematerialised shareholders, the dividend will be transferred
to the CSDP accounts/broker accounts on Monday, 27 May 2019. Certificated shareholders' dividend
payments will be deposited on or about Monday, 27 May 2019.

Shares in issue at the date of declaration of dividend: 5 765 799 764

Redefine's income tax reference number: 917/852/484/0

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.

Edcon
Redefine has elected to participate in the restructuring of Edcon Limited, providing an equity contribution
of approximately R54.6 million. This has been done as part of a binding agreement concluded with all
relevant stakeholders to restructure and recapitalise Edcon. Redefine will receive 100% of its rental
due from Edcon on 56 788 m2, representing the in-force leases for profitable Edcon stores. In addition
to the equity contribution, Redefine has also agreed to participate as either a delayed or reduction
landlord over a two-year period, in respect of leases totalling 21 972 m2. These leases will either expire
or Redefine has the right to take back the space prior to expiry, once a replacement tenant has been
secured, subject to a three-month notice period. This is a non-adjusting event.

Change in auditors
At the annual general meeting held on 14 February 2019, shareholders approved the appointment of
PricewaterhouseCoopers Inc., together with John Bennett as the designated audit partner as auditors
of Redefine.

Change in directorate
During the period, Bernie Nackan and Sindi Zilwa stepped down from the board. Redefine thanks
them for their valuable contributions during their terms of office and wishes them well in their future
endeavours.

With effect from 3 May 2019, we welcome Sipho Pityana who has been appointed to the board of
directors as the independent non-executive chairman. Marc Wainer will remain on the board as an
executive director and the board of directors thanks Marc for his valuable contribution, unstinting
leadership and guidance since founding Redefine and wishes him well in his new role.

Basis of preparation
These condensed consolidated unaudited interim financial statements are prepared in accordance with
International Financial Reporting Standards, IAS 34 Interim Financial Reporting, the SAICA Financial
Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as
issued by the Financial Reporting Standards Council, and the requirements of the Companies Act of
South Africa and the JSE Listings Requirements. The accounting policies applied in preparing these
interim financial statements are in terms of International Financial Reporting Standards and are
consistent with those applied in the previous financial statements except for the changes in accounting
policy relating to the new standards and interpretations which became effective to the Group for the
financial year beginning 1 September 2018 (refer to page 36).

Significant judgement, estimates and assumptions
The preparation of interim financial statements in conformity with IFRS requires management to
make judgements, estimates and assumptions that affect amounts reported in the interim financial
statements. Actual results may differ from these estimates. Judgement, estimates and assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which they were revised and in any future periods affected.

Key judgements, estimates and assumptions which have the most significant effect on the interim
financial statements include:

-  valuation of investment properties and properties under development;
-  impairment of investments in associates; and
-  significant influence and control assessment.

The directors of Redefine 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.
LC Kok (CA(SA)), Redefine's financial director, was responsible for supervising the preparation of these
condensed consolidated interim financial statements. These condensed consolidated interim financial
statements for the period ended 28 February 2019 have not been reviewed or reported on by Redefine's
independent external auditors.

By order of the Board
6 May 2019
Redefine Properties Limited

Statement of profit or loss and other comprehensive income
for the six months ended 28 February 2019
                                                                                        Unaudited         Unaudited          Audited
                                                                                      28 February       28 February        31 August
Figures in R'000                                                                             2019              2018             2018
Revenue
Property portfolio revenue                                                              4 298 646         3 855 362        8 133 099
- Contractual rental income                                                             4 143 598         3 855 469        7 879 370
- Straight-line rental income accrual                                                     155 048             (107)          253 729
Investment income                                                                          96 341            77 763          308 223
Total revenue                                                                           4 394 987         3 933 125        8 441 322
Costs
Operating costs                                                                       (1 439 880)       (1 306 237)      (2 637 956)
Administration costs                                                                    (178 342)         (124 798)        (365 144)
Net operating profit                                                                    2 776 765         2 502 090        5 438 222
Other gains                                                                                48 785            19 901          245 470
Loss on disposal of interest in associate                                                       -          (52 514)         (57 787)
Changes in fair values                                                                    155 291         1 659 102        1 679 220
Amortisation of intangible asset                                                         (31 428)          (31 428)         (62 856)
Impairments                                                                             (199 553)         (494 395)      (1 053 753)
Equity-accounted profit (net of taxation)                                                 155 353         1 548 314        2 541 427
Profit before finance costs and taxation                                                2 905 213         5 151 070        8 729 943
Net interest costs                                                                      (682 857)         (779 752)      (1 511 179)
- Interest income                                                                         472 963           467 959          919 828
- Interest expense                                                                    (1 155 820)       (1 247 711)      (2 431 007)
Foreign exchange gains/(losses)                                                           138 241           552 024         (69 254)
Profit before taxation                                                                  2 360 597         4 923 342        7 149 510
Taxation                                                                                   46 680         (199 150)        (532 682)
Profit for the period/year                                                              2 407 277         4 724 192        6 616 828
Attributable to:
- Redefine Properties Limited shareholders                                              2 372 840         4 690 515        6 575 079
- Non-controlling interests                                                                34 437            33 677           41 749
Other comprehensive income                                                              (940 494)         (717 260)        1 469 289
Items that may not be reclassified subsequently to profit or loss
Share of revaluation of property, plant and equipment
of an associate                                                                                 -             4 311            4 126
Items that are or may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations:
- Subsidiaries                                                                          (184 940)          (66 689)          155 016
- Associates                                                                            (755 554)         (654 882)          942 336
Reclassification of foreign currency differences on loss                                        -                 -          367 811

Total comprehensive income for the period/year                                          1 466 783         4 006 932        8 086 117
Attributable to:
- Redefine Properties Limited shareholders                                              1 444 243         3 982 564        8 035 162
- Non-controlling interests                                                                22 540            24 368           50 955
Earnings per share
- Basic                                                                                     43.91             88.43           123.07
- Diluted                                                                                   43.80             88.20           123.01

Statement of financial position
as at 28 February 2019
                                                                                        Unaudited         Unaudited          Audited
                                                                                      28 February       28 February        31 August
Figures in R'000                                                                             2019              2018             2018
ASSETS
Non-current assets                                                                     95 994 497        87 288 727       95 843 287
Investment properties                                                                  75 614 607        65 910 557       74 395 956
- Fair value of investment properties                                                  68 734 414        59 514 237       66 271 904
- Straight-line rental income accrual                                                   2 351 720         1 944 111        2 197 947
- Properties under development                                                          4 528 473         4 452 209        5 926 105
Listed securities                                                                       1 284 349         1 196 341        1 935 843
Goodwill and intangible assets                                                          5 714 777         5 777 633        5 746 203
Investment in associates and joint ventures                                            11 307 432        11 429 435       11 508 630
Derivative assets                                                                         109 095           126 373           34 754
Loans receivable                                                                        1 430 437         2 638 095        1 930 342
Other financial assets                                                                    318 844           131 059          218 890
Property, plant and equipment                                                             214 956            79 234           72 669
Current assets                                                                          2 721 249         1 816 024        2 300 847
Properties held-for-trading                                                               523 759           122 294           28 943
Trade and other receivables                                                               879 886           949 881        1 076 079
Loans receivable                                                                          891 539            41 711          767 806
Other financial assets                                                                          -           253 875                -
Derivative assets                                                                          44 162           124 822            6 041
Taxation receivable                                                                         1 311                 -                -
Cash and cash equivalents                                                                 380 592           323 441          421 978
Non-current assets held-for-sale                                                          455 408         4 304 959         549 089
Total assets                                                                           99 171 154        93 409 710       98 693 223
EQUITY AND LIABILITIES
Equity                                                                                 56 900 378        55 684 140       58 149 200
Shareholders' interest                                                                 56 404 502        55 265 885       57 677 363
Stated capital                                                                         44 329 101        43 411 827       44 329 101
Accumulated profit                                                                     12 293 025        13 328 202       12 617 787
Other reserves                                                                          (217 624)       (1 474 144)          730 475
Non-controlling interests                                                                 495 876           418 255          471 837
Non-current liabilities                                                                35 599 730        27 667 420       35 513 831
Interest-bearing borrowings                                                            31 716 141        24 503 385       31 151 253
Interest-bearing borrowings at fair value                                               2 355 961         2 079 117        2 502 753
Derivative liabilities                                                                    627 306           272 059          907 687
Other financial liabilities                                                                82 492            11 638           86 167
Deferred taxation                                                                         817 830           801 221          865 971
Current liabilities                                                                     6 671 046        10 058 150        5 030 192
Trade and other payables                                                                1 550 764         1 300 759        2 278 322
Interest-bearing borrowings                                                             4 806 572         8 100 433        2 469 899
Interest accrual on interest-bearing borrowings                                           270 251           382 800          262 081
Derivative liabilities                                                                     31 149            19 112           13 852
Other financial liabilities                                                                12 310           253 875                -
Taxation payable                                                                                -             1 171            6 038
Total equity and liabilities                                                           99 171 154        93 409 710       98 693 223
Number of shares in issue^ ('000)                                                       5 404 403         5 321 701        5 404 403
Net asset value per share
(excluding deferred tax and NCI) (cents)                                                 1 058.81          1 053.56         1 083.25
Net tangible asset value per share (excluding deferred tax,
NCI and goodwill and intangible assets) (cents)                                            953.07            944.99           976.93

^ Net of 361 396 896 (HY18 and FY18: 361 396 896) treasury shares.


Statement of changes in equity
for the six months ended 28 February 2019
                                                                                                 Foreign                                                                               
                                                                                                currency   Share-based      Share of                          Non-   
                                                                               Accumulated   translation       payment   associates'   Shareholders'   controlling   
Figures in R'000s                                             Stated capital        profit       reserve       reserve      reserves        interest     interests   Total equity
  
Balance as at 31 August 2017                                      43 070 822    11 137 593     (814 377)        52 875      (11 176)      53 435 737       350 448     53 786 185   
Total comprehensive income for the period                                  -     4 690 515     (712 262)             -         4 311       3 982 564        24 368      4 006 932   
Profit for the period                                                      -     4 690 515             -             -             -       4 690 515        33 677      4 724 192   
Other comprehensive income for the period                                  -             -     (712 262)             -         4 311       (707 951)       (9 309)      (717 260)   
Transactions with owners (contributions and distributions)           341 005   (2 499 370)             -      (10 971)        17 456     (2 151 880)             -    (2 151 880)   
Issue of ordinary shares                                             341 005             -             -             -             -         341 005             -        341 005   
Dividends                                                                  -   (2 495 166)             -             -             -     (2 495 166)             -    (2 495 166)   
Recognition of share-based payments                                        -       (5 999)             -      (10 971)             -        (16 970)             -       (16 970)   
Disposal of investment in associates                                       -         1 795             -             -       (1 795)               -             -              -   
Share of post-acquisition change in net assets of associate                -             -             -             -        19 251          19 251             -         19 251   
Transactions with owners (changes in ownership interests)                  -         (536)             -             -             -           (536)        43 439         42 903   
Disposal of subsidiary with NCI                                            -             -             -             -             -               -        60 689         60 689   
Acquisition of subsidiary with NCI                                         -         (536)             -             -             -           (536)      (17 250)       (17 786)   
Balance as at 28 February 2018                                    43 411 827    13 328 202   (1 526 639)        41 904        10 591      55 265 885       418 255     55 684 140   
Total comprehensive income for the period                                  -     1 884 564     2 168 219             -         (185)       4 052 598        26 587      4 079 185   
Profit for the period                                                      -     1 884 564             -             -             -       1 884 564         8 072      1 892 636   
Other comprehensive income for the period                                  -             -     2 168 219             -         (185)       2 168 034        18 515      2 186 549   
Transactions with owners (contributions and distributions)           917 274   (2 531 960)             -        16 459        20 126     (1 578 101)      (75 125)    (1 653 226)   
Issue of ordinary shares                                             917 274             -             -             -             -         917 274             -        917 274   
Dividends                                                                  -   (2 536 086)             -             -             -     (2 536 086)      (75 125)    (2 611 211)   
Recognition of share-based payments                                        -             -             -        16 459             -          16 459             -         16 459   
Disposal of investment in an associate                                     -         4 126             -             -       (4 126)               -             -              -   
Share of post-acquisition change in net assets of associate                -             -             -             -        24 252          24 252             -         24 252   
Transactions with owners (changes in ownership interests)                  -      (63 019)             -             -             -        (63 019)       102 120         39 101   
Acquisitions of subsidiary with NCI                                        -      (63 019)             -             -             -        (63 019)      (63 815)      (126 834)   
Disposal of subsidiary with NCI                                            -             -             -             -             -               -       165 935        165 935   
Balance as at 31 August 2018                                      44 329 101    12 617 787       641 580        58 363        30 532      57 677 363       471 837     58 149 200   
Total comprehensive income for the period                                  -     2 372 840     (928 597)             -             -       1 444 243        22 540      1 466 783   
Profit for the period                                                      -     2 372 840             -             -             -       2 372 840        34 437      2 407 277   
Other comprehensive income for the period                                  -             -     (928 597)             -             -       (928 597)      (11 897)      (940 494)   
Transactions with owners (contributions and distributions)                 -   (2 697 221)             -      (19 960)           458     (2 716 723)             -    (2 716 723)   
Dividends                                                                  -   (2 691 392)             -             -             -     (2 691 392)             -    (2 691 392)   
Recognition of share-based payments                                        -       (5 829)             -      (19 960)             -        (25 789)             -       (25 789)   
Disposal of associate                                                      -             -             -             -             -               -             -              -   
Share of post-acquisition change in net assets of associate                -             -             -             -           458             458             -            458   
Transactions with owners (changes in ownership interests)                  -         (381)             -             -             -           (381)         1 499          1 118   
Acquisitions of subsidiary with NCI                                        -         (381)             -             -             -           (381)         1 499          1 118   
Balance as at 28 February 2019                                    44 329 101    12 293 025     (287 017)        38 403        30 990      56 404 502       495 876     56 900 378   

                                                                   Unaudited     Unaudited       Audited   
                                                                 28 February   28 February     31 August
Figures in R'000                                                        2019          2018          2018
Dividend per share (cents)                                             49.19         47.30         97.10   
Interim^                                                               49.19         47.30         47.30   
Final                                                                      -             -         49.80   

^ The interim dividend is declared post the reporting period and is therefore a non-adjusting subsequent event.   


Statement of cash flows
for the six months ended 28 February 2019
                                                                                             Unaudited      Unaudited        Audited   
                                                                                           28 February    28 February      31 August   
Figures in R'000                                                                                  2019           2018           2018   
CASH FLOWS FROM OPERATING ACTIVITIES                                                                                                   
Cash generated from operations                                                               2 178 064      2 662 365      6 399 525   
Interest received                                                                              352 624        414 351        738 279   
Interest paid                                                                              (1 150 849)    (1 201 611)    (2 602 039)   
Taxation refunded/(paid)                                                                         6 725       (46 005)      (569 083)   
Dividends and interest received from associates                                                                                        
and joint ventures                                                                             477 217        597 794      1 016 328   
Net cash inflow from operating activities                                                    1 863 781      2 426 894      4 983 010   

CASH FLOWS FROM INVESTING ACTIVITIES                                                                                                   
Acquisition and development of investment properties                                       (2 413 067)    (2 146 115)    (5 879 783)   
Acquisition of property, plant and equipment                                                   (9 079)        (8 202)       (13 720)   
Acquisition of other financial assets                                                                -      (137 211)      (138 315)   
Acquisition of subsidiary (net of cash acquired)                                                     -              -    (1 231 495)   
Investments in associates and joint ventures                                               (1 016 750)      (175 055)      (987 570)   
Proceeds on disposal of investment properties                                                  547 895      2 293 983      2 826 030   
Proceeds on disposal of non-current assets held-for-sale                                                                               
(other than investment property)                                                                     -              -      3 888 275   
Proceeds on disposal of listed securities                                                        5 794              -         33 789   
Proceeds on the disposal of property, plant and equipment                                            -              -            249   
Proceeds on disposal of shares in associates and joint ventures                                      -        165 730      2 007 117   
Other financial liabilities raised on investments made                                           3 848              -         44 257   
Loans receivables repaid                                                                       663 039         30 732        369 496   
Loans receivables advanced                                                                   (282 058)      (927 377)    (1 016 073)   
Net cash outflow from investing activities                                                 (2 500 378)      (903 515)       (97 743)   

CASH FLOWS FROM FINANCING ACTIVITIES                                                                                                   
Shares issued                                                                                        -        341 005      1 258 279   
Dividends paid                                                                             (2 691 392)    (2 495 166)    (5 031 252)   
Shares issued to non-controlling interests                                                       1 498         60 689        148 685   
Disposal of non-controlling interests                                                            (381)       (17 784)       (66 681)   
Dividends paid to non-controlling interests                                                          -              -       (75 125)   
Loans repaid to non-controlling interests                                                        1 707              -              -     
Interest-bearing borrowings raised                                                           4 342 752      3 569 782      8 329 784   
Interest-bearing borrowings repaid                                                         (1 021 128)    (2 817 054)    (9 072 536)   
Net cash inflow/(outflow) from financing activities                                            633 056    (1 358 528)    (4 508 846)   
Net (decrease)/increase in cash and cash equivalents                                           (3 541)        164 851        376 421   
Cash and cash equivalents at the beginning of the year                                         421 978        180 661        180 661   
Effect of foreign currency exchange fluctuations                                              (37 845)       (22 071)      (135 104)   
Cash and cash equivalents at end of period/year                                                380 592        323 441        421 978   


Earnings and headline earnings
for the six months ended 28 February 2019
                                                                                             Unaudited      Unaudited        Audited   
                                                                                           28 February    28 February      31 August   
Figures in R'000                                                                                  2019           2018           2018   
EARNINGS AND HEADLINE EARNINGS                                                                                                         
Reconciliation of basic earnings to headline earnings                                                                                  
Profit for the period/year attributable to Redefine                                                                                    
shareholders                                                                                 2 372 840      4 690 515      6 575 079   
Change in fair value of properties (net of NCI)                                              (166 066)    (1 289 607)    (2 571 822)   
- Change in fair value of properties                                                         (185 406)    (1 313 449)    (2 594 040)   
- Non-controlling interest                                                                      19 340         23 842         22 218   
Bargain purchase on acquisition of associate                                                         -       (11 595)       (78 127)   
Bargain purchase on acquisition of subsidiaries (net of NCI)                                         -              -       (13 392)   
- Bargain purchase on acquisition of subsidiaries                                                    -              -       (14 097)   
- Non-controlling interest                                                                           -              -            705   
Loss on disposal of interest in associates                                                           -         52 514         57 787   
Profit on dilution of ownership interest in an associate                                             -       (43 515)        123 403   
Adjustment of measurements, included in equity-accounted                                                                               
earnings of associates (net of tax)                                                          (250 210)    (1 099 970)    (1 467 593)   
-  Adjustment of measurements, included in equity-                                                                                     
accounted earnings of associates                                                             (351 862)    (1 401 382)    (1 651 975)   
- Tax adjustment                                                                               101 652        301 412        184 382   
Impairments                                                                                    199 553        494 395      1 053 753   
Headline earnings attributable to Redefine shareholders                                      2 156 117      2 792 737      3 679 088   
Actual number of shares in issue ('000)*                                                     5 404 403      5 321 701      5 404 403   
Weighted average number of shares in issue ('000)*                                           5 404 403      5 304 452      5 342 395   
Diluted weighted average number of shares in issue ('000)*                                   5 420 708      5 318 597      5 356 688   
Continued and discontinued earnings per share (cents)                                                                                  
Basic earnings per share                                                                         43.91          88.43         123.07   
Diluted earnings per share                                                                       43.80          88.20         123.01   
Headline earnings per share                                                                      39.90          52.65          68.87   
Diluted headline earnings per share                                                              39.80          52.52          68.70   
                      
* Net of 361 396 896 (HY18 and FY18: 361 396 896) treasury shares.                                             


Segmental analysis                                                                                                                                                                                 
for the six months ended 28 February 2019  
                                                                                                                                                        
Figures in R'000s                                                                    Office       Retail      Industrial   Specialised   Head office         Local   International         Total   
STATEMENT OF FINANCIAL POSITION                                                                                                                                                                    
Investment properties                                                            25 368 759   27 683 324      12 314 487     2 608 888             -    67 975 458       3 110 676    71 086 134   
Properties under development                                                        244 232      247 415       1 236 889       240 840             -     1 969 376       2 559 097     4 528 473   
Listed securities                                                                         -            -               -             -       406 728       406 728         877 621     1 284 349   
Goodwill and intangible assets                                                    1 913 810    2 883 662         510 710        60 888       345 707     5 714 777               -     5 714 777   
Investment in associates and joint ventures                                               -            -               -             -             -             -      11 307 432    11 307 432   
Loans receivable                                                                          -            -               -             -     1 446 030     1 446 030         875 946     2 321 976   
Non-current assets held-for-sale                                                    307 581       42 000          75 844             -             -       425 425          29 983       455 408   
Properties held-for-trading                                                               -            -          95 628       428 131             -       523 759               -       523 759   
Property, plant and equipment                                                       100 947            -               -        42 108        62 687       205 742           9 214       214 956   
Other assets                                                                              -            -               -             -     1 025 367     1 025 367         708 523     1 733 890   
Total assets                                                                     27 935 329   30 856 401      14 233 558     3 380 855     3 286 519    79 692 662      19 478 492    99 171 154   
Interest-bearing borrowings                                                                                            -             -    29 498 238    29 498 238       7 024 475    36 522 713   
Interest-bearing borrowings at fair value                                                 -            -               -             -             -             -       2 355 961     2 355 961   
Other liabilities                                                                         -            -               -             -     2 387 040     2 387 040       1 005 062     3 392 102   
Total liabilities                                                                         -            -               -             -    31 885 278    31 885 278      10 385 498    42 270 776   
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME                                                                                                                                         
Contractual rental income                                                         1 409 725    1 693 046         710 689       135 376             -     3 948 836         194 762     4 143 598   
Straight-line rental income accrual                                                  17 636       30 937          68 448       (9 300)             -       107 721          47 327       155 048   
Investment income                                                                         -            -               -             -        63 842        63 842          32 499        96 341   
Total revenue                                                                     1 427 361    1 723 983         779 137       126 076        63 842     4 120 399         274 588     4 394 987   
Operating costs                                                                   (437 279)    (668 852)       (206 254)      (56 345)             -   (1 368 730)        (71 150)   (1 439 880)   
Administration costs                                                                      -            -               -             -     (135 586)     (135 586)        (42 756)     (178 342)   
Net operating profit                                                                990 082    1 055 131         572 883        69 731      (71 744)     2 616 083         160 682     2 776 765   
Other gains                                                                               -            -               -             -        38 394        38 394          10 391        48 785   
Loss on disposal of interests in associates and joint ventures                            -            -               -             -             -             -               -             -   
Changes in fair values                                                              103 215    (190 871)         212 640        69 544     (605 422)     (410 894)         566 185       155 291   
Amortisation of intangible assets                                                         -            -               -             -      (31 428)      (31 428)               -      (31 428)   
Impairments                                                                               -            -               -             -       (5 544)       (5 544)       (194 009)     (199 553)   
Equity-accounted profit (net of taxation)                                                 -            -               -             -             -             -         155 353       155 353   
Profit before finance costs and taxation                                          1 093 297      864 260         785 523       139 275     (675 744)     2 206 611         698 602     2 905 213   
Interest income                                                                           -            -               -             -       405 602       405 602          67 361       472 963   
Interest expense                                                                          -            -               -             -     (990 690)     (990 690)       (165 130)   (1 155 820)   
Foreign exchange losses                                                                   -            -               -             -             -             -         138 241       138 241   
Profit before taxation                                                            1 093 297      864 260         785 523       139 275   (1 260 832)     1 621 523         739 074     2 360 597   
Taxation                                                                                  -            -               -             -      (18 249)      (18 249)          64 929        46 680   
Profit for the period                                                             1 093 297      864 260         785 523       139 275   (1 279 081)     1 603 274         804 003     2 407 277   
Non-controlling interests                                                                 -            -               -             -      (31 127)      (31 127)         (3 310)      (34 437)   
Profit for the period attributable to Redefine Properties Limited shareholders    1 093 297      864 260         785 523       139 275   (1 310 208)     1 572 147         800 693     2 372 840   


Segmental analysis                                                                                                                                                                                 
for the six months ended 28 February 2018        
                                                                                                                                                  
Figures in R'000s                                                                    Office       Retail      Industrial   Specialised   Head office         Local   International         Total   
STATEMENT OF FINANCIAL POSITION                                                                                                                                                                    
Investment properties                                                            22 307 903   25 948 577      11 049 015     2 152 853             -    61 458 348               -    61 458 348   
Properties under development                                                      1 088 276      758 270       1 457 795       372 482             -     3 676 823         775 386     4 452 209   
Listed securities                                                                         -            -               -             -       972 259       972 259         224 082     1 196 341   
Goodwill and intangible assets                                                    1 913 810    2 883 662         510 710        60 888       408 563     5 777 633               -     5 777 633   
Investment in associates and joint ventures                                               -            -               -             -             -             -      11 429 435    11 429 435   
Loans receivable                                                                          -            -               -             -     1 843 503     1 843 503         836 303     2 679 806   
Non-current assets held-for-sale                                                    498 000            -          32 000             -             -       530 000       3 774 959     4 304 959   
Properties held-for-trading                                                               -            -         122 294             -             -       122 294               -       122 294   
Property, plant and equipment                                                             -            -               -             -        78 001        78 001           1 233        79 234   
Other assets                                                                              -            -               -             -     1 703 389     1 703 389         206 062     1 909 451   
Total assets                                                                     25 807 989   29 590 509      13 171 814     2 586 223     5 005 715    76 162 250      17 247 460    93 409 710   
Interest-bearing borrowings                                                               -            -               -             -    24 836 992    24 836 992       7 766 826    32 603 818   
Interest-bearing borrowings at fair value                                                 -            -               -             -             -             -       2 079 117     2 079 117   
Other liabilities                                                                         -            -               -             -     3 042 635     3 042 635               -     3 042 635   
Total liabilities                                                                         -            -               -             -    27 879 627    27 879 627       9 845 943    37 725 570   
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME                                                                                                                                         
Contractual rental income                                                         1 423 920    1 656 213         663 873       108 112             -     3 852 118           3 351     3 855 469   
Straight-line rental income accrual                                                (36 681)        7 806          37 277       (8 509)             -         (107)               -         (107)   
Investment income                                                                         -            -               -             -        75 188        75 188           2 575        77 763   
Total revenue                                                                     1 387 239    1 664 019         701 150        99 603        75 188     3 927 199           5 926     3 933 125   
Operating costs                                                                   (447 094)    (633 416)       (179 866)      (44 078)             -   (1 304 454)         (1 783)   (1 306 237)   
Administration costs                                                                      -            -               -             -     (113 683)     (113 683)        (11 115)     (124 798)   
Net operating profit                                                                940 145    1 030 603         521 284        55 525      (38 495)     2 509 062         (6 972)     2 502 090   
Other gains                                                                               -            -               -             -        11 350        11 350           8 551        19 901   
Loss on disposal of interests in associates and joint ventures                            -            -               -             -             -             -        (52 514)      (52 514)   
Changes in fair values                                                              286 925    1 102 642        (54 644)        17 353      (41 141)     1 311 135         347 967     1 659 102   
Amortisation of intangible assets                                                         -            -               -             -      (31 428)      (31 428)               -      (31 428)   
Impairments                                                                               -            -               -             -             -             -       (494 395)     (494 395)   
Equity-accounted profit (net of taxation)                                                 -            -               -             -             -             -       1 548 314     1 548 314   
Profit before finance costs and taxation                                          1 227 070    2 133 245         466 640        72 878      (99 714)     3 800 119       1 350 951     5 151 070   
Interest income                                                                           -            -               -             -       409 650       409 650          58 309       467 959   
Interest expense                                                                          -            -               -             -   (1 083 116)   (1 083 116)       (164 595)   (1 247 711)   
Foreign exchange gains                                                                    -            -               -             -             -             -         552 024       552 024   
Profit before taxation                                                            1 227 070    2 133 245         466 640        72 878     (773 180)     3 126 653       1 796 689     4 923 342   
Taxation                                                                                  -            -               -             -      (10 812)      (10 812)       (188 338)     (199 150)   
Profit for the period                                                             1 227 070    2 133 245         466 640        72 878     (783 992)     3 115 841       1 608 351     4 724 192   
Non-controlling interests                                                                 -            -               -             -      (34 047)      (34 047)             370      (33 677)   
Profit for the period attributable to Redefine Properties Limited shareholders    1 227 070    2 133 245         466 640        72 878     (818 039)     3 081 794       1 608 721     4 690 515   


Segmental analysis                                                                                                                                                                                
for the six months ended 31 August 2018          
                                                                                                                                                  
Figures in R'000s                                                                    Office       Retail      Industrial   Specialised   Head office         Local   International         Total   
STATEMENT OF FINANCIAL POSITION                                                                                                                                                                    
Investment properties                                                            23 818 094   27 441 765      11 386 868     2 457 628             -    65 104 355       3 365 496    68 469 851   
Properties under development                                                      1 653 690      243 316       1 675 229       498 586             -     4 070 821       1 855 284     5 926 105   
Listed securities                                                                         -            -               -             -       990 083       990 083         945 760     1 935 843   
Goodwill and intangible assets                                                    1 913 810    2 883 662         510 710        60 888       377 133     5 746 203               -     5 746 203   
Investment in associates and joint ventures                                               -            -               -             -             -             -      11 508 630    11 508 630   
Loans receivable                                                                          -            -               -             -     1 693 533     1 693 533       1 004 615     2 698 148   
Non-current assets held-for-sale                                                    378 851       84 610          23 874             -             -       487 335          61 754       549 089   
Properties held-for-trading                                                               -            -          28 943             -             -        28 943               -        28 943   
Property, plant and equipment                                                             -            -               -             -        72 037        72 037             632        72 669   
Other assets                                                                              -            -               -             -     1 123 260     1 123 260         634 482     1 757 742   
Total assets                                                                     27 764 445   30 653 353      13 625 624     3 017 102     4 256 046    79 316 570      19 376 653    98 693 223   
Interest-bearing borrowings                                                               -            -               -             -    27 723 196    27 723 196       5 897 956    33 621 152   
Interest-bearing borrowings at fair value                                                 -            -               -             -             -             -       2 502 753     2 502 753   
Other liabilities                                                                         -            -               -             -     3 504 246     3 504 246         915 872     4 420 118   
Total liabilities                                                                         -            -               -             -    31 227 442    31 227 442       9 316 581    40 544 023   
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME                                                                                                                                         
Contractual rental income                                                         2 917 649    3 297 234       1 340 892       262 405             -     7 818 180          61 190     7 879 370   
Straight-line rental income accrual                                                 122 316       41 504         106 396      (16 487)             -       253 729               -       253 729   
Investment income                                                                         -            -               -             -       157 574       157 574         150 649       308 223   
Total revenue                                                                     3 039 965    3 338 738       1 447 288       245 918       157 574     8 229 483         211 839     8 441 322   
Operating costs                                                                   (876 054)  (1 277 879)       (368 808)      (96 689)             -   (2 619 430)        (18 526)   (2 637 956)   
Administration costs                                                                      -            -               -             -     (219 753)     (219 753)       (145 391)     (365 144)   
Net operating profit                                                              2 163 911    2 060 859       1 078 480       149 229      (62 179)     5 390 300          47 922     5 438 222   
Other gains                                                                               -            -               -             -       170 113       170 113          75 357       245 470   
Loss on disposal of interests in associates and joint ventures                            -            -               -             -             -             -        (57 787)      (57 787)   
Changes in fair values                                                              876 727    1 555 349         298 296       102 918     (461 651)     2 371 639       (692 419)     1 679 220   
Amortisation of intangible assets                                                         -            -               -             -      (62 856)      (62 856)               -      (62 856)   
Impairments                                                                               -            -               -             -             -             -     (1 053 753)   (1 053 753)   
Equity-accounted profit (net of taxation)                                                 -            -               -             -             -             -       2 541 427     2 541 427   
Profit before finance costs and taxation                                          3 040 638    3 616 208       1 376 776       252 147     (416 573)     7 869 196         860 747     8 729 943   
Interest income                                                                           -            -               -             -       788 109       788 109         131 719       919 828   
Interest expense                                                                          -            -               -             -   (2 110 628)   (2 110 628)       (320 379)   (2 431 007)   
Foreign exchange losses                                                                   -            -               -             -             -             -        (69 254)      (69 254)   
Profit before taxation                                                            3 040 638    3 616 208       1 376 776       252 147   (1 739 092)     6 546 677         602 833     7 149 510   
Taxation                                                                                  -            -               -             -        51 640        51 640       (584 322)     (532 682)   
Profit for the year                                                               3 040 638    3 616 208       1 376 776       252 147   (1 687 452)     6 598 317          18 511     6 616 828   
Non-controlling interests                                                                 -            -               -             -      (50 390)      (50 390)           8 641      (41 749)   
Profit for the year attributable to Redefine Properties Limited shareholders      3 040 638    3 616 208       1 376 776       252 147   (1 737 842)     6 547 927          27 152     6 575 079   


Segmental analysis
Reconciliation of profit for the period/year to distributable earnings
                                                                                             Unaudited      Unaudited        Audited   
                                                                                              February       February         August   
Figures in R'000                                                                                  2019           2018           2018   
Profit for the period/year attributable to Redefine shareholders                             2 372 840      4 690 515      6 575 079   
Change in fair value (net of NCI)                                                            (135 950)    (1 635 260)    (1 657 002)   
Straight-line rental income accrual (net of NCI)                                             (152 682)            107      (253 729)   
Gain on bargain purchase (net of NCI)                                                                -              -       (13 392)   
Amortisation of intangible assets                                                               31 428         31 428         62 856   
Impairments                                                                                    199 553        494 395      1 053 753   
Capital gains taxation                                                                        (41 180)              -        511 429   
Deferred taxation (net of NCI)                                                                (25 251)        158 960       (46 538)   
Net unrealised foreign exchange losses/(gains) and realised                                                                            
foreign currency translations reserve (net of NCI)                                           (137 375)      (462 153)        138 624   
Distribution adjustment to equity accounted profit/loss                                        396 440      (860 269)    (1 359 487)   
Loss on disposal of interest in associate and joint venture                                          -         52 514         57 787   
Transaction costs relating to business acquisitions (net of NCI)                                13 325              -         90 107   
Antecedent distribution                                                                              -         27 170         39 628   
Accrual for listed security income (REIT distribution declared                                                                         
post-year-end)                                                                                   (703)          8 680         19 926   
Cornwall interest                                                                               27 959         15 328         25 005   
Accrual for Chariot income                                                                     110 022          7 192         18 762   
MA Afrika interest                                                                                   -              -          7 192   
Dipula BEE Trust profit share adjustment                                                             -          7 479       (42 521)   
Distributable income for the period/year                                                     2 658 426      2 536 086      5 227 479   
Interim                                                                                      2 658 426      2 536 086      2 536 085   
Final                                                                                                -              -      2 691 394   
Actual number of shares in issue ('000)                                                                                                
Interim                                                                                      5 404 403      5 361 701      5 361 701   
Final                                                                                                -              -      5 404 403   
Distribution per share (cents)                                                                   49.19          47.30          97.10   
Interim                                                                                          49.19          47.30          47.30   
Final                                                                                                -              -          49.80   


Distributable income analysis

Figures in R'000s                                                                         South Africa  International          Total   
Contractual rental income                                                                                                              
(excluding straight-line rental accrual)                                                     3 948 836        194 762      4 143 598   
Investment income                                                                               63 842         32 499         96 341   
Total revenue                                                                                4 012 678        227 261      4 239 939   
Operating costs                                                                            (1 368 730)       (71 150)    (1 439 880)   
Administration costs                                                                         (135 586)       (42 756)      (178 342)   
Net operating profit                                                                         2 508 362        113 355      2 621 717   
Other gains                                                                                     38 394         10 391         48 785   
Distributable equity income                                                                          -        551 793        551 793   
Net distributable profit before finance costs and taxation                                   2 546 756        675 539      3 222 295   
Net interest costs                                                                           (585 088)       (97 769)      (682 857)   
- Interest income                                                                              405 602         67 361        472 963   
- Interest expense                                                                           (990 690)      (165 130)    (1 155 820)   
Net distributable foreign exchange gain                                                              -          1 253          1 253   
Net distributable profit before taxation                                                     1 961 668        579 023      2 540 691   
Current taxation and withholding taxation                                                            -       (22 040)       (22 040)   
Net income from operations before non-controlling                                                                                      
interest share                                                                               1 961 668        556 983      2 518 651   
Non-controlling interest share of distributable income                                         (8 208)        (3 211)       (11 419)   
Net income before distributable adjustments                                                  1 953 460        553 772      2 507 232   
Below the line distributable income adjustments:                                                                                       
- Accrual for listed security income                                                                 -          (703)          (703)   
- Accrual for chariot income                                                                         -        110 022        110 022   
- Transaction costs                                                                              2 082         11 834         13 916   
- Cornwall interest                                                                             27 959              -         27 959   
Distributable income                                                                         1 983 501        674 925      2 658 426   


Financial instruments and investment property fair value disclosure

CATEGORIES OF FINANCIAL INSTRUMENTS                          Unaudited 28 February 2019                             Unaudited 28 February 2018                        Audited 31 August 2018                
                                                                      At fair value                                       At fair value                                     At fair value                
                                                   Loans and         through profit                     Loans and        through profit                  Loans and         through profit                
Figures in R'000                                 receivables                or loss        Total      receivables               or loss        Total   receivables                or loss        Total   
Financial assets                                                                                                                                                                                         
Listed securities                                          -              1 284 349    1 284 349                -             1 196 341    1 196 341             -              1 935 843    1 935 843   
Derivative assets                                          -                153 257      153 257                -               251 195      251 195             -                 40 795       40 795   
Loans receivable                                   2 157 604                164 372    2 321 976        2 679 806                     -    2 679 806     2 698 148                      -    2 698 148   
Other financial assets                                     -                318 844      318 844                -               384 934      384 934             -                218 890      218 890   
Trade and other receivables                          666 426                      -      666 426          752 099                     -      752 099       811 917                      -      811 917   
Cash and cash equivalents                            380 592                      -      380 592          323 441                     -      323 441       421 978                      -      421 978   
                                                   3 204 622              1 920 822    5 125 444        3 755 346             1 832 470    5 587 816     3 932 043              2 195 528    6 127 571   
                                                             
                                                             Unaudited 28 February 2019                             Unaudited 28 February 2018                        Audited 31 August 2018               
                                                       Other          At fair value                         Other         At fair value                      Other          At fair value                
                                                   financial         through profit                     financial        through profit                  financial         through profit                
Figures in R'000                                 liabilities                or loss        Total      liabilities               or loss        Total   liabilities                or loss        Total   
Financial liabilities                                                                                                                                                                                    
Interest-bearing borrowings                       36 522 713                      -   36 522 713       32 603 818                     -   32 603 818    33 621 152                      -   33 621 152   
Interest-bearing borrowings at fair value                  -              2 355 961    2 355 961                -             2 079 117    2 079 117             -              2 502 753    2 502 753   
Interest accrual on interest-bearing borrowings      270 251                      -      270 251          382 800                     -      382 800       262 081                      -      262 081   
Derivative liabilities                                     -                658 455      658 455                -               291 171      291 171             -                921 539      921 539   
Other financial liabilities                           43 372                 51 430       94 802          253 875                     -      253 875        34 880                 51 287       86 167   
Trade and other payables                           1 367 787                      -    1 367 787        1 095 835                     -    1 095 835     1 993 143                      -    1 993 143   
                                                  38 204 123              3 065 846   41 269 969       34 336 328             2 370 288   36 706 616    35 911 256              3 475 579   39 386 835   

For all financial instruments carried at amortised cost, interest is market related and, therefore, the amortised cost
reasonably approximates the fair value.

Financial instruments and investment property fair value disclosure

FAIR VALUE HIERARCHY FOR FINANCIAL INSTRUMENTS AND INVESTMENT PROPERTY
IFRS 13 requires that an entity discloses for each class of financial instrument and investment property
measured at fair value, the level in the fair value hierarchy into which the fair value measurements are
categorised in their entirety.

The fair value hierarchy reflects the significance of the inputs used in making fair value measurements.

The level in the fair value hierarchy within which the fair value measurement is categorised in its
entirety shall be determined on the basis of the lowest level input that is significant to the fair value
measurement in its entirety.

The table below analyses financial instruments and investment property carried at fair value.

The fair value hierarchy has the following levels:

Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - inputs other than quoted prices included within level 1 that are observable for the asset or
          liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

There have been no transfers between level 1, level 2 and level 3 during the period under review.

The table below analyses financial instruments and investment property carried at fair value.


FAIR VALUE HIERARCHY FOR FINANCIAL INSTRUMENTS AND INVESTMENT PROPERTY   

                                                                                  Unaudited 28 February 2019                
Figures in R'000                                                     Fair value       Level 1     Level 2        Level 3   
Assets                                                                                                                     
Investment properties*                                               76 070 015             -           -     76 070 015   
Listed securities                                                     1 284 349     1 284 349           -              -   
Derivative assets                                                       153 257             -     153 257              -   
Loans receivable                                                        164 372             -           -        164 372   
Other financial assets                                                  318 844             -           -        318 844   
                                                                     77 990 837     1 284 349     153 257     76 553 231   
Liabilities                                                                                                                
Interest-bearing borrowings at fair value                             2 355 961     2 355 961           -              -   
Derivative liabilities                                                  658 455             -     658 455              -   
Other financial liabilities                                              51 430             -           -         51 430   
                                                                      3 065 846     2 355 961     658 455         51 430   

                                                                                  Unaudited 28 February 2018                
Figures in R'000                                                     Fair value       Level 1     Level 2        Level 3   
Assets                                                                                                                     
Investment properties*                                               66 507 567             -           -     66 507 567   
Listed securities                                                     1 196 341     1 196 341           -              -   
Derivative assets                                                       251 195             -     251 195              -   
Loans receivable                                                              -             -           -              -   
Other financial assets                                                  384 934       253 875           -        131 059   
                                                                     68 340 037     1 450 216     251 195     66 638 626   
Liabilities                                                                                                                
Interest-bearing borrowings at fair value                             2 079 117     2 079 117           -              -   
Derivative liabilities                                                  291 171             -     291 171              -   
Other financial liabilities                                                   -             -           -              -   
                                                                      2 370 288     2 079 117     291 171              -   

Financial instruments and investment property fair value disclosures
                                                                                      Audited 31 August 2018                
Figures in R'000                                                     Fair value       Level 1     Level 2        Level 3   
Assets                                                                                                                     
Investment properties*                                               74 945 045             -           -     74 945 045   
Listed securities                                                     1 935 843     1 935 843           -              -   
Derivative assets                                                        40 795             -      40 795              -   
Loans receivable                                                              -             -           -              -   
Other financial assets                                                  218 890             -           -        218 890   
                                                                     77 140 573     1 935 843      40 795     75 163 935   
Liabilities                                                                                                                
Interest-bearing borrowings at fair value                             2 502 753     2 502 753           -              -   
Derivative liabilities                                                  921 539             -     921 539              -   
Other financial liabilities                                              51 287             -           -         51 287   
                                                                      3 475 579     2 502 753     921 539         51 287   

* Including properties under development and non-current assets (properties) held for sale.


LEVEL 3 RECONCILIATION                                                                         
                                                                                    Unaudited 28 February 2019                
                                                                                                Gain/(loss)                
                                                                Balance at                        in profit      Balance   
                                                                 beginning    Acquisitions/     or loss for       at end   
Figures in R'000                                                   of year      (disposals)      the period    of period   
Investment properties                                           68 469 851        2 178 851         437 432   71 086 134   
Properties under development                                     5 926 105        (982 332)       (415 300)    4 528 473   
Investment property held-for-sale                                  549 089        (116 478)          22 797      455 408   
Loans receivable                                                         -          164 372               -      164 372   
Other financial assets                                             218 890                -          99 954      318 844   
Other financial liabilities                                         51 287                -             143       51 430   
                                                                75 215 222        1 244 413         145 026   76 604 661   

                                                                                    Unaudited 28 February 2018                
                                                                                                Gain/(loss)                
                                                                Balance at                        in profit      Balance   
                                                                 beginning    Acquisitions/     or loss for       at end   
Figures in R'000                                                   of year      (disposals)      the period    of period   
Investment properties                                           59 243 224          976 121       1 239 003   61 458 348   
Properties under development                                     3 948 869          632 669       (129 329)    4 452 209   
Investment property held-for-sale                                2 403 756      (1 879 414)          72 668      597 010   
Other financial assets                                                   -          142 869        (11 810)      131 059   
Other financial liabilities                                              -                -               -            -   
                                                                65 595 849        (127 755)       1 170 532   66 638 626   

                                                                                        Audited 31 August 2018                
                                                                                                Gain/(loss)                
                                                                Balance at                     in profit or      Balance   
                                                                 beginning    Acquisitions/        loss for       at end   
Figures in R'000                                                   of year      (disposals)        the year      of year   
Investment properties                                           59 243 224        6 375 969       2 850 658   68 469 851   
Properties under development                                     3 948 869        2 009 233        (31 997)    5 926 105   
Investment property held-for-sale                                2 403 756      (2 124 317)         269 650      549 089   
Other financial assets                                                   -          143 973          74 917      218 890   
Other financial liabilities                                              -           23 826          27 461       51 287   
                                                                65 595 849        6 428 684       3 190 689   75 215 222   

The fair value gains and losses are included in the change in fair values line in profit or loss.


Financial instruments and investment property fair value disclosure

Details of valuation techniques
The valuation techniques used in measuring fair values at 29 February 2019 for financial instruments
and investment property measured at fair value in the statement of financial position, as well as the
significant unobservable inputs used is disclosed below. There have been no significant changes in
valuation techniques and inputs since 31 August 2018.

Financial instruments
LISTED SECURITIES
Closing market price on the relevant exchange.

INTEREST-BEARING BORROWINGS AT FAIR VALUE
The exchangeable bond's fair value is determined with reference to the quoted Bloomberg Valuation
Service (BVAL) price.

FOREIGN EXCHANGE OPTIONS
The fair value is determined using quoted forward exchange rates at the reporting date and present
value calculations based on high credit quality yield curves in the respective currencies.

INTEREST RATE SWAPS
The fair value is calculated as the present value of the estimated future cash flows. Estimates of
the future floating-rate cash flows are based on quoted swap rates, futures prices and interbank
borrowing rates. Estimated cash flows are discounted using a yield curve constructed from similar
sources, which reflects the relevant benchmark interbank rate used by market participants for this
purpose when pricing interest rate swaps. The fair value estimate is subject to a credit risk adjustment
that reflects the credit risk of the Group and of the counterparty. This is calculated based on credit
spreads derived from current credit default swap or bond prices.

CROSS-CURRENCY INTEREST RATE SWAPS
The fair value is calculated by discounting the future cash flows using the swap curve of the respective
currencies at the dates when the cash flows will take place.

LOANS RECEIVABLE
The fair value is calculated by discounting the future cash flows using a risk-adjusted discount rate.

UNLISTED SECURITIES
The adjusted net asset value method is used to determine the fair value, i.e. the fair value is measured
based on the fair value of the investee's assets and liabilities.

PROFIT PARTICIPATION LIABILITY
The adjusted net asset value method is used to determine the fair value of the liability, i.e. the fair value
is measured based on 5% of the underlying Chariot investment.

Investment property
The valuation policy adopted by management is to revalue investment property at each reporting date,
valued externally for both interim reporting and financial year-end reporting. The changes in fair value
from the previous reporting period are analysed by management. Current market-related assumptions
were applied to the risks in rental streams of properties. Discount rates in the respective sectors are
disclosed below. At the reporting date, the key assumptions used by the Group in determining fair value
were in the following ranges for the Group's portfolio of properties:

Unobservable inputs                                Unaudited                     Unaudited                   Audited   
(% unless otherwise stated)                 28 February 2019              28 February 2018            31 August 2018   
Expected market rental growth                    3.00 - 6.00                   4.00 - 6.00               3.00 - 6.00   
Expected expense growth                          6.50 - 8.00                   7.00 - 9.00               6.50 - 8.00   
Occupancy rate                                         94.47                         95.05                     95.68   
Vacancy periods                                0 - 12 months                 0 - 12 months             0 - 12 months   
Rent-free periods                               0 - 3 months                  0 - 3 months              0 - 6 months   
Office sector                                                                                                          
Discount rate                                  10.00 - 17.50                  9.98 - 18.00             10.00 - 17.00   
Exit capitalisation rate                        7.50 - 12.25                  7.50 - 13.00              7.50 - 13.25   
Bulk rate                           R2 000 - R4 725 p/m2   R      R1 750 - R5 400 p/m2   R      R2 000 - R4 725 p/m2   
Retail sector                                                                                                          
Discount rate                                  12.00 - 17.00                 11.04 - 18.00             11.75 - 17.00   
Exit capitalisation rate                        7.25 - 12.00                  7.00 - 12.00              7.25 - 12.00   
Bulk rate                             R330 - R4 000 p/m2   R          R1 200 - R3 000 p/m2        R330 - R4 000 p/m2   
Industrial sector                                                                                                      
Discount rate                                  13.00 - 15.50                 13.25 - 18.00             13.00 - 16.00   
Exit capitalisation rate                        8.00 - 12.00                  8.00 - 13.00              8.00 - 11.50   
Bulk rate                                  R60 - R1 900 p/m2            R643 - R2 500 p/m2         R60 - R1 900 p/m2   
Specialised sector                                                                                                     
Discount rate                                  14.00 - 14.50                 14.00 - 16.50             14.00 - 14.50   
Exit capitalisation rate                        9.50 - 10.50                  8.00 - 10.50              9.50 - 10.50   
International sector                                                                                                   
Core yield                                       6.25 - 7.50                           N/A               6.25 - 7.50   
Discount rate                                    6.25 - 7.50                           N/A               6.25 - 7.50   


Financial instruments and investment property fair value disclosures

Measurement of fair value
Valuation techniques
All external valuations were completed using the following methods of valuation:

Investment property - Discounted cash flow method
The valuation model generates a net present value (NPV) for each property by discounting forecasted
future cash flows and a residual value at the end of the cash flow projections period by the discount
rate of each property. The residual value is calculated by capitalising the net income forecasted for the
12-month period immediately following the final year of the cash flow at the exit capitalisation rate.
The discount rate applied by each valuator is determined by adding a growth rate per property, base
on forecasted market-related rental increases, to the determined capitalisation rate per property. The
discount rate is then tested for reasonableness by benchmarking the rate against recent comparable
sales and surveys prepared by MSCI/South African Property Owners Association (MSCI/SAPOA).
The capitalisation rate is dependent on a number of factors, such as location, the condition of the
improvements, current market conditions the lease covenants and the risk inherent in the property,
which is also tested for reasonableness by benchmarking against recent comparable sales and surveys
prepared by MSCI/SAPOA.

INVESTMENT PROPERTY - TOPSLICE METHOD
A certain selection of properties are valued using the topslice method, which is a combination of the
income capitalisation method and discounted cash flow method, adopted by CBRE sp.zo.o. - Poland.
This method is based on the premise that it is necessary to distinguish between market related rentals
which are sustainable in the long term and rentals that are above market related rates and which are
not sustainable in the long-term.

A sustainable value is calculated by firstly capitalising the core/market related income by the core
yield. Secondly, a topslice value is added by discounting the incremental income that is above market
back to the present day for the period of the lease at the topslice discount rate. The valuer assumes
that market rentals and outgoings remain constant during the lease period and, as a result, does not
incorporate a market growth component that is typically found in a discounted cash flow valuation.

PROPERTIES UNDER DEVELOPMENT - COMPARABLE SALES METHOD
Properties under development comprise of the cost of land and development, and are measured at fair
value. Fair value is based on the costs incurred up to the date of valuation. Undeveloped land is valued
in terms of the internationally accepted and preferred method of comparison. This involves the use of
recent comparable transactions as a basis for the valuation. Bulk rates are determined for the land
that has been zoned.

INTER-RELATIONSHIP BETWEEN KEY UNOBSERVABLE INPUTS AND FAIR VALUE MEASUREMENT

The estimated fair value would increase/(decrease) if:
  
-  Expected market rental growth was higher/(lower);
-  Expected expense growth was lower/(higher);
-  Vacant periods were shorter/(longer);
-  Occupancy rate was higher/(lower);
-  Rent-free periods were shorter/(longer);
-  Discount rate was lower/(higher);
-  Exit capitalisation rate was lower/(higher);
-  Capitalisation rate was lower/(higher);
-  Bulk rate was higher/(lower); or
-  Core yield was lower/(higher).


New standards and interpretations adopted

IFRS 9, Financial Instruments
CLASSIFICATION AND MEASUREMENT OF FINANCIAL ASSETS
IFRS 9 contains a new classification and measurement approach for financial assets that reflects the
business model in which assets and their cash flow characteristics are managed. IFRS 9 contains
three principal classification categories for financial assets - Amortised cost, Fair value through other
comprehensive income (FVOCI) and Fair value through profit or loss (FVPL).

With exception of certain vendor loans of the Group, the measurement categories of financial
instruments remained the same on the date of intitial application, 1 September 2018.

Vendor loans
The Group's business model is achieved by collecting the contractual cash flows.

Where the contractual cash flows of the Vendor loans consist solely of principal and interest, the Group
continued to classify and measure these loans at Amortised cost.

Where the contractual cash flows of the Vendor loans did not consist solely of principle and interest,
the Group reclassified and measured these Vendor loans to FVPL.

                                                              IAS 39                    IFRS 9             
                                                      31 August 2018              1 September 2018   
R'000                                                 Amortised cost      Amortised cost           FVPL   
Loans receivable                                           2 698 148           2 506 038        192 110   


IMPAIRMENT OF FINANCIAL ASSETS
IFRS 9 replaces the 'incurred loss' model in IAS 39 with a forward-looking 'expected credit loss' (ECL)
model. The new impairment model applies to financial assets measured at amortised cost or FVOCI.
Under IFRS 9, loss allowances will be measured on either of the following basis:

-   12-month ECLs: these are ECLs that result from possible default events within the 12 months after
    the reporting date; or
-   Lifetime ECLs: these are ECLs that result from all possible default events over the expected life of
    a financial instrument.

Lifetime ECL measurement applies if the credit risk of a financial asset at the reporting date has
increased significantly since initial recognition and 12-month ECL measurement applies if it has not.
An entity may determine that a financial asset's credit risk has not increased significantly if the asset
has low credit risk at the reporting date. However, lifetime ECL measurement always applies for trade
receivables and contract assets without a significant financing component.

From 1 September 2018 the Group has the following types of financial assets that are subject to
IFRS 9's new expected credit loss model:

-   loans receivable carried at amortised costs;
-   trade receivable; and
-   cash and cash equivalents.

The Group assesses on a forward-looking basis the expected credit losses associated with its loans
receivable carried at amortised cost. The Group uses three main parameters to measure ECL on loans
receivable carried at amortised cost. These are the probability of default (PD), loss given default (LGD)
and exposure at default (EAD).

For trade receivables, the Group applies the IFRS 9 simplified impairment provision matrix based on
historical credit loss experiences to estimate lifetime ELC for all trade receivables.

ECLs are calculated by applying a loss ratio to the aged balance of the trade receivables at each
reporting date. The loss ratio is calculated according to the ageing of credit by applying historic/proxy
write-offs to the payment profile of the credit population. The historic loss ratio is then adjusted for
forward looking information to determine the ECL for the portfolio of trade receivables at the reporting
period to the extent that there is a strong correlation between the forward looking information and the
ECL.

While loan receivables at amortised costs, trade receivables and cash and cash equivalents are subject
to the impairment requirements of IFRS 9, the impact of IFRS 9 expected credit losses compared to the
loss allowance recognised based on IAS 39 was not material and did not lead to an adjustment of the
accumulated profit as at 1 September 2018.

REFINANCING OF FINANCIAL LIABILITIES
There was no impact from the adoption of IFRS 9 on the financial liabilities of the Group.

IFRS 15, Revenue from Contracts with Customers
IFRS 15 is effective for annual periods beginning on or after 1 January 2018, replacing the existing
revenue standards and the related interpretations. The standard sets out the requirements for
recognising revenue that applies to all contracts with customers, except for contracts that are within
the scope of the standards on leases, insurance contracts or financial instruments.

The Group adopted IFRS 15 on 1 September 2018 and, as permitted by IFRS 15, did not restate its
comparative financial results. The standard does not apply to revenue associated with leases and
financial instruments, and therefore does not impact the majority of the Group's revenue.

Revenue from lease components includes rent. Revenue recognition remains consistent with the
accounting policies outlined in the most recent audited annual consolidated financial statements.

Revenue related to the services component of the Group's leases are accounted for in accordance
with IFRS 15. These services consist primarily of operating costs recoveries for which the revenue is
recognized over time, typically as the costs are incurred, which is when the services are provided. This
IFRS 15 treatment is the same as that applied previously under IAS 18.

The adoption of IFRS 15 did not have an impact on the timing of recognition or measurement of revenue
and was limited to additional disclosure on the disaggregation of the Group's various revenue streams.

                                                                           Unaudited           Unaudited   
R'000                                                                  February 2019       February 2018   
Gross rental income (IAS 17)                                               3 247 752           3 083 621   
Operating costs recoveries (IFRS 15)                                         895 846             771 848   
Contractual rental income                                                  4 143 598           3 855 469   


Redefine Properties Limited

Executive directors:
AJ Konig (Chief executive officer)
LC Kok (Financial director)
M Wainer (Executive director)

Non-executive directors:
SM Pityana (Chairman)*
ASP Dambuza*
B Mathews (Lead Independent and Deputy Chairperson)*
HK Mehta
LJ Sennelo*
M Barkhuysen*
NB Langa-Royds*
* Independent

Registered office:
Rosebank Towers, Office Level 5, 19 Biermann Avenue, Rosebank 2196
(PO Box 1731, Parklands 2121)

Transfer secretaries:
Computershare Investor Services Proprietary Limited

Sponsor:
Java Capital

Company secretary:
B Baker

Independent auditors:
PricewaterhouseCoopers Inc.

www.redefine.co.za



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