Redefine Properties, SA’s second largest property fund now listed on the JSE increased its stake ownership in Fountainhead Property Trust from 49.6% to 61.9% in return of Hyprop units - as declared by the company on Monday.
Moving back in October, Redefine had stated its proposed suggestion of gaining upto an additional 250 million Fountainhead units in return for 110 Hyprop units for every 1,000 Fountainhead units acquired by Redefine.
On this Stake hike Mr. Marc Wainer, the CEO of Redefine Properties said that it has covered the way of achieving their goal of a complete takeover of Fountainhead’s R11 billion property portfolio.
This attempt to takeover Fountainhead by Redefine was already deflected by sector’s rival Growthpoint Properties who entered a competing bid for Fountainhead assets, in October last year.
This clash continued for six months. At last both the offers were detached but at that time Redefine already was owing Fountainhead’s management company, acquired 49.6% of Fountainhead’s units.
According to the results declared by the company yesterday for the year ended 31 August 2013, with distribution of 68.7 cents/linked units, up 7.3% compared to that in 2012.
Redefine stated that it was ahead of the market and is growing year on year.
Weakened Rand also raised the returns from the company’s offshore interests through its 32.3% stake in Redefine International which is listed on both, the JSE and London Stock Exchange and also 12.4% holding in Cromwell Property Group, Australia.
The reorganisation of the core portfolio has been achieved though there is R366m of dispositions - Mr. Wainer said on Thursday. The raising stake in the Fountainhead Property Trust and various other acquisitions were worth R1,3bn and the most important is 50% stake in the East Rand Mall for R1.12bn. The total assets under the management worth R41bn.
Following the Redefine’s acquisition of a controlling interest, they also reflected the combination of Fountainhead from March 27, 2013.
The legal rental income for 2013 is 89% compared to 81% in 2012, of the total revenue. Also the income from the listed securities was noted 9% from 17% in the previous year. And at last the trading and the fee income remained unchanged at 2%.
Operating costs were around 20% of the total revenue due to the careful watch on the costs and the incorporated electricity recoveries.
To distribute the income the local operations contributed 89%.
According to the group, the repeating facts for the coming financial year can include a controlled trading environment‚ disproportionate increases in rates and taxes‚ and continued financial market volatility.
Further it added that it is carefully focused on controlling and managing the variables within its control and the reorganised property asset base was also strongly stated to take in the improvements in the portfolio and that also without decreasing the income.
It is a true fact that for the first time the market is to see the benefits of the newly designed Redefine - said by Coronation Fund Managers property analyst Anton de Goede
Since the past two months the shares of Redefine are up over 15% which clearly states that the uncertainty due to the fight with Growthpoint for the Fountainhead has finally came to an end.
Redefine expects the same growth rate in the distributed income per linked unit for 2014, similar to the one achieved in 2013.
