| Wed 14 Feb 2001, 0:00 | | Pls Redefine Income Fund Lifts Nav By 42 Cents One |
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REDEFINE INCOME FUND LIMITED
NEWS RELEASE
WEDNESDAY, FEBRUARY 14, 2001
PROPERTY LOAN STOCK COUNTER REDEFINE INCOME FUND LIMITED LIFTS NAV BY 42 CENTS
ONE YEAR AFTER LISTING
AN increase of 42 cents in net asset value is a welcome anniversary benefit for
investors in the R1,3-billion Redefine Income Fund exactly one year down the
road from listing on the Johannesburg Securities Exchange on February 23, 2000.
Redefine is the only hybrid listed property loan stock (PLS) company, with a
portfolio now comprising R609-million in 59 directly-owned properties and
R704-million in 12 listed PLS and property unit trusts (PUTS).
Redefine chief executive Peter Penhall said the increase in NAV has come mainly
through the exceptional performance and re-rating by the investment market of
the core PLS and PUT counters in which Redefine has a substantial stake, which
boosted Redefine's investment base from an original R604-million to
R704-million.
These are PLS Hyprop (up from a standing cost of R124-million to R161-million);
PUT Grayprop (R79-million to R102-million); and PUT Sycom (R56-million to
R76-million), with all but one of the listed counters returning positive growth
Penhall said: "What we have seen is capital appreciation of 60 percent in our
'paper' investment and an increase in net asset value of 42 cents per linked
unit. This translates into NAV of R2,42 per linked unit.
"We have also seen an increase in the value of our of directly-owned property
portfolio, although this has not been taken into account in the current NAV
assessment."
Redefine is due to publish its interim results in March and the counter remains
on track in delivering a 17 percent investment return on the listing price of
R2,00, paid quarterly, a feature which, together with the A+ Fitch investment
rating, separates Redefine from the other PLS and PUT counters in the Real
Estate sector.
The interim accounts will reflect conversion of a percentage of deferred debt
from interest free to interest bearing status.
Penhall said: "About half of the deferred payments will be comfortably brought
to account and we are confident that growth in earnings during the next 12
months will absorb the cost and maintain projected growth."
He said: "Performance in our first year of operation fully vindicates the
hybrid concept of investment in roughly equal proportion: directly in bricks
and mortar and indirectly through equity.
"Historically, contributions to revenue have been on a 50-50 basis between
direct and listed property investments."
"At listing, we pioneered a totally different investment concept for real
estate investment which has helped deliver perceptions that property is
becoming an exciting investment medium again."
"Nevertheless, it is easy to understand that the market has bided its time in
rating Redefine until there was a track record against which it can be judged."
"On the basis of our first year, we can say that the hybrid concept really does
work. We fully expect to see a re-rating of Redefine once constant performance
has been demonstrated through the publication of its annual results.
"Also, in terms of our pre-listing objective of making Redefine one of the most
liquid of property investments, we have been encouraged by the trading volumes
in Redefine linked units, which has averaged R7-million- R8-million a month in
the last three-four months. There has also been a noticeable pick-up in
investment by private investors."
He pointed out that there were questions regarding the real estate sector's
excessive exposure to the retail industry and an over-supply of office
accommodation in key business nodes.
"It should be borne in mind that our geographic spread of properties covers 715
properties and more than 13 000 tenants, so we are better able to absorb the
knocks that may arise from changes in the economy," Penhall said.
Refer to www.redefine.co.za for fuller information.
End
Note: At August 31, 2000, year-end net asset value was 198.86 cents per linked
unit.
Enquiries: Peter Penhall: (011) 283-0110
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