Redefine International PLC, which is listed on the London Stock Exchange and plans an inward listing on the Johannesburg Stock Exchange later this month, has secured a significant transaction with Aviva Commercial Finance Limited.
Redefine International today announced it has agreed revised arrangements with Aviva with respect to the Company’s UK shopping centre portfolio. The transaction will substantially reduce Redefine International’s see through loan-to-value ratio, from circa 64% to circa 57%, and see it acquire the 307,763sqft two-storey Weston Favell Shopping Centre in Northampton, England.
Michael Watters, CEO of the Redefine International Group, says: “This transaction not only produces a significant reduction in Redefine International’s leverage ratio, but is expected to be earnings accretive from day one. The shopping centre is dominant in its local area and will benefit from our long term focus on delivering income through focussed asset management activity.”
The transaction is subject to certain conditions, including JSE listing requirements. Once complete, it will result in a restructuring of the Aviva debt secured against Grand Arcade Shopping Centre in Wigan and West Orchards Shopping Centre in Coventry.
Weston Favell is an enclosed shopping centre situated on the edge of Northampton, anchored by one of the largest Tesco Extra supermarkets in the UK at 156,987sqft, with a 14.3 years unexpired lease term. The centre has a total of 56 retail units and seven kiosks let to a variety of national and local retailers.
“The centre, which produces a net rental income of £6.4 million a year, was acquired on a net initial yield, after acquisition costs, of 7.2%,” says Watters. “The key investment attractions include the centre’s dominance in the wider catchment, the lack of supermarket competition in the north east of Northampton and the strength of the Tesco covenant which accounts for 53% of the net passing rent.”
Shareholders of Redefine Properties International (RIN), which is listed on the JSE and the major shareholder in Redefine International PLC, will vote on the proposed inward listing of the PLC on the JSE and the consequent dissolving of RIN on Friday this week.