Redefine International today converted to UK Real Estate Investment Trust (“REIT”) status and has therefore become the UK’s newest REIT.
Based on the Company’s closing share price on 3 December 2013 and including 98,090,863 new ordinary shares to be issued on Friday 6 December 2013, Redefine International’s expected market capitalisation of circa £580 million will make it the UK’s 13th largest REIT by size. As at 31 August 2013, and as reported in its full year results on 29 October 2013, the Company’s total assets were £1.06 billion.
In its previous structure as an externally managed listed company, Redefine International had already delivered a strong track record of providing investors with access to long-term, sustainable and predictable income backed by its investment in a real estate portfolio which is well diversified both geographically and by sector. As a newly created UK-REIT, which is internally managed, Redefine International therefore expects to:
- benefit shareholders’ potential returns, as UK-REIT qualifying assets will be largely exempt from corporation tax in the UK on both rental profits and chargeable gains;
- be available to a broader investor base than was previously possible, as some investors were unable to invest because of the previous structure; and
- receive annual cost savings from no longer having to pay an external manager.
The Company’s highly income-generative portfolio is focused on five key sectors:
- Stable income – predominantly comprising offices, many of which are let to UK Government tenants;
- UK retail – regionally dominant shopping centres and convenience retail parks;
- Hotels – branded limited service hotels located in London;
- Europe – office and retail assets, predominantly situated in Germany; and
- A 13.7% shareholding in Cromwell, one of Australia’s leading REITs.
The Company also looks at selective redevelopment and active asset management initiatives where there are opportunities to support income and, ultimately, capital growth.
As a newly established UK-REIT, Redefine International will bring its highly income-focused opportunity to the international investment community which is seeking yield in this low growth, low inflation environment. Furthermore, with a dual listing on the Johannesburg Stock Exchange, the Company will provide South African investors with access to the solid and economically secure first world property markets of the UK, Northern and Western Europe, including Germany and Switzerland, as well as Australia.
Greg Clarke, Chairman of Redefine International, added:
“This is an exciting time for Redefine International. Becoming the UK’s newest REIT, with a simplified structure, should enhance both the liquidity of our shares and the Company’s ability to distribute optimal returns for shareholders. Against an improving outlook for real estate across our key markets and with a solid and diversified portfolio which already offers considerable opportunity to add value, we look to the future with confidence and enthusiasm.”
Commenting, Mike Watters, Chief Executive of Redefine International, said:
“We are very pleased to have concluded the structural elements of becoming a REIT and look forward with enthusiasm to using our property skills and insight to deliver superior income returns for our shareholders.”