News

Redefine announces sale of Australian non-core assets for A$459m

Andrew Konig, CEO of Redefine Properties.
Andrew Konig, CEO of Redefine Properties.

Redefine Properties has announced that its competitive bidding process to sell its interest in Journal’s two student properties in Australia as been concluded at A$459 million.

The disposal of the Company’s interests comprises of 1 391 beds is part of Redefine’s portfolio refinement and loan-to-value improvement strategy.

During 2017, Redefine acquired a 90% beneficial interest in Journal Student Accommodation Fund and during 2018, Journal Swanston Sub Trust to develop the properties in Melbourne as purpose-built student accommodation and associated retail. The development of Leicester Street, an 804-bed facility, was completed in 2018 whilst the development of 587 Swanston Street was completed in May 2020.

Redefine’s financial director Leon Kok says that a portion of the proceeds from the disposal will be used to settle the Australian loan facilities on the properties amounting to around A$132 million with the remaining proceeds being utilised to reduce the Company’s other interest bearing borrowings and to enhance its liquidity.

This transaction forms an integral part of Redefine’s loan-to-value improvement plan which includes the disposal of approximately R8 billion of non-core assets across the Company’s asset platform. The transaction will also secure the release of 60 million Cromwell Property Group shares from an encumbrance with Redefine’s intention that such Cromwell shares be sold on the open market to further advance Redefine’s stated intention to strengthen its balance sheet and to bolster liquidity.

Chief Executive Officer Andrew Konig says the transformation of the property asset platform is necessary to withstand the impact of the pandemic whose trajectory is still evolving.

“Recycling out of non-core assets at the top end of their capital value will enable us to strengthen our balance sheet and crystallize the benefits of net proceeds.”

We have consistently said our plan is to recycle capital into core markets where there is scope for scale, by disposing assets that no longer fit our long-term value creation strategy”.