TIDMRDI
RNS Number : 8547D
Redefine International PLC
12 July 2016
REDEFINE INTERNATIONAL P.L.C.
("Redefine International" or the "Company")
(Registered number 010534V)
LSE share code: RDI
JSE share code: RPL
ISIN: IM00B8BV8G91
REDEFINE INTERNATIONAL UPDATE ON AUK PROGRESS
Redefine International, the opportunistic income focused FTSE
250 UK-REIT, is pleased to announce good progress ahead of initial
expectations on asset management initiatives on its recently
acquired Aegon UK ("AUK") portfolio.
Following the EU referendum result, the Company has completed
two encouraging leases totalling GBP0.6 million which represents a
10% increase on ERV. Since exchanging contracts on the AUK
portfolio in September 2015, the Company has increased the AUK
portfolio's WAULT from 7.5 years to 8.0 years, saved GBP0.3 million
in vacancy costs and achieved an additional uplift of GBP0.6
million to annualised rental income, representing a 5% increase on
ERV.
Mike Watters, CEO of Redefine International commented:
"We firmly believe the diversified nature of the Redefine
International portfolio, with 21% of market values located in
Germany, together with our income focus and long average lease
length will prove to be defensive in light of the uncertainty
following the UK's vote to exit from the EU. We remain comfortable
with our debt profile with an average debt maturity of 7.4 years
and no significant debt maturing until 2020. Completed refinancing
activities post our half year results have reduced the cost of debt
to 3.4% from 3.6%.
"We are pleased with the level of income enhancing activity
achieved on the AUK portfolio to date with this early success
improving the quality of our portfolio and our ability to deliver
our income focused total return strategy going forward."
AUK London offices:
-- At 127-133 Charing Cross Road, adjacent to the new Crossrail
development and Tottenham Court Road Elizabeth Line Station, the
Company has completed two rent reviews to Three Monkeys and
Superdrug on 12,524 sqft totalling GBP0.8 million representing a
29% increase on passing rent
The Company sees significant reversionary potential for the
asset based on recent letting activity in the immediate area. In
the longer term the property presents a development opportunity
with nearby properties securing planning permission for schemes
totalling as much as 12 floors.
AUK Regional offices:
-- At Lochside, Edinburgh, Origa has taken 11,202 sqft of vacant
space on a 15 year lease, with a 10 year break, for GBP0.2 million,
which is 2.1% ahead of ERV and means the property is now fully let
saving an additional GBP0.1 million in void costs
-- At the Omnibus building in Reigate, Deutsche Leasing has
signed a 15 year lease, with a 7.5 year break, on 11,015 sqft of
vacant space at an annualised rent of GBP0.3 million, 10.1% ahead
of ERV. 40% of the vacant space on acquisition has now been filled,
saving GBP0.1 million in void costs
The portfolio presents an immediate income opportunity through
removing the residual vacancies in the Manchester, Leeds and
Reigate offices totalling 47,614 sqft. Across the remainder of the
portfolio the Company has identified a number of opportunities to
regear leases increasing both the lease term and rental income.
AUK Retail Parks:
National retail park vacancies are at a 14 year low, which is
evident across all our retail parks with demand exceeding available
space.
-- At Banbury Cross Retail Park the property is now 98% let
following a successful reconfiguration of the Harveys unit to free
up available space:
- Tapi has agreed a 10 year lease on a vacant 4,998 sqft unit
for GBP0.1 million, which is 2.3% above ERV
- Poundstretcher has agreed a 10 year lease on 10,056 sqft for
GBP0.2 million which is 2.2% ahead of ERV
- Since the EU referendum result, DFS has signed a 10 year
renewal on 20,056 sqft of space at GBP0.3 million which is 4.9%
above ERV
The latter two leasing transactions, despite agreed at rents
below passing, are both above ERV and ahead of business plans made
on acquisition which will support valuations.
-- At Queens Drive, Kilmarnock, the Company has achieved full
occupation following a 10 year GBP0.2 million lease agreement with
Smyths Toys in line with ERV on a vacant 15,000 sqft unit
The Company is assessing a number of opportunities across the
portfolio's retail assets to add additional space and enhance the
tenant mix to drive footfall, including the creation of food and
beverage pods together with a range of commercialisation
initiatives which have not previously been applied to the parks, to
generate additional income.
AUK Logistics:
The Company has agreed four lettings which have increased the
logistics portfolio WAULT by 36% to 7.0 years.
-- At Camino Park, Crawley:
- Royal Mail has agreed a 10 year reversionary lease on 221,037
sqft with a break option in five years
- After the EU referendum result, DFS has signed a 10 year lease
on 27,306 sqft at GBP10.25 per sqft, a 15.5% uplift to passing rent
and 14.6% above ERV
-- At Express Park, Bridgwater, Exel has agreed a lease
extension until 2019 on 133,550 sqft at GBP5.7 per sqft which is
8.6% higher than ERV
-- At Kingsthorne Industrial Park, Kettering, Rexson Systems has
agreed a new 10 year lease at renewal on 12,737 sqft at GBP0.1
million, which is 17.9% ahead of passing rent and in line with
ERV
This reversionary portfolio is continuing to benefit from strong
tenant enquiries which are expected to drive future rental growth
in the short to medium term.
For further information:
Redefine International P.L.C.
Michael Watters, Stephen Oakenfull, Janine Ackermann Tel: +44 (0) 20 7811 0100
FTI Consulting - UK Public Relations Adviser
Dido Laurimore, Claire Turvey, Ellie Sweeney Tel: +44 (0) 20 3727 1000
FTI Consulting - SA Public Relations Adviser
Max Gebhardt Tel: +27 (0) 11 214 2402
JSE Sponsor
Java Capital Tel: +27 (0) 11 722 3050
Note to editors:
About Redefine International
Redefine International is an opportunistic, income focused FTSE
250 UK Real Estate Investment Trust (UK-REIT) committed to
delivering superior distributions to its shareholders throughout
the property cycle. Our income driven total returns are underpinned
by a diversified portfolio, together with an efficient capital
structure.
The continued transformation of both our corporate structure and
asset base offer a solid foundation to drive further value. Our
opportunistic investment philosophy is to effectively allocate
recycled capital from mature assets into sectors and locations with
strong occupier fundamentals and individual assets with realisable
upside.
Our diversified portfolio, independently valued at GBP1.5
billion, is focused in Europe's two strongest economies, being the
United Kingdom and Germany. The portfolio is weighted towards well
located properties across a range of sectors, including retail,
offices, distribution and hotels, which benefit from strong demand
and from which we believe we can capture income and value growth by
attracting high calibre occupiers on long leases.
Currently our secure income stream is supported by a diversified
portfolio and tenant base, with a WAULT of 8.1 years complemented
by an average debt maturity of 7.4 years of which over 90% of
interest costs are either fixed or capped.
We hold a primary listing on the London Stock Exchange and a
secondary listing on the Johannesburg Stock Exchange and are
included within the FTSE 250 and EPRA indices.
For more information on Redefine International, please refer to
the Company's website www.redefineinternational.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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