Andrew König
Redefine
CEO
Leon Kok
Chief Operating Officer
Ntobeko Nyawo
Chief Financial Officer
Reflecting on the past five years, CEO Andrew König described the period as “a game of snakes and ladders,” marked by successive global shocks—from the COVID-19 pandemic and energy crises to geopolitical conflicts, interest rate hikes, and trade tensions. These disruptions have heightened uncertainty, undermined capital market stability, and unsettled the business confidence upon which property cycles rely.
Despite this, Redefine’s South African business continues to grow stronger. König emphasised the company’s ability to reshape itself to capitalise on emerging opportunities and thrive amid complexity. “Our half-year results reflect measurable improvement, an opportunity-led strategy, and a well-capitalised balance sheet that positions us to weather volatility and drive long-term value creation,” he said.
Strong financial and operational performance
Redefine’s group-wide net operating profit margin rose to 76.9%, up from 76.5% in the comparable period, with South Africa’s margin reaching a robust 79.1%. This improvement is driven by higher occupancy levels and disciplined cost control throughout the portfolio.
The company’s loan-to-value (LTV) ratio improved to 41.2%, moving closer to the targeted 38-41% range. This improvement was supported by ongoing simplification of joint ventures, particularly in Poland, and also reflects prudent debt management in the South African business. Redefine’s liquidity position strengthened to R6 billion, up from R4.8 billion as of 31 August 2024, providing ample reserves to cover debt maturities through to 2026—a critical buffer as global trade-related tariff wars and economic uncertainty persist.
Chief Financial Officer Ntobeko Nyawo highlighted that Redefine successfully refinanced the majority of its R3.5 billion in maturing debt in FY2025, with only R500 million remaining. The group’s proactive approach to debt management, which includes the successful issuance of R2.1 billion in bonds during the period, reflects the strength of its funding relationships. Moody’s reaffirmed Redefine’s Ba2 rating with a stable outlook, supporting continued access to debt capital markets.
Sectoral performance: Industrial and retail outperform, office under pressure
Chief Operating Officer Leon Kok noted that Redefine’s operational performance is anchored in efficiency, asset quality, and tenant retention. In South Africa, overall portfolio occupancy improved to 94.7%, with the industrial sector achieving standout results—only 1.1% vacancy, lease renewal reversions of 4.6%, and high tenant retention, all driven by active asset management and the defensive nature of industrial assets.
The retail sector also demonstrated a positive turnaround, recording the first positive lease renewal reversion in over three years at 0.4%. This signals improving tenant sentiment and the strength of Redefine’s dominant, well-located shopping centres. The retail portfolio’s rent-to-turnover ratio stands at a healthy 7.4%, indicating sustainable rental levels and tenant profitability.
By contrast, the office portfolio continues to face challenges due to national oversupply and constrained rental growth. Renewal reversions remain under pressure, but certain nodes—such as Rosebank and parts of the Western Cape—are experiencing strong demand for premium-grade (P-grade) space. Kok stressed that economic growth, political stability, and clearer interest rate direction would be crucial to unlocking broader rental growth in the office market.
Sustainability: Accelerating renewable energy initiatives
Redefine has made significant progress in its renewable energy initiatives. “We increased our installed solar PV capacity by 20% during the period to 52 MWp, and we’re targeting a further 25% increase—around 13.3 MW—over the next 6 to 12 months,” said Kok. This will bring total installed capacity to over 64 MWp, in line with Redefine’s commitment to reducing reliance on the national grid and promoting long-term sustainability. These investments not only support environmental goals but also help alleviate rising utility costs and supply disruptions.
Strategic focus: Disciplined growth and portfolio optimisation
Redefine reaffirms its guidance for distributable income per share of 50-53 cents for the period and expects to maintain a dividend payout ratio within the 80-90% range. The company’s strategic focus remains firmly on disciplined capital allocation, simplification of joint ventures, organic growth, and operational efficiency.
Recent transactions, including the increase of ownership in Pan Africa Mall from 51% to 68% and the completion of its second expansion phase, demonstrate Redefine’s commitment to optimising its asset base. “We are not chasing expansion for its own sake,” König concluded. “Our goal is to enhance the quality and performance of our current portfolio, maintain liquidity, and continue creating long-term value for our stakeholders.”
Outlook: Well-positioned for future upside
Looking ahead, Redefine remains focused on harnessing technology to drive operational efficiency and value creation. While the macroeconomic outlook is uncertain, the company’s strong balance sheet, defensive asset mix, and proactive management position it well to capitalise on future opportunities as market conditions stabilise.
Redefine’s Polish platform delivers resilience and growth amid market complexity
Redefine Properties’ Polish operations, anchored by its EPP retail platform and expanding logistics and self-storage ventures, have emerged as a pillar of stability and growth for the group, even as global uncertainty and regional volatility persist. The company’s results for the six months ended February 2025 highlight the quality, resilience, and future upside of its Polish assets, which continue to outperform in a competitive European market.
EPP retail: Near-full occupancy and healthy fundamentals
Redefine’s EPP (European Property Partners) core retail platform in Poland achieved an outstanding occupancy rate of 99.2% during the reporting period, demonstrating the lasting appeal of its dominant shopping centres and the robustness of its tenant relationships. This near-full occupancy serves as a crucial differentiator, particularly as the European retail landscape continues to evolve post-pandemic.
According to the results presentation, EPP’s rental reversions remained positive at 3.4%, and tenant retention was a robust 97.6%. The rent-to-sales ratio stood at a healthy 9.1%, indicating that tenants can comfortably meet their rental obligations while maintaining profitability. EPP’s net operating profit margin was 77.2%, closely tracking the group average and underscoring the efficiency of its operations.
While foot traffic was slightly down year-on-year, management attributed this to increased competition from retail parks rather than a fundamental shift in consumer behaviour. Importantly, tenant sales remained stable, and e-commerce penetration in Poland has plateaued at around 10%, suggesting that physical retail remains the primary channel for most consumers. “We are seeing that e-commerce is not a major threat at these penetration levels,” the management team noted during the webinar, “and our centres continue to attract both shoppers and tenants.”
Tenant mix and consumer trends
EPP’s tenant mix reflects the evolving needs of Polish consumers. Value fashion and discount retailers are gaining share as shoppers become more price-conscious amid inflationary pressures. The most resilient categories include services, entertainment, and food & beverage, which are less susceptible to online substitution and benefit from the experiential appeal of physical retail.
Management emphasised that EPP’s leasing strategy focuses on maintaining a strong mix of national and international brands while also supporting local entrepreneurs. This strategy has enabled EPP to sustain high occupancy and drive positive rental reversions, even as some categories—such as electronics—experience margin pressure.
Logistics and self-storage: Expanding platforms
Beyond retail, Redefine’s Polish logistics platform, ELI (European Logistics Investment), co-owned with Madison, is making strategic progress. The group is finalising a planned portfolio division and revised shareholders’ agreement, expected by June 2025. Recent leasing activity is set to reduce vacancy in the logistics portfolio from 6.6% to 3.5% by mid-year, demonstrating strong demand for modern, well-located warehouse space.
In addition, Redefine is advancing its self-storage platform in Poland, with 10,000 sqm of net lettable area under development and an additional 38,000 sqm under consideration. The initial €50 million (approximately R1 billion) equity commitment is being deployed, and the company is actively seeking a co-investment partner to match this with another €50 million (R1 billion) in capital. This expansion taps into the growing demand for flexible storage solutions in urban centres and represents a new avenue for diversified growth.
Energy and sustainability: Flexible, green solutions
EPP’s energy strategy exemplifies innovation and resilience. The company has secured power purchase agreements enabling flexible, renewable energy sourcing, which helps mitigate the impact of rising utility costs and regulatory uncertainty. These initiatives align with Redefine’s broader ESG commitments and bolster the long-term competitiveness of its Polish assets.
Capital management and joint venture simplification
A key strategic focus for Redefine is the ongoing simplification of its Polish joint ventures—a move aimed at lowering the group’s loan-to-value (LTV), reducing equity risk, and alleviating high finance costs. Disposing of select joint venture interests would free up capital to reduce debt or reinvest in core assets, thereby supporting both earnings and risk management. “This is a strategic priority that will enhance the group’s flexibility and future growth prospects,” CEO Andrew König emphasised in the press release.
Market outlook: Opportunity amid uncertainty
Despite macroeconomic headwinds—including the lingering effects of the Ukraine conflict, energy market volatility, and shifting consumer sentiment—Redefine’s Polish platform is well-positioned for continued growth. The institutional investment market shows signs of improvement, and the introduction of REIT legislation in Poland could further enhance market liquidity and investor interest.
Management remains confident in the long-term fundamentals of Polish retail and logistics. “Our focus is on disciplined capital allocation, operational efficiency, and driving organic growth,” König said. “We are not chasing expansion for its own sake. Our goal is to enhance the quality and performance of our current portfolio, maintain liquidity, and continue creating long-term value for our stakeholders.”