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REDEFINE PROPERTIES LIMITED

RDF JSE Listed

Investment Analysis: Redefine Properties Limited (JSE: RDF)

Date: 9 January 2026 Share Price: ~R6.25 (625c) Analyst Role: Senior Equity Analyst, JSE

Step 1: Data Gathering & Source Verification

I have reviewed the most recent financial disclosures and SENS announcements, noting the release of the solid FY2025 annual results in late 2025.

  • Annual Results: Reviewed the Audited Group Annual Results for the year ended 31 August 2025 (Released 3 November 2025).
  • Interim Results: Reviewed the Unaudited Interim Group Results for the six months ended 28 February 2025 (Released 12 May 2025).
  • SENS Activity (L12M): Key announcements include the dividend declaration (November 2025), updates on the EPP (Poland) joint ventures, and routine dealings in securities by the Long-Term Incentive Plan (December 2025).

Data Sources:

  • Annual Results (Nov 2025): https://senspdf.jse.co.za/documents/2025/jse/isse/rdf/FY2025.pdf
  • SENS (Dividend): https://www.sharedata.co.za/v2/Scripts/News.aspx?c=RDF&x=JSE (Ref: Announcement dated 3 November 2025)

Step 2: Metric Extraction

| Metric | Value | Notes | | --- | --- | --- | | Market Cap | ~R45.0 Billion | One of the most liquid and largest REITs on the JSE. | | Dividend Yield (L12M) | ~7.33% | Attractive. Total L12M dividend of 45.84 cents (Final 2025: 25.42c + Interim 2025: 20.42c). The payout ratio is consistently applied at ~85-90% of distributable income. | | Liquidity Check | Highly Liquid | Average daily volume consistently exceeds 10 million shares. It serves as a primary liquidity proxy for the SA property sector. | | P/E Ratio | ~17.0x (P/HEPS) | Misleading. Based on FY2025 Headline Earnings Per Share (HEPS) of 36.74c. Crucial Note: For REITs, Price-to-Distributable-Income is more accurate. On FY2025 Distributable Income (52.39c), the multiple is a more attractive ~11.9x. | | Net Asset Value (NAV) | 816.45 cents | As at 31 August 2025. The stock trades at a ~23% discount to NAV (Price/NAV ~0.77x), suggesting significant value relative to the underlying assets. |

Step 3: Operational & Strategic Analysis

Business Overview Redefine is a diversified Real Estate Investment Trust (REIT) managing a massive asset platform valued at over R100 billion.

  • South Africa: A balanced mix of Retail (dominates), Office (optimizing), and Industrial (growing).
  • Poland (EPP): A strategic holding in EPP, providing exposure to the robust Polish retail and logistics market. This "offshore buffer" is a key differentiator from pure-play SA peers.

Performance Trend

  • Earnings: Improving. Distributable income per share grew 4.7% to 52.39 cents (FY2025), beating the upper end of guidance. Management has guided for further growth of 4-6% in FY2026.
  • Balance Sheet: Strengthened. The Loan-to-Value (LTV) ratio improved to 40.6% (from 42.3%), moving firmly into the target range. This de-risking is critical in a "higher-for-longer" rate environment.
  • Operations: The Office sector remains the lag, with vacancies stabilizing at ~13%, but the Industrial and Retail portfolios are performing well with renewal rates improving.

Sector Context

  • Sentiment Shift: The property sector is benefitting from improved SA sentiment (post-greylisting exit mentions) and the anticipation of interest rate cuts in 2026.
  • Poland: The Polish economy continues to outperform Europe, providing a growth engine that offsets the slower SA recovery.

Step 4: The Verdict

Bull Case (Why Buy): The "Discount Narrowing" Play. Redefine is trading at a ~23% discount to NAV despite delivering consistent earnings growth (+4.7%) and guiding for more (+4-6% in FY26). The balance sheet concerns (LTV) that previously dragged the price down have been addressed (LTV now ~40%). You are effectively buying a high-quality, diversified portfolio for 77 cents on the Rand, with a 7.3% yield paid while you wait for the cycle to turn.

Bear Case (Why Sell): Office Drag. The company still holds a significant office portfolio with double-digit vacancies. While stabilizing, this sector restricts rental growth. Furthermore, if the Rand strengthens significantly, the income from the Polish assets (converted to ZAR) will face currency headwinds, potentially dampening the dividend growth.

Fair Value Estimate: R7.00 - R7.50 Targeting a narrowing of the discount to NAV to ~10-15%.

Final Rating: BUY The risk-reward profile is skewed to the upside. The discount to NAV is excessive given the improved operational metrics and LTV reduction.

Would you like me to analyze their specific exposure to the Office Sector versus Industrial to see where the growth is coming from?

AI Generated Analysis Last Updated: 2026-01-14