Key Principles of the Investment Policy
Redefine International’s investment policy is to provide investors with strong investment returns and a balanced exposure to lower risk income generating assets and opportunities that will provide a higher capital return.
In implementing its investment policy, Redefine International will contemplate available opportunities and future undertakings that will yield satisfactory returns at acceptable risk levels. In making investments Redefine International will seek to achieve a reasonable level of diversification across a spread of assets and geographies. The Group currently has investments in the United Kingdom, Switzerland, Germany the Netherlands, the Channel Islands and Australia concentrating on the retail, government, commercial (office and industrial) and hotel sectors.
- Redefine International will focus on property investments which provide a stable, predictable and low risk income stream, with opportunities to enhance value through active management;
- Redefine International will also selectively pursue development or redevelopment opportunities where they can be pre-let to businesses with strong rental covenants or in order to protect, enhance or extract additional value from existing investments;
- Redefine International may also look at distressed property investments where opportunities arise as markets recover. Investments outside the above criteria will only be made where risk adjusted returns to Shareholders are satisfactory and Redefine International has the reserves necessary to extract an above-market return from the investments.
Redefine International will make investments in property via a number of methods which include:
- acquisition of the real estate assets or portfolio of assets;
- direct investment in or acquisition of the holding company of the real estate asset or portfolio of assets;
- direct investment in or acquisition of a joint venture vehicle which has a direct investment in or holds the real estate assets or the holding company of the real estate asset or portfolio of assets; and
- investments in property securities (debt and/or equity securities) which are acquired when their value is considered superior to physical property. These investments are often of a strategic nature where the shareholding can be used to unlock value in underlying property assets or significant influence can be exerted through board representation or through management.
The level of gearing of Redefine International will be governed by careful consideration of the cost of borrowing and the ability to mitigate the risk of interest rate increases and the effect of leverage on the returns generated from assets acquired. Redefine International’s directors intend that Redefine International’s level of borrowing will be between 50 per cent. and 65 per cent. of the gross value of its total assets through the cycle but will not exceed 85 per cent. of the gross value of Redefine International’s total assets at any point in time. Details of Redefine International’s borrowing limits under its Articles of Association are set out below.
Redefine International's board may exercise all the powers of Redefine International to borrow money, to give guarantees, to mortgage, hypothecate, pledge or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of Redefine International and, subject to the provisions of the IOM Act and the Articles, to create and issue debenture and other loan stock and debentures and other securities, whether outright or as collateral security for any debt, liability or obligation of Redefine International or of any third party. Provided that Redefine International shall restrict the borrowings of Redefine International so as to secure that the aggregate principal amount for the time being of all borrowings by Redefine International and for the time being owing to persons outside Redefine International shall not at any time, without the previous sanction of an ordinary resolution of Redefine International exceed ten times the aggregate of:
- the amount paid up on the issued share capital for the time being of the Company; and
- the total of capital and revenue reserves (including any share premium account, capital redemption reserve, all as shown in the latest balance sheet of the Enlarged Company).
- Redefine International will not invest in forward funding a development on land in which Redefine International does not have an interest without a pre-let agreement to lease.
- Redefine International will not invest in properties where the purchase price is not supported by an external valuation.
- Redefine International will not invest in properties where there are known to be material environmental issues.
- Redefine International will typically invest in properties in the UK with fully repairing and insuring leases.
- No more that 15 per cent. in aggregate, of the value of the total assets of Redefine International may be invested in property securities.
In addition, pursuant to the UKLA Listing Rules, Redefine International is subject to the following investment restrictions:
- Redefine International must at all times manage its assets in a way which is consistent with its object of spreading investment risk and is in accordance with the Company’s published investment policy.
- Redefine International and other members of Redefine International must not conduct any trading activity which is significant in the context of Redefine International as a whole.
Redefine International's directors set the investment policy (subject to Shareholder approval), parameters and objectives and review and approve each sale or purchase of investment assets.
Redefine International’s Investment Advisor is responsible for identifying and reporting to the Enlarged Company’s directors, the availability of new investment opportunities that fall within the investment policy and objectives. Following the identification of a potential new investment opportunity and approval by the Enlarged Company’s directors, the Investment Advisor is responsible for negotiating the terms of investment.
It is anticipated that all associated costs and expenses incurred by Redefine International when acquiring or disposing of properties, property portfolios or special purpose property vehicles will be paid for and capitalised by Redefine International in order to determine the total cost.
Changes to the Investment Policy
Redefine International will apply its investment policy to all investments made and held by it. Any material changes to the investment policy of Redefine International will only be made with the approval of Shareholders by ordinary resolution at a general meeting, which will also be notified via a regulatory information service provider to the London Stock Exchange.
If Redefine International breaches its investment policy (including any investment restrictions), Redefine International will make a notification via a regulatory information service provider to the London Stock Exchange of details of the breach and of actions it may or may have taken.
Redefine International's Directors expect typical investors in Redefine International to be primarily UK based fund managers or sophisticated private investors or those acting on the advice of their stockbroker or financial adviser, who are looking to allocate part of their investment portfolio to the UK, Continental European and Australian commercial property market.