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Redefine International completes €106 million german office portfolio disposal

18 Jan 2017

Redefine International, the FTSE 250 income-focused UK-REIT, announces that it has completed the sale of four German office assets for a gross consideration of €106 million. The assets, which were disposed of via a share sale, were held in a joint venture with the Menora Mivtachim Group ("Menora"). The Company’s 49% proportionate share reflects an 8.6% premium to the book value. It is intended that Redefine International’s net proceeds of €24.9 million, which includes a performance fee of €2.4 million, will be reinvested into value accretive opportunities and used to reduce debt.

The properties, situated in Berlin, Dresden, Cologne and Stuttgart, total 45,145 sqm (485,937 sqft), and are let to a German government-backed social insurance body, VBG, on a combined WAULT of just under seven years. The portfolio generated a total annual gross rental income of €8.1 million of which €4.0 million was attributable to Redefine International.

In 2012, the Company entered into a joint venture agreement with Menora, one of Israel’s largest insurance and pension funds, in order to undertake certain co-investments in properties located in Germany. The agreement reflected a common investment strategy of acquiring high quality real estate, leased to strong covenants on long-term leases. At the time, Menora identified Redefine International as having the necessary deep-seated experience and market understanding to source suitable investments, manage the acquisition process and provide the subsequent asset management services.

Mike Watters, CEO of Redefine International commented:

"In line with our strategy to continuously improve the quality of our portfolio, these four offices were identified for sale. We are very pleased with the transaction having achieved an impressive 27% IRR over the investment period. The proceeds from this successful and timely sale, which were enhanced by the current strength of the Euro, will be reinvested into value accretive assets and used to effectively reduce debt. This is in line with our stated aim and commitment to focus on delivering superior income-led total returns."

Note to editors:

About Redefine International

Redefine International is an income focused FTSE 250 UK Real Estate Investment Trust (UK-REIT) committed to delivering superior distributions to its shareholders throughout the property cycle.

The Company’s income driven total returns are underpinned by a diversified portfolio, together with an efficient capital structure. The continued transformation of both the corporate structure and asset base offer a solid foundation to drive further value. The diversified portfolio, independently valued at £1.53 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 they can capture income and value growth by attracting high calibre occupiers on long leases. The Company’s 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.

Currently the secure income stream is supported by a diversified portfolio and tenant base, with a WAULT of 7.8 years complemented by an average debt maturity of 6.9 years of which over 95% of interest costs are either fixed or capped. The Company is focused on all aspects impacting shareholder distributions and boasts one of the lowest cost ratios in the industry whilst continuously driving a lower cost of debt.

Redefine International holds a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange and is included within the FTSE 250, EPRA and GPR indices.

The Company will be hosting a Capital Markets Day on Monday, 6 February 2017. The presentation and a live webcast will be available on the Company's website at 10:30am (UK time), 12:30pm (SA time) on Monday, 6 February 2017: www.redefineinternational.com.

For more information on Redefine International, please refer to the Company’s website www.redefineinternational.com.

About Menora Mivtachim

Menora Mivtachim Group specializes in insurance business, pension and finance. The group manages assets totaling approximately153 billion Israeli shekels. The group offers a variety of solutions in all sectors of life insurance, health insurance, property and casualty insurance, pension funds, new pension funds, provident funds, investment portfolios, mutual funds and advanced financial products. Menora Mivtachim fully owns the largest pension fund in Israel ‒ "New Mivtachim," with 81 billion Israeli shekels worth of assets under management. Operating since 1935, Menora has distinguished itself as a reliable, innovative and stable company, providing its customers with professional and efficient service.

For more information: www.menoramivt.co.il/wps/portal/ir/home

 

For further information: Redefine International P.L.C.

Mike 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

Instinctif Partners

SA Public Relations Adviser

Frederic Cornet, Lizelle du Toit

Tel: +27 (0) 11 447 3030

Java Capital

JSE Sponsor

Tel: +27 (0) 11 722 3050

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