Redefine International has announced its results for the year ended 31 August 2016. Its EPRA NAV per share fell to 40.0p (2015: 41.0p), a decrease of 2.4%, incorporating a one-off impact of AUK portfolio acquisition costs and a 1.0% increase in UK Stamp Duty Land Tax. Earnings per share were flat at 3.2p and they are paying a second interim dividend of 1.575p per share, taking the full year dividend to 3.2p per share (2015: 3.25p per share) – a fall of 1.5%.
Gross rental income increased by 1.0% on a like-for-like basis and the portfolio valuation increased by 3.4% on a like-for-like basis. 75 rent reviews were agreed providing a total rent of GBP22.4 million, 4.9 per cent (GBP0.9 million) increase above the passing rent. 64 new lettings or renewals were completed providing a total rent of GBP4.3 million (GBP1.1 million increase on passing rent), 4.4 per cent ahead of ERV. Portfolio occupancy based on lettable area declined marginally to 97.1 per cent (2015: 98.1 per cent) driven largely by two units totalling 8,818 sqm (94,709 sqft) let to two tenants who went into administration during the last six months.
Since the result of the EU referendum, they have concluded 25 leases totalling GBP2.6 million in annualised gross rental income 4.5 per cent ahead of ERV, with a number of further leases at various stages of negotiation or in solicitors’ hands. They say that, currently, within the markets in which they operate, there is little evidence to suggest a material change in occupational demand.
They took on more debt, pushing their loan to value ratio up to 53.4% from 51.8%, but their weighted average cost of debt reduced by 50 bps to 3.4%.
The deal they did to buy the Aegon UK portfolio, helped by a £115m fund raise, increased the value of the portfolio to GBP1.5 billion. They also sold ten petrol filling stations during the period for GBP12.0 million at a 6.0 per cent premium to book value. The Group’s remaining petrol filling stations are let to BP with an average lease length of 16.1 years and subject to fixed five yearly rental uplifts. 16 Grosvenor Street, which formed part of the second tranche of the AUK portfolio, was sold prior to the transaction’s completion for GBP35.6 million, 22.8 per cent above the purchase price. The Hague office building, the last remaining asset outside our core markets, was sold together with associated debt of GBP15.0 million for a nominal consideration.
Redefine have a £25.9m programme of refurbishment and redevelopment the largest of which is the construction of a store for Primark and their Ingolstadt, City Arcaden, shopping centre.
RDI : Redefine NAV and dividend dip