Redefine International raises £115m to fund property deal
Redefine International has raised £115m via a share placing to help fund its £437m acquisition of a portfolio of properties from insurer Aegon's UK Property Fund.
The retail and commercial property investor, which is listed in both the UK and South Africa, bought the first tranche of the AUK Portfolio in October for £203.5m using existing cash resources and a new banking loan.
The placing will help fund the second tranche of the acquisition, which is due to complete on 1 March. The second tranche originally included 10 properties, however, one at 16 Grosvenor Street in London was sold, reducing the total purchase price to £210.2m.
Redefine originally aimed to raise £100m but increased the placing size to £115m after greater than expected demand from investors. Shares were issued at 42.5 pence per placing share.
Peel Hunt and JP Morgan Securities are acting as joint bookrunners on the deal while Java Capital Proprietary is acting as sponsor, bookrunner and corporate adviser in South Africa.
Redefine International owns £1bn of retail, commercial and hotel properties across the UK and Germany. These include several Holiday Inn and Travelodge hotels as well as St George's shopping centre in Harrow and Banbury Cross retail park in Oxford, which it bought separately for £52.5m from Aegon in September.
The AUK acquisition will add another 19 retail, office and industrial properties to its portfolio boosting its value to around £1.5bn and generating around £103m in gross rental income. Mike Watters, Redefine's chief executive, said:
"The completion of the AUK Portfolio will represent another key milestone for Redefine International. Over the last five years we have overseen the successful transformation of the Company's corporate structure and asset base, significantly enhancing shareholder returns.
"We firmly believe that performance in the next phase of the property cycle will be primarily weighted towards income returns and rental growth, making our core strategy of recycling capital into assets which display strong income fundamentals and benefit from occupier demand, like those included in the AUK Portfolio, even more relevant."