Redefine Properties International CEO Mike Watters. Picture: FINANCIAL MAIL
Mike Watters. Picture: FINANCIAL MAIL

LONDON-listed Redefine International, which is majority held by JSE-listed Redefine Properties International, on Wednesday said it had acquired three prime retail properties in Germany, for a combined €189m.

"The three strongly located shopping centres are attractive additions to our portfolio," Redefine International Group CEO Mike Watters said.

"They will enhance the overall quality of our assets and provide the opportunity to create both strong income returns and long-term capital growth for our shareholders."

The acquisition, which is the first of two "significant transactions" that the company suggested in its recently released interim management statement, has a blended initial net yield of 5.5%.

Last month, the South African Reserve Bank approved an inward listing for Redefine International on the JSE for later this year.

This will result in the delisting of Redefine Properties International, as well as simplifying the property group’s structure and allowing South African investors direct access to Redefine International.

Redefine Properties owns about 48% of Redefine Properties International, which in turn owns 65% of Redefine International. Following the inward listing, Redefine Properties will own about 34% of the overall Redefine International group.

Mr Watters said that the retail properties in the latest acquisition included the 19,000m² Schloss Shopping Centre in Berlin, the 15,000m² Bahnhof Altona Shopping Centre in Hamburg, and the 10,000m² City Arkaden Shopping Mall in Ingolstadt.

The largely UK-focused Redefine International said the completion of the transaction, which was subject to certain conditions which the company expected to be fulfilled by August 30, would "substantially expand" its portfolio of European assets to about £360m.

This represented about 30% of the company’s total portfolio by value, up from 19% in February.

The property company’s European portfolio is focused on income-producing assets in Germany and Switzerland.

Mr Watters said Redefine Properties International offered investors a "reliable rand hedge" based on revenue streams from first world property markets.

The group’s new structure, facilitated by the inward listing of Redefine International, is expected to assist Redefine International’s move to internalise its management function, while also permitting its conversion to a UK real estate investment trust (Reit) structure.

Shares in JSE-listed Redefine Properties International rose 2.98% to R7.25 in afternoon trading.