Property loan stock company Redefine Income Fund has closed an R800-million book building after strong demand resulted in the initial proposed amount of R650-million being oversubscribed.
The company had initially proposed to raise about R650-million through the issue of new shares. The offer was made to selected investors through an accelerated book build process and was subject to a minimum application of R1-million per investor.
The new Redefine linked units to be issued pursuant to the book build process have been priced at R10.20 apiece and a total of 78.43-million new Redefine linked units were expected to be issued and listed on May 3.
CEO Mark Wainer told Engineering News Online that the funds would be used to pay off a short-term bank loan, which Redefine had used to finance two property developments in Sandton, as well as a shopping centre in Klerksdorp.
He added that the funds would also go towards the company’s acquisition of additional shares in Australian property fund Cromwell.
Looking ahead, Wainer said Redefine would turn its focus to developing its stock, rather than buying new property.
“There is better value in development if we can find [properties] that are pre-let…like what we have done for Webber Wentzel Attorneys,” he added.
Redefine had been awarded a contract by Webber Wentzel Attorneys to invest R895-million to build the firm’s new headquarters in Rivonia road, Sandton.
The property is expected to have a value of about R1.1-billion at completion.
Wainer said Redefine was also currently building three distribution warehouses.
“We keep looking as the opportunities come,” he said, adding that his only real concern was South Africa’s sovereign rating that would affect the cost of funding.