Our opinion on the current state of REDEFINE(RDF)Redefine (RDF) is South Africa's second-largest real estate investment trust, with assets valued at R72.9 billion and a market capitalization of R25.1 billion. The company primarily holds industrial and office properties and has investments in Poland, the UK, and Australia. Its significant exposure to South African office space makes it sensitive to the South African economy and political developments, including elections.
Despite these challenges, Redefine remains stable and well-managed, trading well below the book value of its assets. The company is pursuing a controlling interest in the Polish property company, EPP, expanding its international footprint. For the fiscal year ending 31st August 2024, Redefine reported a 7.5% increase in revenue and a 57.3% rise in headline earnings per share (HEPS). Management anticipates a gradual property cycle recovery in FY25, contingent on easing interest rates.
Technically, the stock has faced a prolonged decline from its high of 1250c in April 2015, bottoming at 159c with the COVID-19 pandemic's impact. Though it has partially recovered, it has moved sideways and downward since late 2021. Redefine trades at around 64% of its net asset value (NAV), suggesting that it may be oversold and undervalued. However, its high loan-to-value (LTV) ratio is a potential concern for investors seeking stability.
