Redefine confident about its balance sheet amid coronavirus outbreak
The group, which has logistics assets in Europe, says it believes its balance sheet is well positioned to withstand the viral outbreak’s disruption to trade
Redefine Properties, one of SA’s biggest landlords, said on Friday it believed its balance sheet remained resilient even as the coronavirus pandemic closes malls and restricts trading activity.
The JSE’s property index has more than halved so far in 2020, amid fears of rising operating costs even as shoppers stay away from malls.
Redefine, which has a portfolio of investments worth more than R95bn, had reported debt of R41.8bn at the end of August, with the group saying it remained well within its debt covenants with lenders.
Redefine is moving to reduce discretionary spending, with the group saying it had a strong liquidity position with access to R2.8bn in committed undrawn credit facilities.
Redefine, which has been listed for nearly 20 years, initially invested its capital in SA but it has expanded into Poland, the UK and Australia at different times to diversify against weaknesses and risks at home.
Major retailers across Europe are closing stores or reducing shopping hours, with countries including Poland, Spain and Italy ordering stores to close temporarily.
“Despite the limitation of trade in Poland’s shopping centres the movement of freight around, in and out of Poland continues as usual and the manufacturing sector is not shut down,” it said.
There was in fact additional demand for logistics space to support current contingency measures, while the Polish government has announced a $51.5bn rescue package designed to shield the economy from the effects of the virus, the group said.
Redefine first invested in Poland through mall and office owner EPP in March 2016. It has since invested in distribution warehouses and logistics buildings in the country, which is Eastern Europe’s largest economy.
In SA, normal domestic trading had not yet been materially affected by disaster management regulations, and business continuity plans had been implemented, the group said.
Redefine’s share price has fallen 57.75% so far in 2020, compared with a 51.79% fall in the JSE’s property index.
With Alistair Anderson