Redefine Properties Swings to Profit on Increased Rental Rates

Redefine Properties Ltd., South Africa’s second-biggest real estate developer, swung to a profit of 1.16 billion rand ($128 million) in the first half as it improved properties and raised rents.

Net income compared with a 511 million-rand loss a year earlier, the Johannesburg-based company said in a statement today. Revenue advanced to 1.85 billion rand in the six months through February, from 1.6 billion rand as the company renewed leases at an average rental increase of 7.2 percent even as vacancies grew, it said.

Redefine is raising cash through bonds and a share issue to finance acquisitions and new projects. The company spent 5 billion rand in cash and shares to amass a 46 percent stake in Fountainhead Property Trust, blocking Growthpoint Properties Ltd.’s higher bid.

“The local trading environment remains challenging and is anticipated to remain subdued in the medium term,” the company said. “Distributable income is anticipated to grow in the second half at a similar rate to the interim period.”

The stock advanced 0.6 percent to 10.80 rand a share on April 30, its highest price since at least 2000. Redefine was unchanged at 9:15 a.m. local time today, and has gained 15 percent this year.

Before it's here, it's on the Bloomberg Terminal.