Redefine half-year HEPS down 14.2%

Redefine Properties, a leading property company, recently reported a decline in their headline earnings per share by 15%. Despite this dip, CEO Andrew Konig remains optimistic about the company's future prospects. In a recent interview with CNBC Africa, Konig addressed the market's concerns and outlined the strategies Redefine Properties is implementing to navigate the challenging environment. One of the key issues raised during the interview was the company's debt levels. Konig acknowledged that the current debt situation is a pressure point but assured that they are actively managing it. He mentioned upcoming cash proceeds from a land disposal in central Warsaw and planned non-core asset disposals that will help reduce the loan-to-value ratio. Konig also highlighted the positive trend in property valuations, which will further alleviate the pressure on the company's financial metrics. Konig emphasized that Redefine Properties' office portfolio, which is predominantly composed of premium and A-grade properties, is poised for improvement. While lease reversions have declined, he pointed out that a significant portion of lease renewals are either flat or positive. With the disposal of non-core assets and a focus on quality properties, Konig expects to see a positive shift in the office matrix by year-end. Regarding the company's payout ratio, Konig noted that Redefine Properties chose to pay out 80% of its distributable income, which is at the lower end of their policy range. However, he reassured investors that the second half of the year is expected to see a higher payout ratio to align with the annual target of 85%, in line with last year's performance. When asked about the outlook for the remainder of the year, Konig expressed cautious optimism. He indicated that while the second half may not see significant improvements, it is unlikely to deteriorate. Redefine Properties has set a flat guidance for the period, with the aim of achieving the targeted payout ratio for the year. In light of external factors such as the upcoming elections and potential interest rate changes, Konig remained focused on the controllable aspects of the business. He highlighted the importance of mindful optimism and strategic management to navigate uncertain economic conditions. Despite external uncertainties, Konig expressed confidence in the company's solid metrics and the management team's ability to address challenges. Konig also provided insights into the international market, specifically highlighting the positive developments in Poland. With reforms in the real estate sector, including the lifting of the Sunday trading ban and the introduction of REITs, Poland's real estate landscape is set for growth. Additionally, favorable economic indicators such as GDP growth and decreasing inflation contribute to a positive outlook for disposable income in the country. In conclusion, Konig emphasized the need for a critical yet optimistic approach to navigating the current economic landscape. While challenges persist, Redefine Properties remains steadfast in its commitment to strategic growth and financial stability.