‘Durability is revealed in crisis’: Redefine Properties lifts outlook despite global volatility
SOUTH African real estate investment trust (REIT) Redefine Properties says improving property fundamentals and growing operational momentum have positioned the group for sustained earnings growth in 2026, despite mounting uncertainty linked to the fluid Middle East conflict.
The JSE-listed landlord lifted guidance for distributable income per share growth for the 2026 financial year to between 6% and 7%, up from previous guidance of 5% to 6%, after reporting a 7.4% increase in distributable income for the six months ended February 28.
Redefine Properties CEO Andrew König described the operating environment as a recurring “game of snakes and ladders”, with successive macroeconomic and geopolitical shocks, curiously often around March, repeatedly interrupting the sector’s recovery momentum.
“During a crisis, your durability is not built – it’s revealed,” he said, adding that Redefine had emerged stronger after each successive market disruption over recent years.
König said the momentum now feeding through the business was increasingly visible in underlying operational metrics and earnings growth.
“The property metrics are either stable, improving or growing and that’s now translating directly into distributable income growth.”
Property fundamentals gain traction
Occupancy across Redefine’s South African portfolio improved to 94,2%, while occupancy in its Polish logistics platform, ELI, rose to 98,7%, reflecting continued demand for its high-quality retail, logistics and well-located office assets.
The South African retail portfolio remained a standout performer during the period, with occupancy increasing to 95%, trading density rising 3% and renewal reversions turning positive at 3%, signalling improving trading conditions and resilient consumer spending.
Demand for premium-grade office space continued gaining traction, with office occupancy improving from 87% to 88,9% and tenant retention at approximately 96%, although renewal reversions remained under pressure at -15.8% as the sector adjusted to subdued economic growth.
Industrial assets continued outperforming, with occupancy at 97,2% and positive rental reversions of 4%, reinforcing the segment’s position as the anchor of Redefine’s South African portfolio.
Redefine Properties Chief operating officer Leon Kok said the improvement in property values during the period was driven by stronger income performance rather than valuation yield compression.
“Valuation assumptions have remained relatively stable, with the uplift in property values largely supported by improved income performance,” he said.
Redefine also continued expanding its renewable energy initiatives during the period, increasing installed solar PV capacity by 7% to 62MWp as the group intensified efforts to reduce operating costs and improve energy resilience.
Beyond onsite generation, the group is also advancing its electricity wheeling strategy through both municipal and private sector arrangements. Kok said Redefine had concluded a short-term 8MWp offtake arrangement and signed a longer-term, 20-year 17 MWp wheeling offtake agreement that will become effective early in the new year.
Middle East tensions cloud sector outlook
König said the improved earnings trajectory remained closely linked to the direction of interest rates, with oil price volatility and inflation risks emerging as key threats to the sector’s recent rerating.
“Pushing against this momentum is the cyclical Middle East conflict. The key uncertainty is how long the conflict and its aftershocks will persist.”
Despite the uncertain macro backdrop, Redefine said it expected the operational momentum built in the first half to continue supporting earnings growth through the remainder of the financial year.
“We believe the property fundamentals remain structurally intact and, over the medium term, those fundamentals will outpace cyclical shocks brought on by geopolitical events,” König said. “Despite the current volatility, we still believe firmly in the upside of us.”
