WHERE TO INVEST: Inside the mind of Redefine: A bold Poland push and a lesson in active asset management

Redefine Properties has seen a 22% share price increase and a 32% total return, including dividends, over the past year. The property group's strategy involves balancing South African retail, industrial, and office plays with a larger exposure to Poland. By utilizing refurbishments and developments, Redefine aims to unlock capital upside and protect dividends.

The company's Capital Markets' Day presentation highlights that buildings do not create value, but people do, and that active asset management is the principal source of value creation.

South Africa's young, resourceful, and adaptable talent pool is seen as an asset, but the economy poses challenges. Poland is a region Redefine is targeting, with plans to allocate 40% of capital to the country. The capital expenditure on existing assets in Poland has been strong, with R4.2-billion spent on local developments compared to R1.4-billion in Poland.

South Africa's retail sector is the strongest operating sector, with The Foschini Group being the single-largest exposure for retail REITs. The domestic industrial market offers growth potential due to positive reversions and scarcity of suitable sites. The office sector remains challenging, but vacancies are expected to improve in the coming years. Redefine is prioritizing P-grade offices in Gauteng, as the region's potential for improvement is promising.

Redefine is also exploring energy investments in South Africa and focusing on self-storage and mini units in Poland, where capital uplift potential is strong. The company emphasizes active asset management as the key driver of value, rather than passive acquisitions of existing properties. The risk of South African consumer behavior remains the main underlying concern.