05
August 2025
Redefine Properties Ltd.
Pierre Muller
Equity Analyst, PSG Wealth
Analyst recommendation
Buy
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| Counter | Share price | Intrinsic value | Difference |
| RDF-ZA | R4.83 | R5.49 | 14% |
As at August 2025
Executive Summary
We maintain our buy recommendation on Redefine Properties Limited (RDF) with an intrinsic value of R5.49, and an upside of 14%. RDF released its 1H25 results, which were mixed, but we have not changed our view on the company. We expect RDF’s distributable income per share to benefit from easing interest rate pressures. This is reflected in the company’s FY25 guidance of 50 to 53 cents per share, indicating an improvement compared to FY24’s 50 cents per share.
Analyst thesis
Valuation
Our view remains unchanged. Our intrinsic value for RDF remains R5.49, implying a 14% upside, based on FY26 forecasted FFO/s and a range of P/FO multiples. The original thesis hinged on improving property metrics and falling bond yields — the latter having declined by 107 bps. While we expect further yield compression due to rate cuts and controlled inflation, the upside appears limited as yields have reverted to their 10-year average, prompting a more cautious scenario weighting. We anticipate steady FY26 distributable income growth and a modest dividend increase, maintaining an 80–90% payout ratio. Despite a slight dip in the interest cover ratio (2.2x to 2.0x), it remains above the 1.75x covenant level.