Mr. Gerald Leissner, CEO of Indluplace
Indluplace Properties Limited today listed on the JSE main board. Indluplace listed approximately 176 million ordinary shares in the Residential Real Estate Investment Trust (REIT) sector at R10 per share. This puts the Company’s market capital at R1.76 billion at listing. The share price increased by 5% to R10.50 per share shortly after the 9:00 AM listing. Indluplace will be the first residential focussed REIT listed on the JSE. “Indlu” is the Zulu word for “house”.
Mr. Gerald Leissner, CEO of Indluplace, said: “Indluplace, being the first listed focussed residential property fund, provides a diversification opportunity for traditional property investors and should attract new investors to the listed property sector. South Africa has strong demand for affordable rental housing and this translates to low vacancies and consistent rental growth. The fund will aggressively acquire additional revenue enhancing properties to generate growing income returns for shareholders. The fund has no debt on listing”
Indluplace has a portfolio valued at approximately R1.6 billion consisting of 95 properties and over 3 600 individual rental units. The 12 month forward yield from listing day is forecast at 8.2% and for the year ended 30 September 2016 8.4%. Listed residential property comprises less than 2% of South Africa’s listed property market, compared to over 13% in developed economies which shows opportunity for significant growth in this sector.
The listing follows a successful private placement and investor roadshow that was managed by Java Capital who acted as corporate advisor and book runner to Indluplace. The private placement raised R400 million in an oversubscribed placement, the proceeds of which were used to extinguish debt.
Mr. Warren Lawlor, Director at Java Capital said: “The reception from the investment community for a residential focussed property fund was very positive, supported by the quality of the management team and their proven experience in unlocking superior returns for their shareholders.”