Indluplace Properties Limited today announced that it has concluded an agreement with the Buffet Group to acquire 2 914 residential units with 3 400m² of associated retail space for a purchase price of approximately R1,4 billion. The transaction is subject to shareholder and Competition Commission approval.
Buffet is a well-known private equity and investment consortium that has, through its wider group, interests in various property holding entities and other privately owned and listed businesses in South Africa.
The portfolio comprises 51 properties, mainly spread across Gauteng. Two buildings, comprising 119 units, marks the company’s first entry into KwaZulu-Natal, enhancing the diverse nature of Indluplace. The majority of the properties comprise of suburban blocks and town house complexes. Approximately half of the portfolio to be acquired consists of two bedroom apartments with the balance spread between one and three bedroom units, bachelor units as well as rooms.
“The Buffet Group has substantial investments in the property sector across the country and we believe this transaction provides a good platform for further transactions with the group. Buffet is also providing Indluplace with a right of first refusal on future pipeline of at least R500 million … This is a significant transaction for Indluplace and is further proof of the growth potential within the listed residential sector. The portfolio compliments our current portfolio, being diverse in location, building type and unit type,” said CEO, Carel de Wit.
The average rental across the residential units is around R4 300 per month.
“With the recent acquisition of the Diluculo portfolio, the acquisition of these properties, and current opportunities under review, we are excited about Indluplace’s opportunities for growth.”
“With our property management function outsourced to specialists with strong brands in our areas of operation, we are well positioned to continue to deliver growing dividends for our shareholders. Rental residential properties offer a defensive investment for property investors especially in the current turbulent economic environment,” concluded de Wit.
Read the SENS announcement here: SENS: Acquisition of Various Portfolios of Residential Properties and Withdrawal of Cautionary Announcement