- Portfolio growth of 82% year-on-year.
- Largest focused residential REIT.
- Diverse and defensive portfolio delivering in difficult market.
Indluplace Properties Limited has released the company’s interim results for the six months ended 31st of March 2018, declaring a dividend of 48.56 cents per share for the period.
“We faced a challenging operating environment due to the local macro-economic and political uncertainty during 2017. However, our diverse portfolio is well positioned, offering value for money rental housing across location, building type and unit type among various income groups. Our investment case has proven to be solid during uncertain times” commented CEO, Carel de Wit.
The acquisition of the Buffet portfolio added 2 803 units spread across 48 properties at R1.4 billion, bringing the total units owned to 9 662, resulting in unit growth of 74% year-on-year.
“We have now successfully completed a complex handover of the 2 803 units from the Buffet transaction. Together with our experienced and specialised property managers, we worked hard to integrate the Buffet properties into our broader portfolio and are pleased with the performance thereof,” said De Wit.
Vacancies increased during the reporting period from 4.5% at 31 March 2017 to 6.3% as at 31 March 2018. Although there is an increase from the 3.5% reported at year-end, Indluplace continues to work closely with property managers to implement agreed strategies to reduce the vacancies.
“The implementation of our focused management strategies is paying off and we have successfully reduced vacancies across the portfolio post the reporting period. Our intensive marketing strategies have started to bear fruit with upside anticipated to be evident in the next financial year. Indluplace prides itself in creating homes and environments where families can live safely across our portfolio,” added De Wit.
Secured financial liabilities increased from R199.6 million to R1.3 billion over the reporting period. The acquisition of the Buffet portfolio was funded with a joint ABSA and Investec Bank facility. Indluplace is able to draw on a R1.5 billion facility in total, when taking into account the R200 million Standard Bank 3-year facility. Indluplace had drawn on R1.3 billion of total facilities as at 31 March 2018, resulting in an LTV of 29.4%.
Terry Kaplan, Financial Director commented:
“The Buffet portfolio acquisition has been transformative for Indluplace and we are well positioned to fund future acquisitions.”
The company’s revenue, excluding straight line rental income, has increased from R195.0 million at 31 March 2017 to R334.7 million at 31 March 2018 as the full effect of the acquisitions concluded during the current and previous financial year, as well as escalations are considered.
“We continue to seek opportunities to substantially grow the portfolio in the medium to long-term. Given the defensive nature of our diverse residential portfolio, coupled with strong, hands-on management and fundamentals in the residential sector, Indluplace expects to deliver dividend growth of around 4% for the full year,” concluded De Wit.