Indluplace’s residential portfolio reports good letting progress

Highveld View
Highveld View

Indluplace Properties has reaffirmed the position of its portfolio in an investor update published recently published to the market.

The Company that listed almost five years ago (and provides homes to households with incomes ranging from R7 500 to R30 000 per month) stated that its portfolio has performed in line with expectations despite prevailing economic conditions that remain extremely difficult.

Indluplace’s ability to attract new, quality tenants and retain existing tenants is displayed by satisfactory occupancy numbers. Aware of the financial pressure customers are under, Carel de Wit, CEO of Indluplace commented: “Although competition for tenants intensified among landlords our team’s enhanced capacity and capabilities stand us in good stead with good letting progress reported across our portfolio, positively impacting vacancies. Letting at Highveld View, Emalahleni was particularly encouraging and our marketing initiatives were very successful, resulting in the complex currently over 95% occupied by individual tenants compared to 33% in February 2019.”  Rental escalations remain subdued for now as utility increases and low economic growth impacts on affordability.

The disposal of small, non-core properties and certain student buildings is progressing well: “Our strategy to dispose of small properties, mainly in the south of Johannesburg as well as the Trifecta student accommodation building in Durban, is nearly complete and we expect these sales to be completed by mid-2020. The proceeds of these sales amounts to approximately R69 million and will be principally applied to reduce bank debt and to fund our capital expenditure programme critical to ensure our assets remain robust in the current environment,” said De Wit.

The process of identifying and disposing of non-core properties continues and Indluplace remains committed to keeping its current loan to value ratio of 36% stable and its balance sheet strong. The potential impact of the global COVID-19 virus pandemic is uncertain and the Company continues to monitor events closely. A communication programme to provide information to tenants has been launched.