Indluplace internalizes property management function

Carel de Wit, CEO of Indluplace.
Carel de Wit, CEO of Indluplace.

Indluplace has published its operational update via SENS ahead of the release of its 2021 financial yearend results scheduled for release during mid-November 2021.

The REIT expects to remain within the banks’ covenants for both its loan-to-value (LTV) ratio and interest cover ratio as at 30th of September 2021. While the board has yet to decide whether a 2021 full year dividend will be declared as well as the pay-out ratio, the company expects its dividend to be lower than that of the comparable reporting period.

In early May 2021, Indluplace began its property management internalisation process (previously managed by outsourced property managers) which has now been completed with its final portfolio handed over on the 1st of September 2021. With a fully resourced property management function, capable of managing its portfolio of over 9 000 residential units and approximately 17 000m2 of retail space with all the associated structures, infrastructure, processes, and procedures, all building-based staff were absorbed into the new entity with most of the head office team newly recruited from the market.


Indluplace’s average monthly vacancy rate for FY2021 (which is expected to be under 12%) is considerably higher than the 7.4% average monthly vacancy rate for FY2020. The company reported a decrease in tenant turnover (compared to previous years) but net tenant loss for the reporting period was substantially better than expected. The year-end vacancy rate of approximately 12.5% has been stable for the last four months with indications that the market is strengthening.

Collections and bad debts:

Collections have been stable throughout the handover period, and Indluplace expects the full year collection rate to be slightly higher than the previous year (96%). The REIT has had to deal with historical legal matters but bad debts and provisions for the year are in line with expectations and below 2020’s 3.9%.


Indluplace’s strategic disposal of its smaller assets in specific areas is almost complete. During the reporting period, 21 properties were transferred at a value of R72.45 million with a further 17 properties sold for R49 million – but not yet transferred. Six properties – valued at c.R400 million, including its student accommodation portfolio – remain unsold.