Reduced Eskom activity hits Indluplace rentals

THE FINANCIAL performance of Indluplace Properties, the listed real estate investment trust (Reit) with a portfolio of affordable rental housing, was being negatively impacted by the reduction in employment in Witbank caused by reduced activity at Eskom and the resultant non-renewal of bulk residential contracts with contractors.

Carel de Wit, the chief executive of Indluplace, said yesterday that the company’s residential vacancy rate of 8.4 percent at end September was heavily impacted by a single property in Highveld View, Witbank.

De Wit said if this building was excluded, the vacancy rate for the remainder of the portfolio was 5.2 percent.

“We are looking at various options to deal with Highveld View, with a view to disposing of the property in the medium term,” he said.

Indluplace yesterday reported a dividend a share of 97.75 cents for the year to September, which was marginally higher than the 97.74c in the previous year.

Following the acquisition of a R1.4 billion portfolio from the Buffet Group, Indluplace now has an expanded R4.3bn property investment portfolio, comprising 9 788 units across 176 properties and various provinces.

De Wit said this meant Indluplace had a well-diversified and defensive property portfolio.

Indluplace has grown its portfolio by 265 percent since listing in 2015 and has secured a significant presence in the affordable end of the residential rental market.

“Notwithstanding a strenuous macroeconomic environment, we have benefited from the acquisitions of the Diluculo and Buffet portfolios.

“Our expanded portfolio provides diversity in terms of location as well as mix of unit sizes and unit types that cater for the residential rental segment, which is expected to grow,” he said.

De Wit said these transformative acquisitions, included in this year’s results, resulted in a higher loanto-value ratio of 30.1 percent from 6.8 percent through R1.5bn in facilities secured from Absa, Investec and Standard Bank.

Shares in Indluplace closed unchanged yesterday at R8.49.