Despite tough market conditions, JSE-listed real estate investment trust (Reit) Indluplace Properties had a “very good year” in the 12 months to September 30, with CEO Carel de Wit stating that the company had grown its diversified portfolio and proved to be a significant player in the provision of value-for-money rental housing.

Its headline earnings for the financial year were up 13% to R247.43-million, compared with R218.22-million in the 2016 financial year, while revenues increased to R409-million, compared with R349-million in the prior year.

Indluplace’s investment property increased from R2.4-billion to R2.9-billion during the period.

The increase was mainly as a result of the acquisition of Diluculo Properties for R475-million. The acquisition comprised 1 319 residential units across eight properties.

Garden Views, a 64-unit complex in Randburg, was also acquired for R25-million during the reporting period.

Indluplace’s residential units totalled 6 859 at the end of the reporting period.
 
“The recent acquisitions reflect Indluplace’s ability to grow the fund aggressively over time, through acquiring yield-enhancing properties. We have remained disciplined and focused with our strategy of only acquiring properties and portfolios that will provide income on the day of acquisition,” De Wit noted.  
 
Post year-end, the Reit acquired a further 2 803 residential units from the Buffet group for R1.4-billion.

The portfolio comprises 48 properties, mainly spread across Gauteng, but also includes two buildings in KwaZulu-Natal, marking the Reit’s debut to the province. 
 
“The Buffet transaction was significant for Indluplace. The portfolio compliments our current portfolio, being diverse in location as well as building and unit type,” commented De Wit.
 
Vacancies remained stable during the reporting period at 3.5%.
   
De Wit stated that the shortage of well-priced, well managed rental housing in South Africa provides the company with ample opportunities for continued growth of its diverse portfolio, while unlocking shareholder value in the future.

Indluplace declared a dividend of 24.48c a share for the quarter ended September 30. This brings the total dividend for the full year to 97.75c a share.

The dividend growth from the company’s current portfolio, excluding any further acquisitions and the potential effect of increased gearing levels, is expected to be between 4% and 7% for the 2018 financial year.