JSE-listed Indluplace has declared a gross dividend of 28.13c apiece for the financial year ended September 30.
The company notes that the impact of the Covid-19 pandemic on the economy, its tenants and the company has been severe and continued well into the year.
It opted to proceed in this environment with the considerable task of setting up a subsidiary, Indluplace Property Services, to undertake the property management of its portfolio, which it notes was taken in the best interest of the long-term sustainability of the company.
Indluplace says the aim was to keep the performance of the properties stable during this difficult transition and this has been achieved.
“The residential letting environment was and remains extremely competitive and, while we concluded a considerable number of new leases to qualifying tenants, the higher tenant turnover meant that our overall average occupancy numbers were slightly down for the year,” the company states.
Contractual rental income decreased from the prior year to R490.1-million, attributable to the 4.4% increase in average vacancies to 11.8% in the current period compared with the prior period, combined with the delayed start to the academic year which impacted negatively on revenue generated by student accommodation.
The residential vacancy rate of 12.8% at period-end was mainly as a result of the increased churn at the back end of 2020.
Property operating costs increased from the prior year to R336.7-million, mainly as a result of higher-than-inflationary municipal cost increases especially in the student portfolio.
Administration costs decreased from the previous year to R28.4-million as a result of the internalisation of the property management functions. With the previous hybrid model, various property-related cost were covered by head office staff.
Finance income has decreased from the prior year to R6.5-million as a result of the decreased interest received in terms of the share purchase and option scheme.
In line with the company’s strategy of disposing of noncore smaller properties, 22 properties with a combined value of R74.2-million were transferred during the year.
Indluplace says it achieved most of its strategic objectives for the period, with sustainable value being created in the property management business.
Management notes that the environment remains predictable, and that it will remain focused on ensuring that its properties and services to tenants enable it to retain and attract quality tenants.
Owing to the uncertain and evolving environment, it has not provided guidance on a distribution a share for the next financial year.
Key operating focus areas for next year include improving vacancies, utilities, cost to income ratio, building security partnerships and capital expenditure.