JSE-listed residential real estate investment trust (Reit) Indluplace on Wednesday posted an increase in its distributable income for the half-year ended March 31, to R117-million, up from the prior year’s R110-million.

The acquisition of Garden Views, a 64-unit complex in Randburg, in Gauteng, for R25-million in December 2016, has contributed to this growth. The company will continue to roll out its acquisition strategy in the second half of the year.

Speaking to Engineering News Online, CEO Carel de Wit noted that there were ample local opportunities for the company to expand its portfolio. “We still don’t understand how big this can really grow too, there are growth opportunities everywhere,” he added, noting that the company would take an opportunistic outlook on its acquisitions.

De Wit further highlighted that Indluplace would remain focused on South Africa, rather than seeking offshore opportunities, with the Reit currently having a deal at the Competition Commission for a property in Bloemfontein. “We are looking at areas where there is proven long-term demand,” he pointed out.

However, De Wit noted that the company was not unperturbed by the current macroeconomic environment and uncertainty. “Growth in the [precariousness of] economic circumstances definitely also worries us, with our customers feeling those pressures; however, the residential offering is a low-risk, defensive investment,” he highlighted, adding that Indluplace’s balance sheet was further strengthened by it maintaining its cost-to-income ratio.

FD Terry Kaplan added that Indluplace’s low gearing of 6.5% added significant available headroom, which would improve the dividend growth going forward.

De Wit said that the company was on track to meet its target of delivering dividend growth of between 5.5% and 6.5% for the full year to September 30. For the quarter ended March, Indluplace declared a dividend of 24.71c a share.

Indluplace’s finance income has increased from R8.4-million in 2016 to R11.4-million for the six months ended March this year, as a result of excess funds being placed with Arrowhead Properties and in its bank facilities.

Residential vacancies of 4.5% also decreased from 6.2%.