JSE-listed residential real estate investment trust Indluplace says its tenants have “reacted positively” to the reality that the extended lockdown in South Africa has brought.
Considering that families are now required to stay in their units for extended periods of time, the company on April 23 noted that, similarly, its building-based staff have had to adjust and find a new way of dealing with the related challenges.
As such, Indluplace noted that it has maintained essential services to tenants across its portfolio, while non-essential functions continue to be carried out remotely.
“Operationally, we have tried to maintain a business as usual approach as much as possible,” the company said, adding that this was also important when considering that many small, medium-sized and microenterprises rely on Indluplace to keep their businesses operational and their staff employed.
However, as expected, letting activity has reduced substantially as prospective tenants are unable to view units or to vacate or occupy premises, and Indluplace’s occupancy figures have therefore remained constant.
Collections remain a high priority and currently the company has collected over 85% of its residential billings for April.
Rental from retail tenants comprises about 5% of total revenue and collections for the same period are in the region of 50% of the total amount due.
The majority of the retail premises comprise small businesses that have not operated since the lockdown started, and Indluplace is engaging with these tenants on an individual basis to find solutions that are acceptable to both parties.
The group's loan-to-value ratio is expected to be better than the pre-close guidance of 36% with cash on hand, including undrawn facilities, of about R120-million.
However, the rapidly changing environment, lack of predictability and difficulty in estimating the overall impact of the pandemic and subsequent lockdown on the future performance requires Indluplace to retain as much capital as possible to protect its balance sheet and assist with liquidity, the company said.
Therefore, the company and its board resolved to defer the decision on the payment of an interim dividend for the six months ended March 31, 2020, to the end of the financial year.
This means that no distribution will be declared on the date of release of the interim results, compared with the distribution of 37.49c a share declared for the prior comparable period.
Further to this, Indluplace has also withdrawn its guidance for the full financial year ending September 30, 2020.
The company’s interim results for the half-year period will be published on or about May 20.