Residential real estate investment trust Indluplace said vacancies for the first half of the financial year were better than the same period last year  File picture: James White.
Residential real estate investment trust Indluplace said vacancies for the first half of the financial year were better than the same period last year File picture: James White.

Indluplace vacancies down in spite of pressures

By Edward West Time of article published Mar 16, 2020

Share this article:

CAPE TOWN - Residential real estate investment trust (Reit) Indluplace said on Friday that vacancies for the first half of the financial year to March 31, 2020 were better than the same period last year, in spite of the economic pressures faced by its customers.

The company said ahead of a pre-close briefing to be held today that its portfolio was 94percent occupied, compared with 91percent in February 2019.

This improvement had incurred increased letting costs, but the benefits of having improved occupancy were expected to outweigh these costs.

The share price rose 2.24percent to R3.20 on the JSE on Friday.

The letting performance at Highveld View, Emalahleni, was “particularly encouraging” with marketing initiatives proving successful, and the complex was 95percent occupied, versus only 33percent in February 2019, by individual tenants.

About one-third of Indluplace’s portfolio is in Johannesburg inner-city, and despite a substantial increase in the supply of rental units since the end of 2019, the inner-city portfolio was stable.

Total portfolio bad debts and arrears remained under control.

“Despite our successful focus on tenant retention, escalating utility charges make substantial rental escalations impossible at this time,” the group said in a statement.

Some 27 non-core properties were sold, or were in the process of being sold, mainly in Johannesburg south, as well as the Trifecta student accommodation building in Durban.

“We anticipate the transfers will be completed by mid-2020.” The proceeds of about R69million would be used to reduce bank debt and to fund capital expenditure.

The group planned to keep loan-to-value stable at 36percent and its balance sheet strong.

Economic conditions remained “extremely difficult, with customers under financial pressure and competition for tenants intense among landlords”, but the portfolio was performing in line with expectations, the group said.

BUSINESS REPORT 

Share this article: