By Wandi Ntshalintshali
JSE-listed Indluplace Properties is banking on getting approval from the Competition Commission for its acquisition of the Diluculo portfolio for R475 million, which it anticipates will enhance its portfolio and provide it further diversity in terms of location, building type and rental income.
The first residential focused real estate investment trust (REIT) on the main board of the JSE announced its interim results for the six months ended March 2017. Indluplace pays quarterly dividends and declared a dividend of 24,71 cents per share for the quarter to end March. This brings the total dividends for the six months to 48,54 cents per share; representing 5,5% growth which is in line with its guidance.
Since listing, Indluplace has grown its portfolio by more than 49% to 5 511 units in 117 buildings. The portfolio is currently valued at R2.4 billion.
During the reporting period Garden View, a 64 unit complex in Randburg was acquired for R25 million. The agreement to acquire the Diluculo portfolio for R475 million was also concluded. This will increase the total units owned by a further 24%.
“The Diluculo properties will enhance our portfolio and provide further diversity in terms of location, building type and rental levels. The transaction is conditional on Competition Commission approval but we expect to take over the properties in July 2017. This will bring our total residential units to 6 830 valued at almost R2,9 billion, showing the potential to grow the fund aggressively over time,” said CEO, Carel de Wit.
Indluplace is currently geared at 6,5%, which allows for substantial headroom to fund further acquisitions and improve dividend growth going forward.
“We remain excited about the ample opportunities for Indluplace to substantially grow the portfolio over the next few years and continue to pursue the acquisition of properties that provide income from the day of acquisition. Through the defensive and diverse nature of our portfolio and our low gearing, we are well positioned to navigate the challenging and uncertain macro-economic environment, maintaining an expected dividend growth of between 5,5% and 6,5% for the full year,” concluded Terry Kaplan, FD.