The residential sector, and specifically rental residential is hugely under-represented in the South African listed property sector. In developed economies residential REITs represent around 15% of the listed property sectors with comparatively massive funds acknowledged for their defensive nature and trading at very competitive yields compared to other sectors. Indluplace was the first rental residential REIT to list in South Africa.
There is currently a shortage of well-priced, well managed rental housing in South Africa as evidenced by the relatively low vacancy rates in this market across various rental levels and income groups. There is also good demand for well located, affordable student accommodation.
Indluplace listed in June 2015 and is the largest REIT focused on residential properties. Since listing it has increased the value of its properties to over R2,9b (+85%) and currently owns 125 residential properties consisting of over 6 800 residential units and about 14 800m2 retail area, spread mainly across Gauteng, but with representation in Mpumalanga and the Free State Indluplace intends to continue with this aggressively growth by acquiring yield enhancing properties and portfolios that provide income on day of acquisition. Transactions currently underway will increase the portfolio to over R4bn with about 9 700 residential units.
Our investments in rental residential properties will focus on providing value for money housing, where a proven demand exists, generally in larger urban centres close to work opportunities and transport infrastructure. Other residential forms such as student housing or higher income housing will be evaluated on a case by case basis. Indluplace offers an exit for developers or owners of residential stock or portfolios, and utilises specialist outsourced property managers for the appropriate portfolios.
Indluplace was incorporated as a public company on 3 December 2013. The company’s financial year end is 30 September.