Indluplace Properties, the subject of an acquisition offer by SA Corporate Real Estate, said yesterday that targets its board had set to stabilise distributions in 2022 and to show inflation related growth in 2023 had been met.
The targets had followed the property management function being internalised in 2021, the group that has a portfolio of 9 282 residential units worth R3.4 billion, mainly in Gauteng, said in its results for the six months to March 31, 2023.
“The portfolio has recovered substantially over the last few months as we were able to attract well over 350 new tenants per month over the six months, with February recording a record number of 472 new leases and significantly improved occupancies in the student portfolio. The occupancy improvement continued post-March,” directors said.
The proposed offer from SA Corporate was R3.40 cents cash per Indluplace share. Indluplace’s share price was 0.6% higher at R3.36 yesterday afternoon. It’s listing will end if the acquisition proceeds. Its shareholders vote on the scheme on June 5.
In the six-month period, revenue increased 7.2% to R302.83 million. The increase was attributable to uptake of the student beds in the Vanderbijlpark student properties, combined with an increase in occupancies across the balance of the portfolio.
Operating profit was 7.9% higher at R120.71m. Diluted headline earnings per share was 4.6% lower at 21.76 cents.
No interim dividend would be paid in terms of the SA Corporate acquisition proposal, but a “clean-out dividend would be declared prior to the scheme being implemented”, the board said.
“The improvement in residential portfolio occupancies (from 89.7% in March 2022 to 94% in March 2023), the turnaround in the student portfolio occupancies (from 43% in March 2022 to over 98%), good collection numbers, low bad debt write-offs, and a good performances from all other departments enabled the growth target to be exceeded, the board said.
“Local councils remain a risk to various aspects of the company’s performance with above-inflation increases, lack of service delivery especially in the inner city, and lack of improvement in billing accuracy and resolving billing problems.
“Despite the environment remaining challenging, vacancies are improving and collections are stable. The company anticipates increasing rentals in line with inflation towards year-end,” it said.
BUSINESS REPORT