REIT on theJSE. -...
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Transcript of REIT on theJSE. -...
• Indluplace invests in residential rental properties and is the only focused residential
REIT on the JSE.
• Strategy unchanged since listing in June 2015:
• to grow a diverse portfolio nationally,
• acquiring yield enhancing properties,
• specialised outsourced property management,
• low gearing levels, and
• paying growing, quarterly distributions.
STRATEGY
INVESTOR / FUND MANAGER
Arrowhead Properties Ltd
Visio Capital Management
Stanlib Asset Management
Investec Asset Management
Old Mutual Investment Group
Coronation Fund Managers
Catalyst Fund Managers
Sovereign Asset Management
Momentum Investments
Eskom Pension & Provident Investment Management
Absa Asset Management
% HOLDING AS AT 21 APRIL 2016
60,07
11,46
6,32
2,97
2,05
1,00
0,95
0,68
0,53
0,49
0,45
INVESTORS IN INDLUPLACE
FINANCIALS
Quarter 1 – 31 December 2015
Quarter 2 – 31 March 2016
Total for 6 months ended 31 March 2016
DIVIDENDS (CENTS PER SHARE)
22,93
23,07
46,00
DIVIDENDS
R
6 MONTHS ENDED
31 MARCH 2016
12 MONTHS ENDED
30 SEPTEMBER 2015
Contractual revenue 137 845 868 139 109 134
Net property expenses (33 305 548) (28 874 982)
Net property income 104 540 320 110 234 152
Administration costs (5 797 274) (4 105 869)
Net finance charges 7 919 497 (50 065 914)
Antecedent income 3 855 441 10 198 321
Distributable income 110 517 984 66 260 690
Net property expense ratio 24,2% 20,8%
INCOME STATEMENT
*
* Includes distribution to Arrowhead Properties pre listing
DIVIDEND BREAKDOWN
46,00 cents
for the
half year
DIVIDEND
OF
52 000
53 000
22,60
54 000
22,80R 0
00s
Quarterly dividend
55 00023,00
52 500
22,50
53 500
22,70
54 50022,90
55 500 23,10
56 000 23,20
30 September 2015 31 December 2015 31 March 2016
• Dividend for 1 month ended June 2015 was R12 million or 6,21 cents pershare
Rands
cents per share
VACANCIES AND ARREARS
• Vacancies at 31 March 2016 - 6,2% (30 September 2015 - 9,4%)
• Average vacancies over the 6 months ended 31 March 2016 – 3,2% (excluding Redwood)
• Bad debt and provisions for bad debt under 1% of revenue
• Tenant arrears of R0,9m at 31 March 2016
R
Unaudited for the 6 months
ended 31 March 2016
Audited year ended
30 September 2015
ASSETS
Non-current assets 2 382 936 624 1 887 250 990
Investment property 2 207 142 994 1 711 457 360
Loans to participants of Indulplace
Share Purchase and Option Scheme
175 793 630 175 793 630
Current assets 68 889 694 73 023 938
Total assets 2 451 826 318 1 960 274 928
EQUITY AND LIABILITIES
Shareholders interest 2 420 522 500 1 934 848 508
Other non current liabilities - -
Bank and shareholder loans - -
Current liabilities 31 303 818 25 426 420
Total equity and liabilities 2 451 826 318 1 960 274 928
ABRIDGED STATEMENT OF
FINANCIAL POSITION
UNGEARED
PORTFOLIO
OPERATIONS
PROPERTY PORTFOLIO
OVERVIEW
30 Sept 2015
3 472
218
4 819
218
5 178
269
31 March 2016 Current0
2 000
4 000
Portfolio growth (units)
Residential units
Student units
6 000
1 000
3 000
5 000
UNIT TYPE(CURRENT)
11%
3% 6%
20%
16%44%
Rooms
Bachelor
1 Bed unit
2 Bed unit
3 Bed unit
› 3 Bed unit
Witbank
8%
Jhb suburbs Pta/MidrandJhb inner city
40%
38%
9%
Vanderbijlpark
5%
UNIT SPREAD(CURRENT)
• Indluplace owned 109 properties with 5 037 residential and student units at
31 March 2016.
• Rental income from student properties contributes less than 10% of total rental income.
• Retail associated with the residential buildings increased from 9 469m2 to 12 647m2
by end of H1.
• Property management by outsourced specialist property managers:
• Mafadi – Jhb inner city and various Jhb suburbs (Germiston, Roodepoort, Honeydew, Yeoville)
• Citiq – Jhb inner city and various Jhb suburbs (Yeoville, Rosettenville, Randburg, Benoni)
• Prime – Roodepoort, Fourways, Springs
• Amorispan – Vanderbijlpark
• CSI – Witbank
PROPERTY PORTFOLIO
OVERVIEW
• The “Connaught portfolio” consist of 9 highrise buildings in the inner city of
Johannesburg comprising 1 181 units and 3 178m2 street level shops and kiosks.
• The “Prime portfolio” consist of 3 suburban townhouse complexes located in Florida,
Springs and Fourways comprising 166 units.
• Both portfolios have recorded average monthly vacancies of 5 units (of 1 347) and
average monthly arrears of below 0,5% from acquisition to end of March 2016.
ACQUISITIONS
of R500m
PROPERTY
GROWTH
CONNAUGHT PORTFOLIO
PRIME PORTFOLIO
PRIME PORTFOLIO
TOP TEN
BUILDINGS BY VALUE
BUILDING VALUER’000
Highveld View 310 000
Kings Ransom 117 000
Sentinel 109 000
Park Village 94 300
Protea Glen 73 900
Balnagask 64 200
Redwood 67 802
Golden Views 62 900
Matroosberg 56 250
Bree Street block 60 000
1 015 352
HONEY PARK
HONEY PARK
LETTING PROGRESS
• Three complexes, Ironwood, Rosewood and Redwood consisting of 333 two
bedroom units.
• Previously let on a head lease the last two complexes were handed back in
December 2015.
• Letting strategy is to market to families (although a few students returned).
• Strong demand for the units at rentals of R4 900 to R5 100 per month.
TOTAL
COMPLEXover
80% let
PROSPECTS
WHY INDLUPLACE?
• Residential REITs are significant components of developed REIT markets
• Strong investor support for focussed residential REITs
• Provides diversification from commercial property
• October capital raise over subscribed – R470m, attracting new and existing investors
• Strong supply/demand fundamentals
• Increasing urbanisation
• Increasing size of the ‘GAP’ market (don’t qualify for housing grants but cannot access bond finance)
• Limited availability of well located fully serviced land
Substantial existing
portfolio that is
ungeared
Proven track record in
the residential sector
Proven ability to acquire
yield enhancing portfolios
WHY INDLUPLACE?
WHY INDLUPLACE?
Strongly incentivised
proven executive
management team with
significant residential
property experience
Experienced property
management teams
with knowledge of each
portfolio
Strong independent
board with residential
property experience
• Since 31 March 2016 acquired properties of R141m (410 units).
• Total portfolio will be 5 447 units.
• Distribution for 12 months to 30 September 2016 of 92,55 cents.
PROSPECTS
• Executive directors
• Carel de Wit (CEO)
• Mark Kaplan
• Terry Kaplan (FD)
• Gerald Leissner
• Imraan Suleman
• Asset Manager
• Kevin Haswell
TEAM
QUESTIONS
THANK YOU
