Indluplace becomes first residential-only Reit

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Indluplace lists on the JSE at R10 a share‚ becoming the first residential-only real estate investment trust in the listed property sector.

Indluplace on Friday listed on the JSE at R10 a share‚ becoming the first residential-only real estate investment trust (Reit) in the listed property sector.

This puts the company’s market capital at R1.76bn at listing. The share price rose by 5% to R10.50 shortly after the 9am listing.

The company‚ which has sprung out of Arrowhead Properties' residential portfolio‚ is run by interim CEO Gerald Leissner‚ who has about 50 years of experience in the property business.

Listed companies are chasing residential assets for the first time in years due to demand from a growing population for housing.

Arrowhead was the first mover in the new drive to bring residential property into listed funds‚ when it bought the Jika Properties portfolio in October 2013. Since then‚ South African Corporate Real Estate Fund and Redefine Properties have also bought residential assets.

Indluplace has a portfolio valued at about R1.6bn consisting of 95 properties and more than 3‚600 individual rental units. The 12-month forward yield from listing day is forecast at 8.2% and for the year ended September 30 2016 at 8.4%. Listed residential property comprises less than 2% of SA’s listed property market‚ compared with more than 13% in developed economies‚ illustrating the opportunity for significant growth in this sector.

“Indluplace‚ being the first listed residential property focused fund‚ provides a diversification opportunity for traditional property investors and should attract new investors to the listed property sector. SA has strong demand for affordable rental housing and this translates into low vacancies and consistent rental growth. The fund will aggressively acquire additional revenue-enhancing properties to generate growing income returns for shareholders. The fund has no debt on listing‚” Mr Leissner said.


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