Indluplace Properties the first Residential REIT to list on JSE

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Commenting on the JSE listing, Indluplace Properties CEO Gerald Leissner says the residential property fund provides a diversification opportunity for traditional property investors and should attract new investors to the listed property sector. Commenting on the JSE listing, Indluplace Properties CEO Gerald Leissner says the residential property fund provides a diversification opportunity for traditional property investors and should attract new investors to the listed property sector.

South Africa’s first specialised listed property fund invested exclusively in residential, Indluplace Properties Limited (JSE: ILU), on friday listed on the JSE.

The fund has a portfolio valued at R1.6 billion consisting of 95 properties and over 3 600 individual units.

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

The share price increased by 5% to R10.50 per share shortly after the 9:00 AM listing. Indluplace will be the first residential focussed REIT listed on the JSE. “Indlu” is the Zulu word for “house”.

South African listed residential property currently makes up only 2% of the total listed property market. Indluplace intends to invest in residential rental properties within the affordable and student housing market where it believes a demand exists.

Indluplace CEO, Gerald Leissner comments: “being the first listed focussed residential property fund, provides a diversification opportunity for traditional property investors and should attract new investors to the listed property sector. South Africa has strong demand for affordable rental housing and this translates to 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”

Donna Oosthuyse, Director Capital Markets at the JSE, explains the significance of Indluplace’s listing: “Since we introduced the Real Estate Investment Trusts (REITS) structure in 2013, we have seen an increase in the number of REITS listing on the exchange, with the number moving from seven in April 2013 to 32 today. 

"This is a combination of new listings and companies that changed status from Real Estate Investment & Services to the new REIT structure.  As the first residential REIT to list on the exchange, Indluplace demonstrates that the REITS structure provides companies with opportunities to diversify their property assets, generate income and be exempt from capital gains tax,” she said.

The listing followed a successful private placement of up to 40 million shares in the company for an issue price of R10 per share. Through the capital raised, Indluplace intends to grow its portfolio by acquiring yield-enhancing properties hoped to generate income soon after acquisition.

Indluplace Properties is a wholly owned subsidiary of Arrowhead Properties.

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Listed Property / REITs  |  Arrowhead Properties  |  Gerald Leissner  |  Johannesburg Stock Exchange (JSE)  |  Indluplace Properties  |  Donna Oosthuyse  |  Real Estate Investment Trusts (REITs)