Pre-close investor update
INDLUPLACE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2013/226082/06)
JSE share code: ILU ISIN: ZAE000201125
(Approved as a REIT by the JSE)
(“Indluplace” or “the company”)
PRE-CLOSE INVESTOR UPDATE
Shareholders are advised that Indluplace will be hosting a pre-close conference call with investors on
Monday, 16 March 2020 at 10:30 to provide an update in respect of the six months ended March 2020.
Interested parties may register to be part of the conference call at https://www.diamondpass.net/7947356.
The voluntary update will focus on the following items:
Prevailing economic conditions remain extremely difficult, with customers under financial pressure and
competition for tenants intense among landlords. The Indluplace portfolio has however performed in line
with our expectations and we confirm our guidance as set out at the beginning of the financial year.
Vacancies and credit control
We expect vacancies for the first half of the financial year to be better than the same period last year.
Currently the portfolio is 94% occupied (Feb 2019: 91%) and although this improvement has been achieved
through incurring increased letting costs, the benefits of having improved occupancy within the portfolio
will outweigh these costs. The letting performance at Highveld View, Emalahleni, is particularly
encouraging with our marketing initiatives having been successful. This resulted in the complex currently
being over 95% occupied (Feb 2019: 33%) by individual tenants. Approximately one third of our portfolio is
located in the Johannesburg inner-city and despite a substantial increase in the supply of rental units since
the end of 2019, our inner-city portfolio has remained stable.
Total portfolio bad debts and arrears numbers remain under control as per our expectations and in line with
previous comparable periods.
Escalations / top line growth
Indluplace’s ability to attract new, quality tenants and retain existing tenants is displayed by the
satisfactory occupancy figures. Despite our successful focus on tenant retention, escalating utility charges
and broader economic pressures endured by our customers make substantial rental escalations impossible at
Sales, capital allocation and gearing
We continue to implement our strategy of disposing of small, non-core properties, student buildings and to
reduce any reliance on head leases. We have sold or agreed sale terms in respect of 27 properties (average
13 units) mainly in the south of Johannesburg and the Trifecta student accommodation building in Durban.
We anticipate that the property transfers will be completed by mid-2020. The proceeds of these sales of
approximately R69 million will be principally applied to reduce bank debt and to fund our capital
expenditure programme. The process of identifying and disposing of non-core properties continues.
We remain committed to keeping our current loan to value ratio of 36% stable and our balance sheet strong.
We have engaged our funders to re-finance loans coming up for renewal in September and October 2020.
The information on which this investor update has been based has not been reviewed or reported on by the
13 March 2020
Date: 13-03-2020 07:05:00
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