Real Estate Investor Magazine South Africa July 2015 | Page 36

LISTED

First Residential REIT

Lists On JSE
Capitalising on strong demand
for affordable rental housing

I

ndluplace Properties is the first residential Real
Estate Investment Trust (REIT) to list on the
Johannesburg Stock Exchange ( JSE). ‘Indlu’, the
Zulu word for ‘house’, is a purely residential-focused
property fund with a portfolio consisting of 95
properties and over 3 600 individual units. It is valued
at R1.6 billion.
Chief Executive Officer (CEO) of Induplace
Properties, Gerald Leissner, is also CEO of Arrowhead
Properties. Arrowhead Properties was listed on the JSE
in December 2011. Two years ago in 2013, Arrowhead
Properties made a foray into residential property. It
is now the parent group of Indluplace which has a
separate residential property portfolio. He, along with
Imraan Suleman, are also Non-Executive Directors of
the Johannesburg Housing Company, which developed
social housing for more than 12 000 people in low to
middle income communities in Johannesburg’s inner
city.

“Listed residential property
comprises of less than 2% of South
Africa’s listed property market.”

“Indluplace, being the first residential-focused listed
property fund, provides a diversification opportunity
for traditional property investors and will attract new
investors to the listed property sector,” comments
Gerald Leissner, Indluplace CEO.
The company intends to invest in residential rental
properties within the affordable rental housing and
the student housing market where it believes a proven
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JULY 2015 SA Real Estate Investor

demand exists. This will generally be in larger urban
centres close to work opportunities and transport
infrastructure. There is currently a shortage of
affordable, well managed rental housing as evidenced
in the relatively low vacancy rates in this market.
Similarly good demand exists for affordable student
accommodation. The group aims to position itself as
an exit for developers or owners of residential stock or
portfolios.
“South Africa has a 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,” he adds.
Indluplace intends to grow its portfolio by acquiring
yield-enhancing properties and hopes to generate
income soon after acquisition.
“Listed residential property comprises of less than
2% of South Africa’s listed property market, compared
to over 13% in developed economies. We believe there
is opportunity for significant growth in this sector,” says
Imraan Suleman, Executive Director at Indluplace.
“As the first residential REIT to list on the
exchange, Indluplace demonstrates that the REIT
structure provides companies with opportunities to
diversify their property assets, generate income and be
exempt from capital gains tax,” says Donna Oosthuyse,
Director of Capital Mark