CAPE TOWN – INDLUPLACE Properties’ share price fell 5.3 percent yesterday after it said the dividend for the six months to March 31 would be deferred until year-end due to the unpredictable economic environment.
The R3.60 that the real estate investment trust traded at was well up on the R2.54 traded at a year ago, but the price was still substantially lower than the R9.99 that it traded at three years ago this time.
The company has been listed on the JSE Main Board for five years.
The group, which has a R3.8 billion portfolio of 9 582 affordable residential units and 18 834 square metres of retail space, saw revenue decline 12 percent to R294.22 million in the six months period.
The vacancy of 11.4 percent at March 31 was more than double that for the same period in the prior year, as tenants struggled with the economic after effects of Covid-19.
“While our portfolio has performed well in the competitive environment, until such time as the economy recovers, we expect vacancies and escalations to remain comparable with the current period,” the group said.
Property operating costs increased to R157.5m from R153.9m due mainly to increased provisions for doubtful debts, legal fees, and repairs and maintenance as a result of the increased churn in the portfolio.
There was 18.45 cents per share available to pay a dividend, based on a 100 percent payout, versus 31.17c last year this time, but the group needed to retain capital and protect its balance sheet due to the rapidly changing environment, lack of predictability and difficulty in estimating the overall impact of the pandemic on future performance.
“While our diverse portfolio provided some protection, last year’s events had a marked impact on our tenants, their ability to pay and the competition to attract good quality tenants.”
No meaningful comparison could be made between the results for the six months ended March 31, 2021, and those for the corresponding period in 2020.
“At the implementation of the lockdown in March 2020, our tenants and business were in a much sounder position. During the current six-month period our tenants continued to struggle in a deteriorating environment,” the group said.
Subsequently, collections had remained high at 95.2 percent, vacancies were stable and tenant turnover continued. Loan-to-value was at 38.4 percent.
“The expected improvement has not materialised.
“Indluplace will continue to focus on ensuring its properties and service results in being able to attract good quality tenants,” it said.
The internalisation of the property management of the first tranche of its properties took place on May 1.
Indluplace share price closed 6.32 percent lower at R3.56 on the JSE yesterday.