Indluplace internalises its admin

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Indluplace internalises its admin

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Published Date: 2021-09-28 | Source: INCE|Community | Author: The Finance Ghost

Indluplace internalises its admin

The residential-focused REIT released an operational update dealing with several important matters.

First up was the internalisation of the property management function. Some portfolios were previously managed externally by outsourced property managers. In May, the company began a process of taking these over in an internal property management function that sufficiently staffed to manage over 9,000 residential units and 17,000sqm of retail space.

My head hurts just thinking about the admin.

Building-based staff were absorbed into the new management company and the head office team was recruited from the market. The benefits of the internationalisation "will become apparent over the next few years" - so shareholders shouldn't expect any immediate benefits.

The company also gave an update on the average monthly vacancy rate, which is expected to be under 12% for the 2021 financial year. That's well up on the 7.4% average rate in FY20, but the company says that the recent vacancy trends indicate that the market is strengthening.

The collection rate is expected to be slightly higher than last year's rate of 96% and bad debts are in line with expectations for the year, representing an improvement on the prior year's 3.9%.

The fund is rationalising its portfolio, with disposals of 21 properties for R72.5m already completed and a further R94m sold but not yet transferred. A further R400m remains unsold, comprising of six properties including the student portfolio.

The company has guided that the dividend for 2021 is expected to be lower than the comparable period. The full-year results will be released around 17th November 2021.





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