Residential landlord Indluplace Properties grew its dividend 5.6% in the year to September, meeting its guidance forecasts.

The first residential focused real estate investment trust (Reit) to list on the JSE remains a reliable income payer, delivering quarterly dividends, according to CEO Carel de Witt.

He said Indluplace’s board was considering changing the dividend policy to make six-monthly or annual payments to shareholders more comparable to Reits with similar schedules.

De Witt said the change would also help the company generate relatively higher dividend growth as the distributable earnings would sit longer in interest-earning accounts.

"Despite the current tough environment, Indluplace had a very good year, growing our diversified portfolio and proving to be a major player in providing value for money rental housing across location, building type and unit type across various income groups," said De Witt.

"We are very pleased to deliver dividend growth to shareholders in line with expectations, emphasising the defensive nature of our investment case," he said.

Indluplace’s investment property portfolio rose from R2.4bn to R2.9bn in the reporting period, mainly due to the R475m acquisition of Diluculo Properties, which comprises 1,319 residential units across eight properties.

Since year’s end, the fund acquired 2,803 residential units for R1.4bn from the Buffet Group. The portfolio comprises 48 properties, mainly in Gauteng, but with two buildings in KwaZulu-Natal.

Evan Robins of Old Mutual Investment Group said: "There were no nasties but the residential sector is not defying economic gravity. Distribution growth was at the bottom of their guidance, so rental growth may have been weaker than they hoped as vacancies were contained." Growth for the next year was "unexciting" with a wide guidance range between 4% to 7% for a simple fund.


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