INTERIM RESULTS

TO END MARCH 2020

20 MAY 2020

We were on track before lockdown

Environment changed dramatically – guidance withdrawn, interim dividend declaration postponed

Operations & initial collections good

Balance sheet and cash position in good shape

Our priority: safety of staff and tenants, protect company and all stakeholders

We have good tenants that want to stay and pay, they just do not have money at the moment

INCOME6 MONTHS

31 MARCH 2020

YEAR ENDED

31 MARCH 2019VARIANCE

Contractual revenue 275 342 138 265 246 288 3,8%

Net property expenses (94 869 201) (85 779 777) 10,6%

Net property income 180 472 937 179 466 511 0,6%

Administration costs (13 054 029) (9 863 929)

Net finance charges (66 404 218) (49 125 381)

Interest on loan shares

(equal to 'dividend declared')8 125 078 -

Distributable income 109 139 768 120 477 201 -9,4%

Average number of shares in issue 319 356 701 321 351 669

Net expense ratio 34,5% 32,3%

Dividend per share 34,17 37,49 -8,8%

DISTRIBUTABLE

PROPERTY% CONTRACTUAL REVENUE % EXPENDITURE

Gross municipal 26,7 48,9%

Building expenses 8,2 15,0%

Repairs & maintenance 3,3 6,0%

Collection commission 6,4 11,7%

Security 4,8 8,8%

Bad debts 1,0 1,8%

Legal expenses 0,4 0,7%

BC levies 2,8 5,1%

Other property expenses 1,1 2,0%

54,7 100,0%

Less recoveries 20,2

Net property expense ratio 34,5

EXPENSE BREAKDOWN

MUNICIPAL

Electricity

42,1%

21,5%Water

Rates & Taxes

15,5%

15,4%Sewerage

Waste Removal

4,2%

1,3%Gas

PR

IOR

YE

AR

41,4%

22,9%

15,8%

13,7%

5,1%

1,1%

PR

IOR

YE

AR

Municipal

Expenses

48,9%of total

50,2%

80%

79%Recovered

excluding rates

EXPENSES

5 000

4 000

3 000

2 000

1 000

0

Inner City Non-Inner City Total

R 3 915

R 4 712R 4 386

Average

Escalation

v Mar ‘19

(1,3%)

Average

Escalation

v Mar ‘19

1,3%

Average

Escalation

v Mar ‘19

0,4%

ESCALATIONS

INNER CITY NON-INNER CITY OVERALL

AVERAGE

RENTALS

ESCALATIONS

V SEPTEMBER

AVERAGE

RENTALS

ESCALATIONS

V SEPTEMBER

AVERAGE

RENTALS

ESCALATIONS

V SEPTEMBER

ROOMS R 1 810 -0,70% R 1 686 4,20% R 1 723 2,70%

BACHELORS R 2 695 -1,40% R 3 561 2,00% R 2 581 0,30%

1 BED R 3 717 -1,00% R 4 441 0,50% R 4 111 -0,10%

2 BED R 4 598 -2,20% R 5 263 1,40% R 5 066 0,60%

3 BED R 5 155 -0,20% R 7 077 0,70% R 5 874 0,20%

4 BED R 6 031 -1,30% R 11 810 0,10% R 6 881 -1,00%

RENTALS, INNER AND NON-INNER CITY

ARREARS AND BAD DEBTS

2020 2019 2018

MARCH SEPTEMBER MARCH SEPTEMBER

Bad debts &

provisions1,1% 1,0% 0,6% 1,8%

1,2%Arrears 0,9% 0,6% 0,4%

Total 2,0% 1,6% 1,8% 2,2%

I have never been so involved in our tenants personal lives and finances

Credit Controller

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

Day 2

Day 4

Day 6

Day 8

Day 1

0

Day 1

2

Day 1

4

Day 1

6

Day 1

8

Day 2

0

Day 2

2

MARCH APRIL MAY

Day 2

Day 4

Day 6

Day 8

Day 1

0

Day 1

2

Day 1

4

Day 1

6

Day 1

8

Day 2

0

Day 2

2

Day 2

Day 4

Day 6

Day 8

Day 1

0

Day 1

2

Day 1

4

Day 1

6

Day 1

8

Day 2

0

Day 2

2

2020 TOTAL 2019 TOTAL APRIL 2020 TOTAL

COLLECTIONS % TOTAL

BALANCE SHEETR

6 MONTHS ENDED

31 March 2020

YEAR ENDED

30 September 2019

Investment property 4 137 056 088 4 175 006 452

Property loan receivable 39 501 514 44 767 070

4 176 557 602 4 219 773 522

Stakeholders’ interest 2 766 212 486 2 901 930 111

Secured financial liabilities 1 496 641 496 1 480 005 758

Shares in issue 319 356 701 321 351 671

Net asset value (cents) 866,18 903,04

Loan to value ratio 34,7% 33,6%

EXTRACT

LOANSLTV 34,7%

Total debt R1,5 billion

Available facilities R93 million

Percentage of drawn down debt hedged 67%

Weighted average cost of debt 8,99%

Cash on hand R23 million

AND GEARING

LOANSEXPIRY

FINANCIAL MATURITY STANDARD BANK ABSA/INVESTEC

YEAR MONTH DRAWN AVAILABLE DRAWN AVAILABLE

September 2020 September 2020 160 000 000 40 000 000

September 2021 April 2021 732 500 000 53 300 000

September 2023 October 2022 604 300 000 -

160 000 000 40 000 000 1 336 800 000 53 300 000

903,04 896,42866,18

40,76 11,036,07 13,33

31,63

2,71

500

550

600

650

700

750

800

850

900

950

1000

NAV –

30 SEPT 2019

NET ASSET VALUEPER SHARE (CENTS)

2,71

Distributable

income

6 months

ended

31 Mar 2020

Share

buyback

Dividends paid

6 months

ended

30 Sept 2019

NAV –

pre

revaluations

Fair value

Derivatives Loans

NAV –

2020Investment

property

Own

9 668 units

Retail

18 834 m2

UNITS

1%Bloemfontein

1,4%vacancy

10%Pretoria

3,1%vacancy

79%JHB

5,7%vacancy

5%Vanderbijl

0%vacancy

1%Durban

10%vacancy

5%Emalahleni

1,8%vacancy

The vast majority of our tenants are good people who want to do the right thing

UNIT LOCATION AND VACANCY RATE

5%JHB South

And Soweto

4,9%vacancy

11%JHB

West Rand

6,0%vacancy

34%JHB Inner

City

4,4%vacancy

5%Vanderbijl

0%vacancy

23%JHB East

9,1%vacancy

6%JHB North

7,2%vacancy5%

JHB CBD

Periphery

8,5%vacancy

11%PTA

Midrand

3,1%vacancy

INFO

RESIDENTIAL UNIT TYPES UNITS % OF TOTAL VACANCIES

Bachelors/rooms 2 165 22 8,8%

1 Beds 1 990 20 6,0%

2 Beds 4 522 47 4,2%

3 Beds 830 9 2,9%

Other 161 2 4,3%

Total 9 668 100 5,5%

TO

TA

L R

ES

IDE

NT

IAL

UN

ITS

TO

TA

L R

ETA

IL m

2

TO

TA

L B

UIL

DIN

GS

PROVINCIALVACANCY RATE

Indluplace 5,5%

DISPOSALSFactors considered include number of units, condition, forecast performance and location

LOCATION

AVERAGE NUMBER OF UNITS PER PROPERTY

NUMBER OF PROPERTIES AGREED BUT NOT TRANSFERRED

NUMBER OF PROPERTIES TRANSFERRED SINCE YEAR END

Mainly

South of Johannesburg

13

13

8

SM

AL

L P

RO

PE

RT

IES

Discussions underway to dispose of student buildings in Vanderbijlpark

ST

UD

EN

TStudent Residence

Trifecta is situated in Durban and lets

to individual students

Disposal price R20 000 000

TR

IFE

CTA

COVID-19

RESPONSE

RAPID ADAPTION

GOOD TENANTS / DIFFICULT TIMES

SITE OPERATIONS

SMME SUPPORT & ECOSYSTEM

Head Office | Property Managers | Site Staff | Tenants

Sensitive collections process (Rehabilitation vs Vacancies)

Payment Holiday (6-month repayment terms)

Tenant by tenant engagement | Deposits

PPE Compliance

Protection of staff and tenants

Housing of security and building staff

Expedited payments to SMME’s

Support SMME suppliers (security, cleaning, contractors etc)

Continues Municipal payments

We have grown to understand more and more in this time that we deal with real people’s lives and

they have real struggles under lockdown

COVID-19

RESPONSE

INCREASED COMMUNICATION

LEASING FRUSTRATIONS

PROPERTY MANAGERS

ASSISTANCE WHERE POSSIBLE & APPROPRIATE

Tenants | Staff | Property managers

Continually changing rules to lockdown levels

Rates of adoption and readiness

Different processes and structures

Good over all response

Food parcels to families in need

Site and security staff

Outsourced to seven Specialist Managers

PROPERTY MANAGEMENT

ON THE EFFECTS OF LOCKDOWN

NEGATIVESIncreased arrears and bad debts - Some tenants affected financially by employers

having to suspend their operations and not able to continue paying salaries /

small entrepreneurs that are not able to operate

Credit control – having to soften our approach with those actually affected while

remaining firm with those that can pay and wanting to take advantage

Tendency to form groups to try and create distance between individual tenants

and property managers

Individuals’ difficulty in obtaining documentation confirming impact of lockdown

Letting activity stopped for April and limited for May

NEGATIVESLimited ability to move struggling tenants to more affordable units

Difficult to vacate non-paying tenants

Competitor landlords offers to tenants; commercial negotiations in the public eye

No evictions currently

Fast changing lockdown rules and unclear regulations

POSITIVESIndluplace is focused on providing homes for working families and therefore playing a vital role in lockdown (staying at home)

Basic need for accommodation during lockdown

Indluplace occupation going into lockdown at best levels for years

Paying rent still priority for most tenants with most deposits still intact

Most tenants thus far able to pay (employed in industries able to operate / pay salaries) although seeing more pressure building

Building operations close to normal (BMs, cleaners live in)

POSITIVESGood adherence to strict lockdown regulations with very few negative incidents

Indluplace team working well remotely and coming up with creative solutions as problems come up

Systems robust e.g. cloud based financial system

Moved even closer to our property managers and their operations

Increased communications with internal team, property managers exec team, funders and other stakeholders

Fast tracking some processes that were underway pre-lockdown

Student head leases stability and good working relationships with NWU and VUT

Reduction in prime rate

On-going support for CIDs, targeted assistance where there is basic need (in our area of operation)

Support SMMEs, protect jobs, keep tenants and staff safe

Time for creative solutions and quick reactions - outsourced model therefore we have collective experience of seven teams of the best in the business

POSITIVES

We have to adapt and respond quickly with solid information. What happened to Skype?

Said during a Zoom meeting

I am worried that we will be feeling the impact of the lockdown for many months to come

Management company owner

Longer lockdown and slower opening than expected

Regulations sometimes confusing but being adapted

“Tail” probably longer than hoped

No opportunity for rental increases this year

FOR THE REMAINDER OF 2020

Difficult to predict even short term

Court backlog after lockdown

Cashflows and balance sheet (LTV) strong

Valuations will be under pressure for everyone

Vacancy increase potential in short term

Council increases

The demand for

value for

money,

professionally

managed rental

residential

buildings

offering a

diversity of unit

types, buildings,

locations and

rentals and

contributing

positively to the

areas of

operation,

remains strong.