• 54 Peter Place, Bryanston, Johannesburg

Transcend Residential Property Fund Limited was converted to a public company on 22 August 2016 and listed on the Alternate Exchange of the JSE Limited on 1 December 2016 in the Financial Services – Real Estate Investment Trust (Residential REITs) sector.

Transcend focuses on specialised residential property assets and currently holds a portfolio of 13 properties, comprising 2,472 units, located primarily in Gauteng, as well as the Western Cape and Mpumalanga, South Africa. These well-located properties are all stabilised, have track records of consistent and strong rental performance, and are strategic assets that we expect to achieve steady rental income growth and capital growth over time.

Market Segment

Transcend’s portfolio of residential properties were all completed within the past 6 years and are located within secure estates. These assets differ from conventional inner-city residential rental housing in that they are predominantly 2 and 3 storey walk-up apartments located in desirable and high demand neighbourhoods and are often equipped with lifestyle-enhancing facilities.

Transcend focuses on a defensive asset class, that delivers housing to a heavily underserviced portion of the real estate market with affordable rentals. Rentals in Transcend’s portfolio range from R3,000 to R7,000 which is the sweet spot for a growing middle class in South Africa’s urban centres. In South Africa, TPN reports that 80% of tenants rent for less than R7,000 per month with 85% of the tenants in good standing. Expansion into other housing market segments or African countries will be explored in time.

Ownership

Transcend has 100% direct ownership of the assets and majority ownership of units on all properties.

Acquisition Strategy

Transcend’s intention is to focus on acquiring defensive and yield-accretive lifestyle residential properties in nodes that offer superior growth and annuity rental income.

The current portfolio of 2472 residential units are quality, long-term, income-generating assets.

As the properties are less than 6 years old and are strategically located, they maintain a high underlying capital value, resulting in performance at lower rental yields than inner-city properties and also having greater potential for capital appreciation.

Relationship with IHS

Transcend has appointed IHS Asset Management (Pty) Limited, a wholly owned subsidiary of IHS, to perform the asset management function of the Company.

Since 2007, IHS has successfully invested and managed direct residential property investments:

  • Over 26 400 units/stands completed or under construction.
  • Sold over 18 200 units/stands.
  • Targeting lower to middle income “affordable ”market.
  • Unit prices range from R400,000 to R700,000.

IHS currently managed just over R4bn in assets across 3 Fund and has made investments in 44 real estate projects:

  • Currently operates a rental portfolio of approximately 7,200 units.
  • Properties located in 5 provinces in South Africa.

The Fund will also leverage off the experience and expertise of IHS Property Management in the day-to-day operations and management of the residential portfolio.

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