Resi Investment Group invests in residential apartments and housing units for rental and capital growth.
The investments are located in desirable residential nodes with financially stable tenants. There is also a small trading component to the business. All investments are currently located in the Western Cape but geographic diversification is likely to occur over time. The group has recently completed its first full greenfields development in conjunction with other investment partners. The total number of housing units owned is currently 693.
Resi’s core focus continues to be the investment in residential properties with long-term rental income profiles. While there has been a slowdown in residential property acquisitions, we have entered into a joint venture partnership that purchased 126 newly developed residential property units in Sanddrift, Cape Town. These were completed and transferred at the end of October 2016.
These developments are expected to be both yield enhancing and add capital growth to the portfolio in the long term. Resi contributed R12.8 million (2015: R61.1 million) to group profits. The main reason for the large decrease in earnings is due to fair value adjustments being recognised in the prior year in respect of inventory that was reclassified to investment property. Even though the residential market may be slowing down we are always investigating opportunities to grow this business and make acquisitions that meet our investment criteria