September 10 2024 21:45
SOUTH AFRICA
JSE-listed real estate investment trust (Reit) Attacq, which owns Mall of Africa and numerous other assets in Waterfall City and SA, saw its share price close 6.33% higher at R12.60 on Tuesday. The group’s financial results for the year to end-June 2024 pleased investors who have seen the company rationalise its portfolio, exiting Europe through the sale of its stake in landlord MAS Real Estate and acquiring the 20% of Mall of Africa which it did not own before. This shopping centre is the largest built in one phase on the continent. It is Attacq’s flagship asset.
MAS Real Estate’s dependence on developer, JV partner and investor PKM for growth forced it to unexpectedly suspend its 2023 dividend as the interest rate cycle has turned, it said in 2023.
Attacq’s distribution per share rose 19% to 69 cents per share based on a 80% payout ratio. Its distributable income per share had climbed 19.9% to 86.2 cents per share.
Attacq’s occupancy rate rose to 92.8% and collection rates were high at 100.2%. The group maintained its focus on being a client-focused, innovative, and trusted real estate business, prioritising client needs and satisfaction in its operations, CEO Jackie van Niekerk said.
“This financial year, we concentrated on executing against our strategy, which included concluding key deals over this period. We achieved a significant milestone with the R2.7bn Waterfall City transaction, completed in October 2023. In this deal, the South African Government Employees Pension Fund (GEPF) acquired a 30% stake in Attacq Waterfall Investment Company (AWIC). This strategic partnership provides additional capital, facilitating the ongoing development of Waterfall City,” said van Niekerk.
“Mall of Africa is a key asset, which we now own, control and manage 100% of, with continued high growth potential as an anchor to the growing Waterfall City precinct. During this financial year, we repurchased 5.4- million Attacq shares, an average of R9.35. Our dealmaking extended to a further 25% acquisition in Waterfall Junction, an excellently located new logistics precinct in which we now own 50%, with an effective share of 313 791m2,” said van Niekerk.
Attacq’s retail executive head Michael Clampett said vacancies at Mall of Africa were below 1%.
At the end of June, the vacancy factor had been 1.2%.
“You know, on a weekly basis, I get a phone call that gets escalated to me because the centre management team can’t help someone and that gives us a little bit of pricing power because, you know, if 250 square metres becomes available, we need to make a deal and we need to make it quickly so frm that perspective, I think we’re in a very fortunate position,” he said.
Raj Nana, Attacq CFO, said Attacq’s balance sheet was in a healthy position: “On all reported metrics, the group performed exceptionally well. In addition to the 19.9% growth in distributable income per share, our balance sheet was further strengthened, gearing of 25.4% and an interest cover of 2.31x provides us with the ability to capture the growth from our development pipeline, which includes Waterfall Junction that has had strong enquiries despite not yet launching the development”.
MAS has developments under construction and an approved pipeline totalling 43 766m2 of gross lettable area (GLA) at Waterfall City, which will cost R1.7bn.
Attacq’s retail portfolio has avhieved a 12-month weighted average trading density increase of 5.8%. Mall of Africa, valued at R6bn, served as a retail, entertainment, and dining destination for a diverse customer base. In addition, there has been an increase in demand for the collaboration hub spaces, leading to growth in market rentals, particularly in Waterfall City and the Lynwood Bridge precinct.
The group announced that next year’s distributable income per share guidance is growth of between 17% and 20%, with a dividend payout ratio of 80%.
Attacq was recently recognised in the industry, winning the Sapoa (South African Property Owners Association) Property Development Award for Innovative Excellence in the Industrial Development category.
“At the heart of our business is the commitment to creating a positive impact in our spaces and communities and continuing to generate sustainable value for all stakeholders. I am proud of the results we delivered and our constant aim to solve client and shopper needs through innovation,” said Van Niekerk.
alistair@propertyflash.co.za
