Attacq repositions to focus on Waterfall City and other local assets
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ATTACQ, the real estate investment trust, is repositioning out of the pandemic environment into a South Africa focused developer of premium precincts such as Waterfall City.
The group, which has Mall of Africa in its portfolio, reduced its investments in central and eastern Europe focused MAS to only a passively held 6.5 percent stake from about 20 percent in the year to June 30.
The group yesterday reported that distributable income fell 35.9 percent to 46.8 cents a share, largely due to no dividend from MAS, which had withheld dividends due to the effects of the pandemic in that region.
Attacq also passed the 2021 dividend to retain capital for new developments and to maintain long-term balance sheet strength. In addition, no guidance was provided for the 2022 year due to the uncertain Covid-19 and vaccine rollout environment.
Nevertheless, the group ended the year in a better position financially, with distributable income from local operations up by 22.5 percent, R2.8 billion of capital was recycled, largely to reduce Euro denominated debt which had since year-end been eliminated, and to improve the capital structure,
Liquidity improved to R1.7bn at year-end, of which about R1bn was in cash. Gearing reduced to 43.3 percent from 46.3 percent.
Operationally, the group traded well, with the South African real estate portfolio rental collection rate at 101.5 percent, and occupancy higher at 95.2 percent from 93.6 percent, with more improvement post-year-end.
In addition, five buildings were completed in Waterfall City with a further five under construction. The precinct continued to attract blue chip tenants seeking safe, sustainable, smart precincts, said chief executiver Jackie van Niekerk in a presentation.
Attacq’s South African portfolio consists of retail-experience hubs, collaboration hubs (office and mixeduse), logistics hubs, and hotels. Recent disposals of the Deloitte head office, Massbuild distribution centre and the Amrod building, were done at close to their valuation.
Van Niekerk said it had been another year of flux for the real estate sector, bringing a need for flexibility, forward-thinking and an imperative to understand client and customer challenges more deeply.
“It is our team’s ability to roll with the punches and adapt at a pace that has helped us to keep moving forward so steadily,” she said.
Van Niekerk said Attacq was well placed to weather an environment still being disrupted by the pandemic, technology innovations and shifting customer behaviours.
“The pandemic has seen a seismic shift in the need for connectedness in safe spaces and Attacq has responded by creating retail-experience hubs. Here, we provide an optimised client mix – a space where people connect and benefit from on-demand services, collection points, and loyalty rewards.”
The Mall of Africa completed its first five-year lease cycle at the end of April and management optimised the tenant-mix by introducing 20 new brands, including new-concept stores for HiFi Corporation and Clicks Baby, as well as Ted Baker, Hugo Red, and Nando’s, some of which were as a result of shopper requests.
Following the success of the luxury residential development, Ellipse Waterfall, Attacq launched The Mix, and sales for its apartments had surpassed expectations, despite being launched during Covid-19.
Post year-end, Attacq welcomed their first apartment residents to the city, following the transfer of 196 Ellipse Waterfall units.
Chief financial officer Raj Nana said their financial strategy, including debt reduction initiatives, would continue to improve gearing – a key strategic focus over the past 18 months.