Attacq, the JSE-listed REIT and strategic development partner of Waterfall City, has reported a sector-leading 19% increase in full-year dividend to 69 cents a share, with distributable income per share rising by 19.9% to 86.2 cents.
The share price rose 6.33% on the JSE to R12.60 by yesterday afternoon after briefly touching a three-year high of R12.99 earlier in the day, indicating that investors viewed the results favourably.
Operations were sound, with the occupancy rate at 92.8% and collection rates high at 100.2%. In the results for the year to June 30, the performance was attributed to a strong long-term strategy and consistent execution against it.
CEO Jackie van Niekerk said in an interview they had achieved strong growth in distributable income due in part also to deals that converted “lazy capital assets into productive ones”, and which also led to lower finance costs.
Next year’s distributable income per share guidance was similarly strong at between 17% and 20%, with a dividend payout ratio maintained at 80%.
Key deals over the year included the R2.7 billion Waterfall City transaction, completed in October 2023, where the Government Employee Pension Fund acquired a 30% stake in Attacq Waterfall Investment Company. This partnership provided additional capital and helped the ongoing development of Waterfall, said Van Niekerk.
A minority investment in MAS PLC was exited and proceeds were used to acquire the remaining 20% of Mall of Africa that the group did not own.
“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,” said Van Niekerk.
During the year, 5.4 million Attacq shares were bought back at an average of R9.35. In addition, a further 25% stake was acquired in Waterfall Junction, a new logistics precinct, in which the group now owns 50%. Van Niekerk said there was much interest in Waterfall Junction from potential clients and key infrastructure-related consents had been approved.
CFO Raj Nana said in addition to the 19.9% growth in distributable income per share, the balance sheet was strengthened – gearing of 25.4% provided the ability to capture the growth from the development pipeline, which included Waterfall Junction.
Post year-end, Attacq also entered into a sale agreement to sell all of its Rest of Africa retail investments.
“The next phase is to enter the debt capital markets with a listed, rated domestic medium-term note programme, for which we are targeting the second quarter of 2025, and this is supported by our recent credit rating of A+ [ZA] by credit rating agency GCR.”
Van Niekerk said they had seen the success achieved by other REITS in raising capital this way, and with Attacq’s balance sheet much strengthened, this represented a cheaper way to obtain debt.
The group’s developments under construction would cost R1.7bn, and amounted to an approved pipeline of 43 766 square metres of gross lettable area (GLA) at Waterfall City.
Van Niekerk said Waterfall City remained a premier destination for work, living, and play in the heart of Gauteng, strategically located within South Africa. On June 30, 2024, the group held 1 116 723 square metres (2023: 860 655 square metres) of effective development rights after increasing its investment in Waterfall Junction from 23.57% to 50%.
She said Mall of Africa continued to surpass expectations as a retail, entertainment, and dining destination for a diverse customer base, although trade slowed slightly through the shorter Gauteng winter.
Vacancies at Mall of Africa were low at 1%, she said. In addition, there had been an increase in demand for the collaboration hub spaces, leading to growth in market rentals, particularly in Waterfall City and the Lynnwood Bridge precinct.
She said they expected that trade would improve even further due to expectations of interest rate cuts. Next year’s distributable income per share guidance was similarly strong growth of between 17% and 20%, with a dividend payout ratio of 80%.
BUSINESS REPORT