Attacq all set to list on JSE with R12.5 billion portfolio

Attacq Limited CEO Morne Wilken said Attacq aimed to raise up to R800 million through a private placement prior to listing on JSE.

Attacq Limited, formerly called Atterbury Investment Holdings, on Thursday announced plans to list its R12.5 billion property portfolio on the JSE in October following a private placement that aims to raise R800 million.

Morne Wilken, Attacq CEO said yesterday that the listing would create a foundation to grow the business further by enabling it to access capital efficiently, raise its profile, create more liquidity for its shareholders and expand its investor base, all of which should enhance its prospects.

Over the last eight years, the company has delivered an average compound annual return in excess of 20% to its shareholders.

Attacq has opted not to list as a Real Estate Investment Trust (Reit) given that it is a capital growth fund whereby its income is reinvested and not paid out to shareholders, as is the norm across the sector.

The Reit structure, which most listed property funds have already or are converting to, requires funds to pay out at least 75% of their distributable earnings to shareholders.

Subject to regulatory approvals, Attacq is anticipated to come to market on 14 October 2013.

Investment in Attacq will be made available by private placement which aims to raise up to R800 million at a price per share determined by the book build, managed by Java Capital. The private placement is expected to open on Monday, 7 October and close midday on Wednesday, 9 October 2013. Besides raising equity, the private placement is also designed to increase the spread of shareholders for Attacq.

Attacq’s assets comprise two focus areas: investments and developments. Its portfolio strategy is to hold 65% investments and 35% developments to optimise long-term sustainable capital growth, enhance total returns to shareholders and mitigate risk.

Attacq’s asset base of R12,5 billion at March 2013 includes landmark commercial and retail assets and developments. Among its developments is the prime Waterfall Business Estate, located between the Allandale and Woodmead off-ramps on both sides of the M1/N1 highway in Johannesburg.

Waterfall is an infill development between Johannesburg and Pretoria. The business estate measures approximately 311ha and 1.73 million square metres of developable bulk has been approved to date. 

This includes the 116,000m² Mall of Africa super-regional shopping centre is being developed in the heart of Waterfall City. The development of Waterfall Business Estate is market driven and will be rolled out over the next 10 to 15 years. Projects coming to completion in the current year include the 44,200sqm Cell C campus and the 23,000sqm new Group 5 head office.

Attacq’s South African property investments are diversified across office, retail, mixed-use, industrial and hotel properties. It is also geographically diversified in three regions in South Africa, in the provinces of Gauteng, Western Cape and North West.

Its local assets include Lynnwood Bridge, Brooklyn Bridge, Club 1 and Glenfair Boulevard, all in Pretoria, Woodmead North Office Park in Waterfall and Garden Route Mall in George. Attacq holds 81.95% of Attacq Retail Fund. This fund is invested in retail properties including Mooirivier Mall in Potchefstroom, Eikestad Mall in Stellenbosch and 25% of Brooklyn Mall in Pretoria.

The company’s African portfolio includes Bagatelle Mall of Mauritius and Bagatelle Offices. It also has an effective 32,5% stake in Atterbury Africa, in partnership with Hyprop Investments and Atterbury Property Holdings, which invests in retail centres and developments across sub-Saharan Africa.

It is also internationally diversified through MAS which has a primary listing on the Euro-MTF market of the Luxembourg Stock Exchange and a secondary listing on the JSE AltX. MAS holds investments in Germany, Switzerland and the UK.

Mr Wilken said the company’s long-term strategy was to have 70% of its asset base by value in South Africa, 20% in the rest of Africa, and 10% offshore.

Andrew Brooking of Java Capital said Attacq was expected to "substantially outperform" other listed Reits, which were no longer being fuelled by declining bond and interest rate yields.

Coronation fund manager Anton de Goede said as Attacq was not a traditional yield-producing property investment, "one should just have a different approach in valuing the company".

Investment decisions should be based on net asset value (NAV) and potential NAV growth, as was the investment case for London-focused Capital & Counties Properties (Capco), Mr de Goede said.

Capco, which has a listing on the JSE, has driven its share price through growing the value of its assets via developments and asset management strategies.

"Like we do with any other listing, we will go through the details and decide whether we want to invest or not — but Attacq does provide a different angle, which is an interesting one, and management has proven itself in creating value over the past few years through its development pipeline."

Mr de Goede said investors could reasonably expect that "value creation should continue going forward".

Attacq’s executive team comprises Wilken as CEO, Atterbury Property Holdings CEO and co-founder Louis van der Watt and Melt Hamman as FD. Attacq’s independent non-executive chairman is Pierre Tredoux, who has served on Attacq’s Board of Directors for the past six years. Attacq’s board also benefits from the skill and experience of Atterbury Property Holdings co-founder Francois van Niekerk, as a non-executive director.