Attacq exits MAS Plc with R773m stake sale

Attacq – the developer of Waterfall City In Johannesburg sold its remaining interest in Central and Eastern Europe (CEE) focused property group MAS Plc for R773 million

Waterfall City owner Attacq sold its remaining interest in Central and Eastern Europe (CEE) focused property group MAS Plc for R773 million, the group announced recently.

Attacq, the JSE-listed SA Real Estate Investment Trust (SA Reit) has sold its remaining 6.5% stake in fellow commercial property investor MAS to focus on assets it can have more influence on.

The R773 million from the stake sale will be used to fund various opportunities, including the development of projects like the Ellipse residential flagship project within the Waterfall City complex in northern Johannesburg. This project has received a substantial external capital injection, which has enabled the group to reduce its debt significantly.

Attacq, which has an SA investment portfolio worth R18.2 billion, about two thirds of which is made up of Waterfall, reported on Tuesday 12th March that distributable earnings rose 2.8% to 36.9c in its six months to end-December. But following its corporate activity, it's upped its guidance to between 10% and 12.5% growth for the full year, from 8% to 10% previously.

In October, Attacq executed a R2.7 billion transaction, selling 30% of the Waterfall Investment Company to the Government Employees' Pension Fund (GEPF).

The office complex at the Waterfall City plays host to numerous global blue-chip companies, including brands such as DP World, Eppendorf, Dell, Estee Lauder, Pfizer, Ericsson, Dimension Data and Accenture.

The GEPF's entry as a strategic partner provides "substantial capital" for the continued development of the area surrounding Waterfall City, including the prominent Mall of Africa. This partnership has also allowed Attacq to reduce its gearing significantly, from 37.3% to 25.3%, within a year. The proceeds from the sale have contributed to a decrease in interest-bearing debt, which has fallen from R8.4 billion to R5.9 billion.

In October, Attacq implemented a R2.7 billion transaction in which it sold 30% of the Waterfall Investment Company to the Government Employees Pension Fund, which will be a strategic investor.

The office complex at the Waterfall City plays host to numerous global blue-chip companies, including brands such as DP World, Eppendorf, Dell, Estee Lauder, Pfizer, Ericsson, Dimension Data and Accenture.

The GEPF's introduction as a strategic partner makes "substantial capital" available for further development of the area around Waterfall City, the land area that houses one of South Africa's largest shopping centres, the Mall of Africa, the group said. The proceeds of the sale have also assisted Attacq reduce its gearing to 25.3% from 37.3% a year earlier. Interest-bearing debt fell to R5.9 billion from R8.4 billion.

Waterfall straddles the M1 highway linking Pretoria to Johannesburg and the N3, the country's busiest road connecting the interior to the ports in KwaZulu-Natal and the Eastern Cape.

Attacq's Waterfall City developments are projected to cost R1.4 billion upon completion. The company has sold approximately 87% of the first three phases of its Ellipse Waterfall residential flagship project.

CEO Jackie van Niekerk expressed satisfaction with Attacq's performance, highlighting key strategic transactions that have bolstered its capital structure. The company continues to diversify its tenant mix, responding to strong demand for quality retail and logistics space.

In terms of financial performance, Attacq reported a 9.6% growth in rental income to R1.3 billion, attributed to rental escalations and increased municipal recoveries. Finance costs decreased by 4.1% compared to the previous period.

The group increased its interim dividend by about 3.4% to 30 cents, amounting to a R211 million payout at a ratio of 81.1%. Analyst Shaun Murison commented positively on Attacq's results, highlighting the company's strategic growth and financial management.

The overall financial outlook for Attacq is optimistic, with significant revenue and earnings per share growth, reflecting its operational success and strategic market positioning. Attacq's shares on the JSE saw a modest increase of about 0.4% in morning trade, valuing the company at R7.3 billion. Over the past year, the stock has risen by nearly 13%.