South Africa’s Attacq reports 24% NAV growth for full year and delivers enhancing deals

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Attacq limited (“Attacq”), a leading South African capital growth property company listed on the JSE, has announced its full-year results since listing on the JSE on 14 October 2013. As a unique JSE-listed capital growth investment in real estate, Attacq’s performance is measured by growth in net asset value per share (“NAVPS”). It reported an increase of 24% NAVPS from 30 June 2013 to 30 June 2014.

Attacq represents a singular investment proposition which already holds a superior quality property portfolio with an existing and future development pipeline. It has a high level of diversification in Europe and Africa, which gives Attacq access to future growth opportunities in Africa and stability in terms of its European investments.  Attacq further holds a strategic 25% shareholding in Atterbury Property Holdings Pty Ltd (“Atterbury”) which is a world class developer.

Attacq’s business has two main focus areas: investments and developments. Investments comprise completed buildings held directly and indirectly and other property investment funds. Developments comprise land, greenfields development of land or brownfields development by refurbishments to existing buildings. Investments provide stable income and balance sheet strength to responsibly secure and fund high-growth development opportunities.

Attacq delivered on all 14 transactions disclosed in its listing prospectus, before year end, which included the internalisation of the asset manager, securing full ownership of Brooklyn Bridge Office Park in Pretoria, buying out the minorities in its regional shopping centres: Mooiriver Mall, the Eikestad Mall Precinct, 25% undivided share in Brooklyn Mall and Garden Route Mall. It further completed five buildings in the prestigious Waterfall development with the effect of increasing its gross assets by 44.5% to over R18.4 billion.

Attacq’s gearing has reduced to 34% as at 30 June 2014 and 63% of its total external interest-bearing debt was fixed.

Morne Wilken, CEO of Attacq said: “We had a very exciting financial year and the management team has delivered exceptional results, over and above adapting to the listed environment. We internalised the asset management, sold down on our non–core assets at a premium to NAV and simplified our structure. We further consolidated our international portfolio with an increased shareholding of 47,2% in MAS Real Estate Inc. I could not be prouder of our management team nor more elated with the outcome of our results.”

Progressing its international investment strategy after the close of its half-year period, Attacq followed its rights and invested R1.3 billion in the MAS private placement which closed on 11 March 2014 in order to maintain its stake of 47.2% in the enlarged issued share capital of MAS. The additional capital raised by MAS will allow it to act on further income-generating investment opportunities and fast-track its development pipeline.

The New Waverly development in Edinburgh Scotland has started with two hotels, one for Whitbread and FTSE 100 company and Adagio. MAS has made a lot of progress securing a full pipeline for the R2,8 billion it raised, with most of these opportunities in Germany. They are also assessing some interesting opportunities in Portugal and Spain.

“Our international investment strategy provides a solid risk mitigate, stable income and creates an important Rand hedge. We are also ideally placed to benefit from the growth due to the European recovery,” says Wilken. He adds that MAS has a strong management team, a quality portfolio, an attractive development and acquisition pipeline.

MAS is likely to internalise its asset management and move to the main board of the JSE. Attacq equity account for the value of their investment into MAS, however by using the market capitalisation of MAS as at 30 June 2014, a further R638 million (pre-tax) can be added to the NAV of Attacq.

Hyprop Investments Limited (“Hyprop”) and Attacq Limited have restructured their investment in African Land Investments (“African Land”), whereby Hyprop, through its wholly-owned subsidiary, Hyprop Mauritius, will hold 50% in Manda Hill, African Land’s only asset. Atterbury Africa, a joint venture between Hyprop, Attacq and the Atterbury Group, will hold the balance. It was further decided to merge the management teams of Africa Land Investments and Atterbury Africa whilst internalising the asset management.

The new merged entity was rebranded to Att Africa. Kevin Teeroovengadum, with his excellent network which he obtained whilst at Actis, was elected as CEO and Renier Van Rensburg as the Financial Director. Att Africa’s retail focus remains the vision of green field development, acquisition of existing malls, redevelopments and extensions. Attacq holds a 31.25% shareholding in Att Africa, which has two completed Malls; Manda Hill and Accra Mall as well as three malls under construction: West Hills 27 500sqm, which will be completed in Oct 2014, Achimota 13 400sqm and Kumasi 27 000sqm.

Attacq also boosted its effective shareholding in Attacq Waterfall Investment Company, the company that holds the development rights in the prestigious Waterfall Estate, to 85,9% and broke ground on the largest single-phase mall in South Africa, the Mall of Africa.

Spanning between Midrand and Sandton, the 323 ha Waterfall boasts a staggering 1,7 million square metres of mixed-use approved development bulk of which a total of 162 269sqm has been completed up to the end of 30 June 2014, incorporating Cell C Campus, Group 5 Head Office, a new distribution centre for MBT Technologies, two buildings within the environmentally innovative Maxwell Office park and an exceptionally popular Waterfall Corner.

Attacq has a further 199 016sqm currently under construction plus a secured pipeline of 58 572sqm. These developments include the Mall of Africa which will have more than 130 000sqm of retail space – as the largest single phase super-regional mall to open its doors; a 149-room City Lodge; and, distribution centres: Drager, Westcon, Angel Shack, Cummins, Covidien and offices: Premier, Honda, and the Swiss pharmaceutical giant Novartis. “With its outstanding location and state-of-the-art architecture Waterfall is positioned to be one of South Africa’s most successful nodes,” Wilken adds.

Wilken further states: “We are especially happy with our first set of annual results as a listed company. We are well positioned to move forward and benefit from exciting opportunities in our portfolio and development pipeline. We believe the 15 year pipeline which Waterfall offers is a game changer considering its perfect positioning between Johannesburg and Pretoria, with the exciting Waterfall City, potentially the new CBD of Gauteng. As a capital growth fund we are in an ideal position to take a long-term investment view, which is well suited to property as a long-term asset.”

Wilken explains: “Attacq listed to offer improved liquidity for shareholders, to create a platform to raise capital to deploy into property investment and development opportunities, and to increase its profile in local, African and global markets. We have seen noteworthy success in all areas.”

Wilken confirmed that Attacq’s operational focus remains achieving sustainable capital growth for shareholders through the ongoing roll out of Waterfall, the successful completion of its existing development pipeline and the implementation of its diversification strategy into African and international markets.

One of the new corporates, which has decided to consolidate its corporate head office at Waterfall City is PWC. The transaction is still subject to a number of conditions. “To attain such a corporate will most definitely be a great honour and a feather in our cap,” says Wilken.