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Waterfall City developer Attacq has now sold over R1.2bn in MAS

Latest sale being a R328m stake this week in the European-focused property fund.
MAS Real Estate's Dambovita Mall in Romania, which opened last August. Image: Supplied

JSE-listed real estate investment trust (Reit) Attacq is aggressively slashing its debt and loan-to-value (LTV) ratio with the announcement of yet another asset sale on Tuesday as it weathers the Covid-19 financial crunch.

The group, which is the developer of the multi-billion-rand Waterfall City mega development in Gauteng and majority owner of Mall of Africa, revealed in a Sens statement that it has sold a further R328 million stake in MAS Real Estate to three South African fund managers.

This follows the property counter selling two stakes in European-focused MAS in December 2020 and March this year, totalling R888 million.


The R500 million December sale was to an Oppenheimer family-linked investment firm, while the March deal was with PKM Development Limited.

Together with this week’s deal, it effectively means that Attacq has sold around two thirds or just over R1.2 billion of its shareholding in the Isle of Man-based group since December last year.

Before the disposals, Attacq had a 20.7% stake in MAS, valued at R1.8 billion. This made it the biggest single shareholder in the offshore fund, which incidentally has a secondary listing on the JSE.

The money from the sales largely goes towards paying off the South African Reit’s euro-denominated debt, which will go some way in also cutting the group’s gearing or LTV levels.

Attacq’s LTV breached 46% in December 2020, prompting the group’s executives to approach its banks to lift the fund’s covenant level to 60%.

It came in the wake of the Covid-19 financial fallout, which saw the group’s property valuations and stock price plunge last year. This in turn saw its LTV ratio ballooning, as was the case with several other Reits such as Redefine Properties and Rebosis Property Fund.


Attacq’s latest sell-down of its MAS investment was at a discount, according to its Sens statement.

“The disposal price of R16 per MAS share represents a 3% discount to the closing spot price of R16.50 as at 28 May 2021 [being the date prior to the agreement of terms] and a 3.7% discount to the 30-day volume weighted average share price of R16.61 on the same date,” it noted.

This discount indicates something of a forced sale considering that Attacq and fellow JSE-listed Reit Hyprop are struggling to sell their jointly-owned rest-of-Africa assets at the moment.

“The disposal proceeds will be used to settle Attacq’s remaining euro debt and fund upcoming development opportunities,” it said.

“Attacq has no intention of disposing of any of its remaining MAS shares in the foreseeable future,” it added.

However, while the group said late last year that it was looking to dispose around R2 billion of assets to boost its balance sheet and improve its LTV levels, it did not mention that it was considering selling down its MAS stake at the time.

“The disposal is in accordance with Attacq’s stated intention of reducing its overall debt levels and improving its interest cover ratio. Following the [latest] disposal, Attacq’s remaining shareholding in MAS will be 46 157 934 shares, representing 6.5% of MAS’s issued share capital,” it pointed out in the Sens announcement.

Attacq said the buyers and the share of the disposal proceeds attributable to each buyer (as part of the latest MAS share sale) are as follows:

  • Prudential Investment Managers (on behalf of underlying clients in terms of discretionary mandates) – 12 million shares for R192 million
  • Meago Asset Managers (on behalf of its clients) – 5.5 million shares for R88 million; and
  • Sesfikile Capital (on behalf of its clients) – three million shares for R48 million.

“The disposals are not subject to any conditions precedent and will be effected by means of off-market block trades on or about 2 June 2021,” Attacq noted.

Speaking to Moneyweb on Attacq’s latest sell-down in MAS, Garreth Elston, chief investment officer at Reitway Global, said the move makes sense as it means the South African Reit would better structure its business.

“From an Attacq investor’s point of view, it is also more efficient because if investors want MAS exposure, they can get it directly, rather than owning shares in a company with a bit of SA property in addition to MAS,” he explained.

Craig Smith, head of research and property at Anchor Stockbrokers, shared similar sentiments to Elston.

“Attacq selling down further stakes in MAS does not come as much of a surprise, given that it had sold down fairly substantial stakes since December… To hold a fairly small stake in another listed investment in which investors can get access to was starting to make less sense,” he said.

“It’s also a sign that Attacq, which has a significant pipeline to roll-out at Waterfall, is trying to enhance its liquidity and free up cash to take advantage of those development opportunities,” he pointed out.

Smith added that Attacq’s investment is MAS is largely “passive” and this meant that it had limited ability in influencing the European property counter to pay-out dividends.

He also noted Attacq’s Euro-denominated funding on the investment, which would be further reduced and thus bolster the local counter’s LTV ratio.

While Attacq did not give an update on its latest LTV level, the recent sale of its 50% stake in the Deloitte head office building at Waterfall City means that it has surpassed its R2 billion in disposals target.

Read: Africrest Properties pumps R800m into Sunninghill office-to-residential conversions

The landmark Deloitte building, which was jointly owned with private property group Atterbury, fetched R1.7 billion in a sale to the Public Investment Corporation.

Attacq also finally sold its old PwC head office building in Sunninghill to Africrest Properties for R76.6 million in December.




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