JOHANNESBURG – A strong development pipeline and diversification strategy in Africa and international markets buoyed Attacq to report an increase in its net asset value per share of 24% to R14.77 for the year ended June 2013.
Attacq, with a market capitalisation of over R14 billion, secured full ownership of its local retail assets during the financial period under review. This includes super regional centres of MooiRivier Mall, the Eikestad Mall Precinct, Brooklyn Mall and Garden Route Mall.
During the financial year, Attacq saw the value of its property portfolio increase by 28.9% to R12.83 billion from R9.93 billion in the previous year.
In its key development of the Waterfall City, Attacq completed five more buildings (largely office buildings). Attacq also boosted its effective holding shareholding in Attacq Waterfall Invest Company – which has the rights to the Waterfall Estates development – to 85.9%.
The prime development saw the opening of a Cell C Campus, Group 5 head office, new distribution centre for MBT Technologies, two buildings in the Maxwell Office Park and Waterfall Corner.
With a long-term view of up to 15 years in Waterfall, “At year end, Waterfall’s secured pipeline of projects planned or underway totalled 296 493 square metres and 79% of the total developable bulk of 1.75
million square metres remains untapped,” it states.
The retail centre is set to anchor Waterfall City, which Attacq CEO Morné Wilken says will be positioned to be “one of South Africa’s most successful nodes.”
Wilken says the development will benefit from corporates looking to consolidate their head offices. The property counter has secured PwC at Waterfall, where the company will locate their 40 000 square metre head office at the development node. The development will be a 25-story building, housing over 3 500 employees.
“Critical for Attacq is development pipeline and Waterfall is key to that, it gives us further pipeline for a few years. We like big size properties in strong nodes,” he says.
The (development) bulk of Atttacq’s investments is largely in South Africa, representing 74% while the split in Africa and international (mainly Europe) is 9% and 17% respectively.
Wilken says part of Attacq’s strategy is its diversified exposure to different markets.
“We still think there is opportunity in Africa, the projected growth in 2014 is 5%.”
Beyond South Africa, Attacq has a 31.25% stake in Atterbury Africa, rebranded as Att Africa (management teams of African Land Investments and Atterbury Africa merged) which focuses on retail development opportunities and acquisitions. The rebranded Att Africa is with ALI in which Attacq acquired a R12.4% stake in December 2013.
Att Africa has exposure to the 19 000 square metres Accra Mall in Ghana and the 43 400 square metres Manda Hill Mall in Zambia. The Africa entity has an additional three retail developments underway including; West Hills Mall in Ghana, Achimota Mall and Kumasi City Mall in Ghana.
The property counter also has a 41.8% stake in the Bagatelle Mall, south of Port Louis in Mauritius. The focus, Wilken says will be on bulking up its European investments, as it has a 47.2% stake in MAS Real Estate in Europe. “We like the Western Europe focus, euro income stream, the management and development pipeline,” he says. Attacq had invested a further R1.3 billion in February and has opportunities in Portugal and Spain.
“Our international investment strategy provides a solid risk mitigate, stable income and creates an important rand hedge,” he says.
In the local market, Wilken says diversification will be key, given the macroeconomic uncertainty, possible downgrading of South Africa, slow economic growth and an interest rate cycle. “We have a first-movers advantage in Africa and we are looking at untapped markets,” Wilken explains.
Watch Wilken answering questions at the results presentation below: