Attacq Limited last week posted strong results for the six-month period to 31 December 2015, despite a very challenging local and international business climate.
Attacq achieved a 27,6% growth in net asset value per share (NAVPS) adjusted for deferred tax for the full year compared to December 2014 and a year-on-year growth of 24.5% in NAVPS. Attacq’s total asset value grew to R27,1-billion since June 2015 when it stood at R23,3-billion. The international portion of the Attacq assets showed positive growth both in value and percentage contribution to the overall net asset value.
Develop, invest, grow
“Attacq is unique in its vision as the leading JSE-listed property capital growth fund and aims to deliver exceptional sustainable capital growth through creative local and international real estate developments and investments. We are pleased that our interim results illustrate that we are living our vision. Attacq pursues its vision through its strategic drivers of Develop, Invest and Grow,” explains Attacq’s chief executive officer, Morné Wilken (seen left).
Wilken explains that the results for the period sets the tone for the key focus going forward that includes to grow the development pipeline and Waterfall City developments. “Attacq has a diverse investment portfolio that includes landmark commercial and retail property investments and developments. Waterfall is the jewel in the African crown. Waterfall City with its benchmark business architecture is rapidly becoming the new African corporate headquarter destination,” states Wilken.
Mall of Africa
“Attacq will leverage opening of Mall of Africa as a key strategic milestone. “The 131 000 square metre Mall of Africa ̶ South Africa’s biggest single-phase mall development ̶ is the largest project and anchor development within Waterfall City and is destined to soon be a real retail draw card for Waterfall. The opening of the Mall of Africa on 28 April 2016 will be a true tipping point for Waterfall City and the catalyst for further development. Our conservative estimates indicate that around 15 million people will visit the iconic destination mall annually to enjoy a world-class blue chip shopping experience. The ideally located mall next to the N1 highway boasts great shopping, many lifestyle features, events infrastructure and attractive surrounding environments and landscaped gardens,” says Wilken.
“Waterfall City is rapidly becoming a destination city where residents, business occupants and visitors can enjoy a true work, live and play quality lifestyle,” explains Melt Hamman, chief financial officer of Attacq (seen left).
International footprint
“The Attacq properties and investments are geographically diverse assets across Africa. Clearly our strategy is proving to be sound, as our results illustrate. The mix between investing in developing and established hard currency markets stand us in good stead,” states Wilken.
Attacq representation of international investments is growing across sub-Saharan Africa via retail-focused AttAfrica Limited (AttAfrica), in Germany, Switzerland and the United Kingdom via a strategic stake in MAS Real Estate Inc. (MAS) and in Central and Eastern Europe. Internationally, Attacq has invested into new markets in Cyprus and Serbia which complement its existing Western European exposure via MAS. “The Cyprus assets provide expansion opportunities and further developments will be undertaken in Serbia,” explains Wilken.
Attacq acquired an effective 48,6% interest in ITTL Trade & Tourist Leisure Park Plc, the owner of the Shacolas Emporium Park and an effective 48,5% interest in Woolworth Commercial Centre Plc, the owner of The Mall of Engomi. The Cyprian properties are located in Nicosia, the capital city of Cyprus and were acquired by Atterbury Cyprus Limited (Atterbury Cyprus) in which Attacq has a 48,8% shareholding. Atterbury Europe B.V. (Atterbury Europe), together with minorities, owns the balance of the shareholding in Atterbury Cyprus.
In Serbia Attacq, jointly with Atterbury Europe, acquired a 33% shareholding in a portfolio of five operational Serbian retail properties with a gross value of €228-million.
Succeeding in challenging economic times
Wilken states that the sound hedging protocols with respect to the management of interest rate exposures and strategic understanding of international currency markets benefitted Attacq.
Wilken and Hamman agree that there is inherent risk and challenges to overcome in the current regional and global economic climate.
“In Sub Saharan Africa, the short to medium term outlook has weakened significantly with the challenges of a strong dollar and depressed commodity prices. Our focus in Africa will be on delivering Kumasi City Mall and active asset management of existing assets through the cycle. Africa in general is experiencing challenging economic conditions given the recent USD strength, continued depressed commodity and oil prices and lack of stability in power supply,” explains Hamman.
The dominant malls in the Attacq portfolio, notably Manda Hill Mall, Ikeya City Mall and Accra Mall, have defensive qualities and continue to trade relatively well given the more challenging operating environment.
During the period Attacq disposed of a 34,9% shareholding in the Mauritian Bagaprop Limited, the owner of the Bagatelle Mall in Mauritius and its 49.9% interest in Mall of Mauritius at Bagatelle Limited, the owner of the land and developments surrounding the Bagatelle Mall in November 2015.
Value beyond the bottomline
Attacq prides itself on living its core values and being a responsible corporate citizen that invests for the greater good of society. “Attacq looks beyond our own bottom-line and participate in, develops and invests in the growth of of people.
Future view
Attacq remains positive in its future prospects. “In South Africa, in addition to optimising its growing R12,4 billion portfolio of operational properties and delivering on its Waterfall pipeline, Attacq remains on the lookout for other growth opportunities,” says Wilken.
“Attacq will continue to develop, invest and grow wisely as a sound listed capital growth fund with a strong investment and development pipeline. We will continue to pursue good business opportunities in South Africa, developing markets as well as established markets,” concludes Wilken.
