Attacq, the JSE-listed REIT and strategic development partner in Waterfall City, published its interim financial results for the six months ended 31 December 2023, reporting an interim dividend of 30.0 cents per share, equating to a payout ratio of 81.1%.
The implementation of the landmark R2.7 billion Waterfall City transaction in October 2023, with the GEPF acquiring 30% of Attacq Waterfall Investment Company Proprietary Limited (AWIC), marked a significant milestone, resulting in group gearing decreasing significantly to 25.3% from 37.3%, it said.
Through the introduction of a long-term strategic shareholder to AWIC and makes substantial capital available for the continued development roll-out of Waterfall City.
It also announced the disposal of its remaining stake in MAS for approximately R773 million.
Jackie van Niekerk, Attacq CEO, said: “This has been an excellent half year for Attacq, closing out key strategic transactions to ensure a sustainable capital structure. Our diverse precinct strategy continues to be well executed, with high occupancy and collection rates respectively of 93.7% and 99.7% emblematic of the high demand for our quality retail and logistics spaces.
"Our flagship residential development Ellipse continues to attract investor interest with excellent sales recorded during the period. Furthermore, our well-located office assets are home to numerous global blue-chip companies, including iconic brands such as DP World, Eppendorf, Dell, Estee Lauder, Pfizer, Ericsson, Dimension Data and Accenture.”
The group reported a strong financial and operational performance with rental income growth of 9.6% to R1.3 billion.
Finance costs reduced by 4.1% when compared to the prior period whilst NOI growth from property operations grew by 6.4%.
Raj Nana, Attacq CFO, said: “Our strong balance sheet was bolstered with the proceeds from the Waterfall City transaction with the GEPF of R2.7 billion which was used to reduce interest-bearing debt to R5.9 billion (Jun 2023: R8.4 billion), resulting in an improvement in the interest cover ratio to 1.93 times.
"The impact of this transaction was only included for the final two months of this six-month reporting period and will have a larger impact on the full year results ending 30 June 2024, when it will be included for eight of the 12 months.
"For the full year, we have revised our DIPS growth guidance upward to between 10.0% and 12.5%. This also considers the disposal of the Group’s shares in MAS which will be invested in income generating activities within the group.”
Looking ahead, the group said that South Africa faces several headwinds, including energy and water disruptions and shortages, low business confidence, political uncertainty and persistently high inflation and interest rates, all of which are likely to constrain economic growth and, as a consequence, the real estate market in general.
The portfolio is expected to continue to generate income growth and, given the current capital structure, prudent interest rate hedging, available and liquidity, and the MAS disposal, the group’s full year DIPS guidance has been revised upwards to between 10.0% and 12.5% growth with a pay-out ratio of 80.0%.
Shares are up 13.6% over the past year.
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