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Cape Town - Real estate capital growth fund Attacq [JSE:ATT] sees a bright future for the super-regional Mall of Africa in Waterfall City, in which it owns an 80% stake.
“Waterfall remains the jewel in the Attacq crown as a catalyst for regional growth," said Attacq chief executive officer Morné Wilken at the company's results presentation on Tuesday.
“Based on studies by Urban Studies, the projected growth in office space is expected to be almost 30% per annum until 2020. The opening of the 26-storey PwC Tower will accelerate this growth even further.”
The Mall of Africa opened on April 28 2016 with more than 123 000 visitors on opening day, and is projected to attract over 15 million people per year. The 131 000m2 mall is already trading above expectation, with only two months of trading contributing to Attacq’s June 2016 results. It won the Spectrum Award for the best retail development at the South African Council of Shopping Centres Retail Design and Development Awards in Sandton.
Comparing the Waterfall project to other established malls, Wilken said: “Sandton City was built in 1972 and, 44 years later, Sandton is a developed city with 4.5 million m2 of developed space in total. Gateway Centre is today one of the best performing malls in the country, and a catalyst for business growth in the Umhlanga Ridge area.
"Canal Walk in Cape Town is not only one of the best performing malls in the country, but was also the impetus for significant commercial development that led to Century City.”
He pointed out that Waterfall, with Waterfall City as its nucleus, is the ideal infill development between Johannesburg and Pretoria, with excellent access and infrastructure. The project will create more than 27 000 jobs during construction, and around 60 000 people will work there during the operational phase.
In its full year to end-June 2016, Attacq achieved 15.3% growth in adjusted net asset value per share (NAVPS) to R21.89 per share, with the compound annual growth rate in adjusted NAVPS 29.4% since inception.
“Attacq is a South African fund with a quality diversified portfolio and development pipeline. Attacq has enjoyed healthy income growth from its core portfolio with particularly favourable performance from the South African retail and industrial portfolios,” said Wilken.
The company’s total asset value grew by 18.6% to R27.6bn since June 2015, when it stood at R23.3bn. The international portion of its assets showed positive growth both in value and percentage contribution to the overall net asset value, with international assets increasing by 34.5% to R5.9bn.
The Waterfall bulk that has been completed rose by 49.5% to a total of 410 000m2.
Vacancies dropped from 4.0% in June 2015 to only 2.4% in June 2016. The development profit made in the period from Mall of Africa is about R580m, with other developments contributing about R178m.
Attacq has forged new partnerships in South Africa with Sanlam, Equites, Zenprop, Barrow and with Artisan in the UK and Atterbury Europe in Europe to invest in development opportunities across Waterfall and beyond. The company has investments in five operational malls across Africa, with 6% of its total assets in emerging markets.
Wilken foresees slower South African growth, thanks to political uncertainty in the country. He also identifies local services and utilities supply, as well as pressure on resources as potential, as domestic business risks.
Uncertainty caused by Brexit and the US elections, will in his view, have an impact on Attacq’s offshore markets.
Attacq's share price was little changed at R17.46 from Monday's close of R17.35 by 13:45 on the JSE.
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