Rebranded Attacq forges ahead

Market volatility and challenging macroeconomics have not deterred Attacq’s development expansion visions. Not that development in the past has been small-scale, the company perhaps best known for its flagship 130 000sqm super-regional mall, Mall of Africa. The mammoth mall, located within Waterfall City in Midrand, opened its doors in April and already has a daily footfall of between 40 000 and 49 000.
 
The JSE-listed capital growth fund and developer continues to raise its profile. Not only has it rebranded itself, but it has also forged ahead in a joint venture with Sanlam Properties and Equites that sees it stepping into the return-generating light industrial space.
 
The company’s rebranding now differentiates it from development partner Atterbury Property, giving the company a separate identity and preventing what Morné Wilken, CEO of Attacq, terms “confusion in the market". 

“When we entered the market, coming out of the Atterbury stable it made sense to have that association with Atterbury, but we are separate companies and we operate independently.”
 
Not only has Attacq decided to sell its full stake in Atterbury, but Atterbury will also no-longer hold exclusivity for development at Waterfall, the termination of this agreed to between the two companies and effective 1 July. Atterbury CEO Louis van der Watt however remains on the Attacq board.
 
The move is part of Attacq’s bid to accelerate the internalisation of the Waterfall development management function and take full control of strategic planning, marketing and roll-out of Waterfall developments.
 
As part of the new strategy Pete Mackenzie has been appointed head of developments with Morné Whitehead, formerly from Atterbury, also signed up. 
 
While completion of certain developments will remain the responsibility of Atterbury, Wilken tells finweek that taking full control of Waterfall development management will also effectively save Attacq money and earn it fees.
 
Much of the noise around Attacq has been related to its Waterfall developments. And Attacq’s latest joint venture with Sanlam Properties is no different, the partnership effectively expanding its Waterfall development footprint.  
 
The joint venture, Sanlam holding 80% and Attacq 20%, is for further light industrial commercial and retail development in Waterfall.
 
The partnership has acquired 128ha of land on the eastern side of the N1 freeway and south of the Allandale interchange, 28ha of that Waterfall land from Attacq with Sanlam purchasing an additional adjacent 100ha from the Mia family.
 
“Sanlam want to increase their direct property exposure,” says Wilken. “And this transaction will give them development profits. Attacq benefits by managing the development roll-out and having rights to increase shareholding to 50%.”
 
Of this land, 114ha (approximately 570 000sqm) will be utilised for distribution-type light industrial commercial developments hence the company’s strategic R728m partnership with specialist industrial property fund Equites for eight industrial buildings at Waterfall. 
 
The company though has not entirely shifted away from retail, the balance of 14ha to be developed as a retail strip/convenience-type mall. It is here in this small retail component that Attacq has already elected to increase its shareholding to 50%.
            
Residential component

The massive Waterfall node has − up to now − not offered a sectional title residential apartment component. That is about to change, Attacq telling finweek that they will partner with the Barrow Group to tap into that market. Wilken says studio to two-bedroom/three-bedroom apartments ranging in size from 30sqm to around 80sqm will be offered at prices that are market related.
 
The residential component adds to that of Balwin Properties who, in April, acquired development rights in the Kyalami/Waterfall node for R1.15m to develop around 15 000 sectional title residential units ranging in price from R499 000 to R2.5m.
 
Offshore update

Attacq has an international footprint that comprises 24% of its R27.1bn portfolio, 17% of that in developed markets. The company has exposure in Cyprus and Serbia as well as − via its stake in MAS Real Estate Inc. − Germany, Switzerland and the UK. “What is beneficial about MAS is that they don’t have that big an exposure in the UK; they have more properties in Switzerland and Germany so the MAS price has not been that negatively affected by Brexit."
 
Wilken is also upbeat about Attacq’s stake in Cyprus, saying the two shopping malls are performing well. He does though concede that Brexit could have a negative effect further down the line. “But up to now, we haven’t seen that,” he says.