Attacq, the precinct-focused property REIT that has Waterfall City as its flagship development, achieved a solid operations performance in the four months to end-October, CEO Jackie van Niekerk said yesterday in a pre-close update for the interim period to December 31, 2023.
Some R6 billion of debt had been refinanced, non-core assets had been disposed of, and the group was on track to deliver its guidance for 2024 of distribution income per share growth of between 8% and 10% when compared with the 2023 financial year.
She said the group was seeing increased demand for collaboration hub space at its office properties, while retail trade within its properties such as Mall of Africa, north of Johannesburg, remained strong during the period. The group used the period to continue to build resilience and generate additional efficiencies.
The development of Waterfall City into a smart, safe, sustainable city through partnerships was ongoing, and demand remained robust for logistics developments in particular. The focus was to increase rental properties with new, high-quality and multi-use assets.
The transaction to increase the group’s stake in Waterfall Junction to 50% had been finalised, and the development and maintenance of world-class infrastructure and urban design was ongoing, with for instance, platform development work currently under way at Phase One at Waterfall Junction, where construction on a big logistics development could begin in March or April next year.
On the building of resilience within the group, she said solar power systems were being rolled out with the aim of going 25% off-grid by 2030. A plant was under construction to cater for a power purchase agreement, while a Smart Hub was being developed to fully digitalise the utility management system at Waterfall City.
In its overall South African portfolio, the occupancy at the end of the four months was 93.6% versus 92.5% at the last year to end-June 30, 2023. The collection rate was 100.01% compared with 100.7% at the last financial year end. The client retention rate was lower at 57.6% versus 82.2%.
Turnover growth at Waterfall City was relatively strong compared with the group’s other retail assets, at 12.1% in July, 10.8% in August, 13.6% in September and 12.3% in October. Its footfall through the period was boosted by the Waterfall City Park, one of the Official Fan Park hosts for the recent 2023 Rugby World Cup, which drew in many consumers who had never been to the mall before. The mall also featured more entertainment offerings with the opening, for instance, of Bounce and Discovery Soccer Park.
Capital expenditure for development activity was R1.5bn, comprising 49 906 square metres, some of which were residential units. At the end of June 2023 the capital expenditure figure stood at R1.3bn. Developments currently under construction covered some 33 257 square metres.
Notably, interest-bearing debt at the end of the four months stood at R5.99bn, versus R8.38bn at the end of June 2023. The gearing ratio was thus at a comfortable 25.7% versus the debt convenants’ 60% limit.