File picture: James White
CAPE TOWN – Attacq real estate investment trust, which has Waterfall City as a key development, is holding its distribution per share guidance forecast at 8 to 10 percent for the financial year to June 2020, chief executive Melt Hamman said on Tuesday.

He spoke five months into the new financial year, in a pre-close briefing ahead of the release of the interim results. Trading density at the group’s South Africa retail portfolio had shown positive growth in the 12 months to end September. There were plans to dispose of three non-performing assets. It was a tough market to find suitable buyers.

The Mall of Africa customer return rate was at 58 percent within 30 days, which was a positive indicator that it was being viewed as a regular shopping destination. Rising municipal rates, however, remained a risk in the South African retail portfolio.

There had been a shift of tenants reducing space and reviewing their brands.

The Competition Commission’s recent judgment on exclusivity clauses by anchor tenants at shopping malls was being reviewed, but it was a “big win” for landlords.

At the office and mixed use portfolio in South Africa, a challenging environment was being tackled through building on the manager and tenant relationship.

Many tenants were not moving because of the high cost of relocating. The light industrial portfolio at Waterfall City remained a top location for logistics. An MSCI award had been received for the portfolio, as the top performing portfolio of its kind, on a three year annualised return basis.

The total South African portfolio had a vacancy rate of 6.3 percent, versus 6.2 percent on June 30, 2019. There was a strong development pipeline.

A R121.2 million dividend was received from the investment in central and eastern Europe focused MAS Real Estate in October. The reallocation of capital out of Western Europe by MAS was continuing.

In the rest of Africa, the exit strategy was still being pursued and no more expansion was planned. The remaining assets included Accra Mall, Ghana; West Hills Mall, Ghana; Kumas City Mall, Ghana and Ikeja City Mall, Nigeria. Attacq’s data was below average at 33.9 percent.

He believed, however, that the market might reduce the more than 40 percent discount at which Attacq’s shares were trading, by working harder to strengthen the balance sheet. Attacq’s share price closed 0.47 percent lower at R12.78 on the JSE on Thuesday.