ATTACQ, known for the success of its Waterfall City precinct, lifted distributable income 34.1 percent to 28.2 cents per share for the six months to December 31, putting it on track to meet its full year guidance.
The interim distributable income excluded profit earned from the sale of residential units of 9.35 cents. Management forecast distributable income of between 46 and 48.1 cents per share for the year ending June 30, 2022, barring any unforeseen circumstances, much in line with the 2021 result.
The growth in the past six months was mainly driven by the dividend from its investment in central and eastern Europe (CEE) focused MAS of R46.1m.
CFO Raj Nana said in a telephone interview there was some uncertainty as to the impact of higher energy costs and inflation, and how Russia’s invasion of Ukraine might affect the CEE economies where MAS has shopping centres.
The distributable income from Waterfall City decreased by 6 percent to 14 cents per share, due to the disposal of Deloitte head office, an increase in bad debt provisions and higher vacancies, offset by lower Covid-19 rental discounts and lower interest expense as a result of debt reduction.
Distributable income from the Rest of South Africa decreased by 13.5 percent to 7.7 cents per share, due to lower income from Brooklyn Bridge Office Park and the auditor-general of South Africa building, offset by lower rental discounts offered and lower interest expense.
Distributable income from other investments increased from a loss of 2.7 cents per share to a profit of 6.5 cents per share mainly due to Attacq receiving a dividend from its investment in MAS of R46.1m, and the saving of interest from the settlement of all euro debt during the year.
Due to its trading nature, excluded from distributable income was R65.9m (December 2020: R8.1m) of profit earned on the sale of sectional title units in Waterfall City.
No interim dividend was declared. Nana said expectations of higher inflation, the possibility of a steep interest rate cycle, and a significant development pipeline were factors that were considered on dividends.
The board would consider a dividend before October 31, 2022.
Gearing fell from 46.3 percent at December 31, 2020 to 38 percent, due to interest-bearing borrowings falling 15.4 percent to R8.6 billion. A strong liquidity position of R1.8bn was maintained. Nana said they were comfortable with the level of gearing at present.
CEO Jackie van Niekerk said Attacq remained focused on delivering on the financial and operational strategy that its management had embedded last year.
The group retail-experience hubs performed relatively well, reporting a 96.2 percent occupancy rate. In addition, year-on-year weighted average trading density grew by 8.7 percent, with Mall of Africa increasing by 14.9 percent, Garden Route Mall increasing by 10 percent and Lynnwood Bridge Retail increasing by 9 percent.
“All assets indicate the increased level of sales as the group wades through to return to 2019 levels,” she said.
Collaboration hubs – focusing on space optimisation, convenience and space-as-a-service – were a concept that was in the making pre Covid-19, but the pandemic accelerated their relevance.
This innovation saw Attacq improve office utilisation rates towards the end of the previous calendar year, as businesses started implementing return-to-work policies and hybrid working models.
Attacq entered a partnership with IWG (Regus and SPACES in South Africa), to collectively expand their service offerings and responding to the varying office needs.
Starting with Lynnwood Bridge Precinct and then the Waterfall City precinct, Attacq was broadening its footprint, offering flex-space options that would be managed by IWG.
The group’s logistics hubs reported 100 percent occupancy in the six months to December 31, 2021.
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