CAPE TOWN - Attacq, a South Africa-focused shopping mall operator, shot the lights out in the tough property market after lifting core distributable earnings per share 23.9percent in the six months to December 31.
The dividend per share grew by 11.1percent to 45cents, a growth rate that not only exceeded management's earlier guidance of 8 to 10percent, but which was also well above current average real estate investment trust (Reit) sector payout growth levels, chief executive Melt Hamman said in an interview yesterday.
Attacq's share price was up 6.12percent to R9.71 at the close on the JSE yesterday.
Trading density growth in the retail portfolio was at 5.7percent, with the recently completed Mall of Africa having increased by 10.1percent.
Chief operating officer Jackie van Niekerk said they were happy with the continuous growth of Mall of Africa.
“The mall delivered impressive trading growth as a result of the Waterfall City densification," she said.
Net profit from property operations, excluding the International Financial Reporting Standards adjustment for straight-line leasing and profits from the sale of sectional title units, increased by 16.7percent to R745.2million (December 2018: R638.7m).
On a like-for-like basis, net operating income increased 7.6percent. The interest cover ratio improved to 1.91 times from 1.85 times.
Hamman said the growth in distributable earnings was mainly driven by the core South Africa portfolio, growth in trading densities, very active management, and from returns on the investment in MAS Real Estate. which invests in property in central and Eastern Europe.
In South Africa, six buildings were completed in Waterfall, with a further six under construction.
Attacq was particularly excited about Ellipse, a new high-rise luxury apartment development in Waterfall City, spread over four towers. Construction of 269 units had commenced with expected completion in the first quarter of the 2022 financial year.
The group received cash dividends of R121.2m from its investment in MAS, up 24.5percent from the prior period. This investment provided the group with geographic diversity by providing it exposure to the higher growth markets of Central and Eastern Europe.
The reduction in Rest of Africa exposure continued in the interim period, with the disposal of interest in Manda Hill, Zambia. There remained four assets in the Rest of Africa operation, one in Nigeria and three in Ghana, but these would also be sold, with the proceeds to be used to reduce debt, said Hamman.
He said the group had better growth prospects in South Africa.
Attacq’s business model is based on four key drivers: the South African portfolio, developments at Waterfall, Investment in central and eastern Europe focused MAS Real Estate and the Rest of Africa retail investments.
Gross revenue was up 7.9percent to R1.2billion.