JOHANNESBURG - MAS Real Estate, the commercial property investor, developer and operator listed on the main board of the JSE and the Euro-MTF market of the Luxembourg Stock Exchange, anticipates achieving growth of more than 30% in distributions in each of its next two financial years.
But in an investor presentation published on its website yesterday, the group said the forecast was based on the assumption that a stable macro-economic environment would continue, that there would not be any major corporate failures, and that its planned investments and developments progressed in line with expectations.
MAS reported distribution growth of at least 30percent in its past two financial years.
The company has significant exposure to central and eastern Europe (CEE), with investments in Poland, Bulgaria, Slovenia and Romania.
Commenting on its strategy and capital allocation in the investor presentation, MAS said higher growth was available in CEE, with retail and residential property providing favourable exposure to the rapidly increasing purchasing power of the population in this region.
Dominant malls
Acquisitions by MAS in its 2017 financial year included three dominant malls as part of its expansion in CEE as the value of its income-generating property portfolio grew 91% to 463.4million (R7.17billion) at the end of June from 242.6m in the previous year.
The malls were the Nova Park Shopping Mall in Poland, which was acquired in November, and the Galleria portfolio in Bulgaria, which was acquired in May this year, and comprised the Galleria Burgas Mall and the Galleria Stara Zagora Mall.
The strong performance by and tenant demand at these malls had resulted in MAS considering significant extensions at Nova Park and Galleria Burgas. It said the planned extensions would consolidate the malls’ regional dominance. MAS has secured extensions, developments and a land bank-secured pipeline of 756m and a further pipeline of 230m, which include seven convenience value retail extensions.
The first four were under construction and scheduled to open for trading by the end of this calendar year. MAS has also acquired land for two large-scale residential developments, with a total of 930 residential units. Both of these developments were located in fast-growing residential areas of Bucharest.
Pipera, an 8.1-hectare site close to the new central business district and commercial centre of Bucharest, would comprise 550 high-quality houses, townhouses and apartments. It was scheduled to open in March next year. Marmura would have up to 380 mid-market apartments on a 1.5hectare site in the north west of Bucharest.
Lukas Nakos, the chief executive of MAS, said last week the burgeoning pipeline in the development joint venture with Prime Kapital was expected to have a significant positive impact on the company’s distributions a share.
“The development opportunities acquired by and available to the joint venture have substantially exceeded initial expectations, with the venture now targeting more than 1bn in high-quality developments across CEE,” he said.
This resulted in MAS increasing its commitment to the Prime Kapital development joint venture up to a maximum of 350m from 200m.