Attacq, the JSE listed property company developing Waterfall City on Tuesday (10 September) published its financial results for the year ended June 2019, noting that seven buildings have been completed in Midrand, with a further nine buildings under construction.
The real estate investment trust (Reit) reported a full year dividend per share of 81.5 cents, up 10.1% from 2018, while exceeding guidance, it said.
“In a challenging economic environment, the South African portfolio performed well,” the group said, supported by pleasing trading growth from the Mall of Africa and revenue earned from the seven newly completed buildings in Waterfall. This resulted in distributable earnings increasing by 17.1% to R664.1 million, it said.
The group’s South African portfolio contributed R415.4 million to this, with investment in MAS Real Estate adding R189.1 million and its rest of Africa operations adding R86.2 million.
Dragging on distributable earnings was a cost of R26.6 million attributable to ongoing developments at Waterfall City, for the holding of development rights and other associated costs.
Attacq reported a loss of R603 million for the period (2018: profit of R2.7 billion), driven largely by the impairment of loans to Atterbury Africa and Gruppo Investments in Nigeria, as well as negative movements on the fair value adjustments on completed properties, and the Waterfall development rights, the group said.
Operating profit declined to R761.3 million (2018: R1.3 billion), while the group ended the year cash positive, with a balance of R673 million, down from the R1.2 billion at the end of the 2018 financial year. This was mainly due to an R805 million payment in dividends during the year, it said.
Waterfall City is one of the biggest investments in the Attacq portfolio, and includes the likes of PwC tower and Mall of Africa, and an additional nine buildings under construction.
The total asset value of developments at Waterfall, including the value of the Attacq Sanlam joint venture (Waterfall Junction), remained largely unchanged at R2.3 billion (2018: R2.3 billion), Attacq said.
“Whilst these assets do not contribute positively to distributable earnings, it is a platform for future economic benefits via the development of new properties,” the group said.
The buildings completed in Waterfall increased the total South African portfolio primary gross lettable area (PGLA) to 750 825m2 (2018: 722 731m2). The seven buildings added 42 615m2 of PGLA to Waterfall, of which 27 701m2 represents Attacq’s effective share.
Waterfall has 948,786 square metres of developable bulk remaining, it said.
The developments that are still under construction (and their expected completion dates) include:
- Deloitte’s head office (Q3 FY20)
- The Ingress – for PSG Wealth (Q1 FY20)
- The Ingress – building 2 (Q2 FY20)
- Waterfall Corporate Campus (Q2 FY20)
- Waterfall Point (Q2 FY20)
- Waterfall Courtyard Hotel (Q1 FY21)
Developments that are still in the pipeline include:
- Waterfall Corporate Campus – building 4
- The Waterfall Logistics Hub (Q4 FY20)
- The Ellipse – phase 1 (Q4 FY21)
Deloitte’s head office
Waterfall Corporate Campus
Waterfall Courtyard Hotel
The Waterfall Logistics Hub
The Ellipse – phase 1