Waterfall City developments top R2.4 billion – including a massive new warehouse for Nespresso

JSE listed property group Attacq has published its interim financial results for the six month period ended December 2019.

Attacq is a South African-based Real Estate Investment Trust (REIT) which has a local portfolio comprising retail, office and mixed-use, light industrial and hotel properties – all of which delivered strong results despite what the group called a “subdued operating environment” over the six month period.

The average trading density for the year ended 31 December 2019 increased by 5.7%, while the Mall of Africa continued to perform well with a 10.1% growth in trading density.

Net profit from property operations, excluding the IFRS adjustment for straight-line leasing and profits from the sale of sectional title units, increased by 16.7% to R745.2 million (31 December 2018: R638.7 million). On a like-for-like basis, net operating income increased by 7.6%.

Rental income increased by 12.6% to R1.1 billion (31 December 2018: R1.0 million) due to the additional rental income from the buildings completed during the FY19 and FY20 years as well as in-force escalations and vacancies filled. Like-for-like rental growth of 8.1% was achieved.

It announced an interim dividend of 45.0 cents per share for the period.

The group noted that its core distributable earnings per share increased by 23.9% to 49.8 cents per share; however, the it decided to declare a dividend of 45.0 cents per share and retain the balance to fund capital expenditure.

Waterfall City

During the period, six buildings were completed in Waterfall City with a primary gross lettable area (PGLA) of 18,642 square metres.

Waterfall City is one of the biggest investments in the group’s portfolio and is where it expects to derive a lot of future earnings upon completion of the many projects in its pipeline.

The centrally located node has another six buildings under construction, including the Deloitte head office, Waterfall Corporate Campus office park, Ellipse Waterfall, Nexus Courtyard Hotel as well as a newly revealed Nespresso warehouse.

The Deloitte head office reached practical completion on 31 January 2020. The six-storey, 42,500 square metre office building will welcome about 3,200 new employees as of 1 April 2020.

“Attacq continues to create an urban environment within Waterfall City and is particularly excited about Ellipse.

“Ellipse is the new iconic high-rise luxury apartment development in the heart of Waterfall City, spread over four towers. Construction of 269 units has commenced with expected completion in Q1 FY2022,” it said.

Over the six month period, six projects have been completed, with lease agreements taking effect. These include:

  • The Ingress (2 buildings)
  • Waterfall Point (4 buildings)

The group has more projects in the pipeline for Waterfall City. These developments and their expected completion dates are outlined below:

  • Deloitte head office (Q3FY20)
  • Waterfall Corporate Campus (Q3FY20)
  • Nespresso Warehouse (Q4FY20)
  • Nexus Waterfall (Q2FY21)
  • Ellipse Waterfall (Q1FY22)

Developments under construction are valued at R910.6 million, with leasehold land (the value of the development rights) are at R1 million.

Including pre-development capital expenditure, inventory, assets and the value of the Sanlam joint-venture in Waterfall Junction, the city’s total development value is sitting at R2.4 billion, up slightly from R2.3 billion at June 2019.

Among the new developments, Attacq revealed that one of its new tenants is Nespresso, which will occupy a massive 4,757 square metre warehouse, including an office.

Nespresso South Africa is currently under construction. The design of the Nespresso building is based on the completed midi-unit scheme within the same land parcel and represents the final development for Land Parcel 8 North.

Read: Attacq points to Waterfall City growth

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Waterfall City developments top R2.4 billion – including a massive new warehouse for Nespresso