Joburg mega-development gets even bigger

 ·13 Sep 2022

JSE-listed REIT Attacq, the developer of Waterfall City, says that it continues to attract a quality rental income stream of international commercial clients, many of which are in the tech space.

The group published its financial results for the full-year ended June 2022 on Tuesday (13 September), noting a return to dividend payouts – this time an amount of 50 cents per share, representing a payout ratio of 80%, as well as an increase in distributable income per share by 34.2% to 62.8 cents.

The group said its performance was particularly satisfying in the context of South Africa’s record unemployment levels and low-growth environment and emphasised the underlying quality of the portfolio, characterised by continued growth in the burgeoning mixed-use Waterfall City precinct.

Attacq CEO Jackie van Niekerk said: “During the past year, we emerged from Covid-19 with an improved company culture and capital structure. Our focus is now on new opportunities, mainly through the implementation of our environmental plan, in support of sustainable growth within our portfolio and delivery of the company’s purpose and vision.

Financial highlights:

  • Dividends resumed with 50.0 cents per share declared for the financial year
  • Trading profit of 9.7 cents per share on the sale of sectional title units
  • Occupancy and collection rates remain high at 92.1% and 97.8% respectively
  • Completed Waterfall City developments of R997.6 million totalling 47,623m² of GLA
  • Power Purchase Agreement for 15MWp concluded

“A key ingredient of success has been formulating and executing our ‘hub’ strategy, which focuses on creating segmented retail-experience, collaboration and logistics hubs that are smart, safe and sustainable,” said van Niekerk.

Attacq has completed developments of more than 47,623 sqm of gross lettable area (GLA) in Waterfall City, up from 33,332 sqm a year ago.

Further highlights include concluding an amended lease agreement on the Cell C collaboration hub space, subject to the completion of Cell C’s recapitalisation, of (24,955 sqm), whereby the warehouse component of the Cell C campus (14,014 sqm) was re-let at market-related rentals for a period of three years.

Attacq said it continues to secure a quality rental income stream, notably a high proportion of international commercial clients with several global blue-chip corporates, including Amazon Web Services, Cisco, Pfizer and Ericsson moving to Waterfall City during the year.

In August, tech giant Cisco moved its South Africa offices into The Ingress in Waterfall City, Midrand, as part of a plan to adopt a more hybrid work policy.

Vantage Data Centers announced the completion of phase one of its R15 billion hyperscale data centre at Waterfall. The 30-acre (12 hectares) campus will include 80MW of IT capacity and more than 60,000 square meters across 3 data centres upon completion.

A cautious, but encouraging outlook

At a macro level, Attacq pointed to a number of headwinds, including poor business confidence, high unemployment, rising inflation and interest rates, which are likely to restrict economic growth.

“Notwithstanding these headwinds, the portfolio is expected to continue to generate income growth, coupled by improved funding and liquidity positions, given the improved capital structure,” it said.

The group said that its resilient portfolio is diversified by geography, sector and asset class and, with its exposure to defensive, high-quality retail and residential, and complemented by premium-grade office developments, “is well-positioned to grow further as consumers and businesses seek quality and convenience in their work, home and play destinations”.

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