The Government Employees Pension Fund (GEPF), represented by the state-owned Public Investment Corporation (PIC), has invested R2.8 billion to acquire 30% of property group Attacq’s Waterfall Investment Company (AWIC).<\/p>\n
AWIC is a wholly owned subsidiary of Attacq, holding Attacq\u2019s completed real estate portfolio and development and leasehold rights in Waterfall City in Midrand – including developments under
\nconstruction and leasehold land.<\/p>\n
The newly developed city, which is home to Mall of Africa, the PwC tower and a host of other new residences and office developments, is one of the fastest-growing precincts in the country.<\/p>\n
According to Attacq, the investment will be made through issuing new AWIC equity, acquiring AWIC shareholder equity and shareholder loans from Attacq, and the extension of an additional pro-rata shareholder loan by the GEPF.<\/p>\n
The conclusion of the transaction will result in GEPF owning 30% of AWIC for an estimated cash consideration of R2.8 billion.<\/p>\n
Attacq Chief Executive Officer, Jackie van Niekerk said the transaction aligns with the group’s strategy to optimise its capital structure and create the capacity to fund the Waterfall City development pipeline with no additional capital required from shareholders in the medium term.<\/p>\n
“Furthermore, Attacq will benefit from numerous cost savings and efficiencies, while retaining its important REIT status,” she said.<\/p>\n
Attacq will retain full control of AWIC through its majority stake and will continue to provide asset management and administration services to AWIC at market-related fees, the group said.<\/p>\n
Attacq Chief Investment Officer, Peter de Villiers said the investment is “a major affirmation of the quality of Waterfall City”.<\/p>\n
“We can now expedite the ongoing rollout of developments within Waterfall City as part of our precinct strategy, which focuses on creating a safe, smart and sustainable retail experience, collaboration and logistics hubs.\u201d<\/p>\n
The group said that the proceeds will be used to optimise the capital structure of both AWIC and Attacq by de-leveraging the group\u2019s balance sheet, enhancing the liquidity position of Attacq, and
\nimproving investment capacity.<\/p>\n
\u201cWe are truly excited about this milestone transaction for Attacq and Waterfall City. It also provides the GEPF with a unique investment opportunity in the co-ownership of a world-class city. Once implemented, Attacq will see its gearing reduce from 37.2% to c. 24.0% on a pro-forma basis providing the balance sheet to develop out Waterfall City.<\/p>\n
Attacq\u2019s capital structure will also be optimised, resulting in a reduced cost of capital, thereby enhancing returns for Attacq\u2019s shareholders. It\u2019s a win-win for all stakeholders,” the group said.<\/p>\n
The transaction is subject to the fulfilment of certain conditions, including majority shareholder approval.<\/p>\n
Waterfall City currently has a multitude of developments under construction, including the Ellipse residential hub, Nexus collaboration hub and expansions in the city’s logistics hub.<\/p>\n
The first phase – and first tower – of the Ellipse has been completed, with the second tower under construction and the third tower in the pipeline.<\/p>\n
Overall the group’s current construction profile has just over 39,000 square metres being built, with a completion value of R175 million. These developments are expected to be completed between the third quarter of 2023 and the second quarter of 2024.<\/p>\n