“Good headroom for growth” for MAS Real Estate Inc.

Morné Wilken, CEO of Hyprop.
Morné Wilken, CEO of Hyprop.
  • Distribution per share of 3.58 euro cents per share proposed.
  • 9% increase in EPRA NAV per share.
  • Strong balance sheet with €387 million of equity available for investment.
  • Growing pipeline of investment and development opportunities.

MAS Real Estate Inc. has reported strong results for the six months ended 31st of December 2017. MAS achieved distributable earnings of €17.1 million for the six-month reporting period, a growth of 98% relative to the comparative period in the previous financial year.

The Board of Directors has proposed a distribution of 3.58 euro cents per share in respect of the first half of the 2018 financial year, representing an increase of 34.6% over the comparative period in the previous financial year.

CEO, Morne Wilken comments:

“The improvement in distributable earnings was driven by the full period effect of accretive acquisitions, completion of developments and the deployment of capital into PKM Developments. The team’s focus on active asset management and extensions to unlock additional value and we expect this growth to continue over time.

We successfully disposed of some high valued assets, which allows for the reinvestment of capital into new growth opportunities across CEE and western Europe.”

The acquisition pipeline under due diligence, across both western Europe and CEE, totals in excess of €400 million. Substantial acquisitions are expected to complete within the next six to twelve months.

Mitigating the group’s future funding obligations in relation to PKM Developments has been a strategic priority. Accordingly, the group took advantage of the opportunity to raise adequate equity to fully meet its commitments to PKM Developments and to finance suitable acquisition opportunities.

“MAS has a strong balance sheet and with gearing at 25.8%, excluding the cash on hand, we have good headroom for growth. Our aim is to gear the overall portfolio to approximately 40% LTV and deploy our balance sheet to develop and acquire dominant assets in strong locations within CEE as well as undertake opportunistic developments and investments in Western Europe. Having said this, we will also look to recycle capital in Western Europe when the opportunity arises,” says Malcolm Levy, CFO of MAS.

Given the substantial acquisition and development pipeline in place and further opportunities being pursued, the board is confident that the group is well placed to achieve its targeted distribution per share growth of 30% per annum until June 2019, on the assumption that a stable macro-economic environment will prevail, that no major corporate failures will occur, that the investments and developments reported on above will progress in accordance with expectations, that budgeted rental income based on contractual escalations and market related renewals are collected.

“Our solid income producing portfolio and development pipeline underpins our objective of delivering high quality and growing distributions on a sustainable basis over time. The retention of investment discipline is core to our business and investment decisions will be made taking a long-term, sustainable view rather just meeting short term distributions. Our future pipeline remains strong and our expansion strategy is on track,” concluded Wilken.