Rental relief of R53.8m hinders Attacq’s distributable income

Nexus Waterfall, Waterfall City.
Nexus Waterfall, Waterfall City.

Attacq Limited released its financial results for the six months ended on the 31st of December 2020, reporting a 57.5% decrease in distributable income per share.

The decline was attributed to R53.8 million in rental discounts granted and MAS Real Estate not paying a dividend for the period given the uncertainty surrounding Covid-19. In the comparative period, a MAS dividend of R121.2 million was received.

The rental relief Attacq provided to its tenants continued into the 2021 financial year, mainly supporting gyms, restaurants, cinemas, and hotels in the South African portfolio which were more severely affected by the lockdown restrictions.

2020 was an extraordinary year with significant uncertainty, resulting in continued pressures on the overall economy and property sector” commented CEO, Melt Hamman. “However, Attacq’s diversified and quality property portfolio and diligent capital management plus its debt reduction plan has supported us during this period and will ensure the company is well-positioned to benefit from a future recovery.”

Attacq management’s focus has been on the group’s liquidity and capital structure. Available liquidity as at the 31st of December 2020 improved to R1.3 billion (30th of June 2020: R1.1 billion) and an interest ratio cover (ICR) of 1.40 times was achieved.

The local portfolio improved the occupancy rate of 96.4% compared to the 93.6% as at the 30th of June 2020 with rental income declining by 1.3% to R1.12 billion.

Our client-centric, proactive, and collaborative approach allows us to listen with understanding and therefore enables us to provide bespoke solutions to our clients’ unique business needs. At Attacq, we pride ourselves on providing an authentic client experience to create sustainable value for all our stakeholders. This is reflected in our clients’ willingness to remain within our portfolio and high occupancy rates,” said Jackie van Niekerk, incoming CEO of Attacq.

Attacq’s newly let spaces attracted tenants like Boehringer Ingelheim, Auditor-General of South Africa, FNB and Cotton On with the Mall of Africa welcoming Gap, Kauai, Paul’s Ice Cream, Hydraulics and Yokico.

Waterfall City remains a key driver in Attacq’s core business. For the six months under review, one midi warehouse of 4 603m2 gross lettable area (GLA) was completed, with the Nexus Courtyard Hotel, Building 4 at Corporate Campus and 269 residential units under construction at period end. The Courtyard Hotel opened for trade on the 1st of March 2021 whilst the first two towers of Ellipse, Newton, and Kepler, are expected to be completed by the end of May 2021 with transfers commencing before the end of June 2021.“The developments at Waterfall remain a strong proposition for all stakeholders and Attacq continues to see healthy levels of enquiries for quality safe, sustainable spaces,” commented Hamman.

The group reduced its shareholding in MAS post period end, disposing of R885.1 million MAS shares resulting in Attacq’s shareholding in MAS decreasing to 10.9%.

Our strategic focus on capital management and liquidity to improve our debt capacity has been a key priority for Attacq. The disposal proceeds will be deployed towards paying down our interesting-bearing debt, reducing our euro debt and funding upcoming development opportunities. Attacq is currently trading under cautionary relating to the proposed disposal of an investment property; the proceeds of which will be utilised to further reduce debt” comments CFO, Raj Nana.

To support the preservation of liquidity, the board resolved in June 2020 not to pay a final dividend for the year ended 30 June 2020, nor an interim dividend for the first half of the 2021 financial year.