JSE-listed property developer Attacq on Monday said it was adopting an income distribution strategy, aimed at taking it one step closer to gaining real estate investment trust (Reit) status, which includes the reduction of existing debt facilities using the proceeds from the disposal of its Central and Eastern European investments.
The company said it would also focus on the continued optimisation of its balance sheet and the sale of certain noncore assets, where the deployment of the proceeds will serve to enhance sustainable and growing distributable earnings.
Attacq is aiming to achieve Reit status by July 1, 2018. In the financial year ending June 30, 2018, prior to becoming a Reit, Attacq will implement a dividend policy pursuant to which it will distribute its available funds.
Attacq CEO Morné Wilken said the Reit status formed part “of a bigger journey. We always had the plan to move from a capital growth to an income player. The timing, where we are now in the market, makes sense to do it”.
He added that Attacq aimed to have a “unique value proposition”, creating a Reit with a substantial pipeline, with its developments accretive to growth and distribution.
The company is targeting a maiden dividend payment from its income-producing assets, namely its existing quality operational portfolio and MAS investment, of 73c a share for the year ended June 30, 2018 with a 20% a year growth in its distribution for the next three years thereafter.
Attacq holds an operational portfolio of retail, commercial and industrial properties with a weighted average lease expiry of 6.5 years. One of its most valuable assets is its 80% interest in the Mall of Africa, the super-regional mall located at the centre of the growing Waterfall City.
Since listing, Attacq has completed 32 developments, with its portfolio growing 80% from R15.1-billion to R27.1-billion, including the Mall of Africa and 25 other developments in Waterfall, adding 434 154 m2 of gross lettable area to the portfolio.
Attacq is not currently receiving distributions from Att Africa, considering unfavourable trading and macroeconomic conditions impacting on the malls and the structure of Attacq’s investment in AttAfrica.
As at December 31, 2016, Attacq’s retail investments in the rest of Africa totalled R1.1-billion.
