Keenly awaited Attacq set to list
Keenly awaited property developer opts not to follow the Reit route
ATTERBURY Group’s Attacq, which is seen as the most keenly awaited property listing in recent years, is expected to list on the JSE on October 14 with a market capitalisation of R8.5bn.
ATTERBURY Group’s Attacq, which is seen as the most keenly awaited property listing in recent years, is expected to list on the JSE on October 14 with a market capitalisation of about R8.5bn.
The property developer, formerly called Atterbury Investment Holdings, has opted not to list as a real estate investment trust (Reit) given that it is a capital growth fund, which means its income is reinvested and not paid out to shareholders, as is the norm across the sector.
The Reit structure, which most listed property funds have already or are converting to, requires funds to pay out at least 75% of their distributable earnings to shareholders.
With a market capitalisation of R8.5bn, analysts say Attacq will likely be the largest property listing in absolute terms and among the largest in real terms.
Attacq, whose asset base was valued at R12.5bn in March, retains its developments rather than selling them.
Among its developments is its long-term Waterfall project, a development that links Tshwane and Johannesburg and includes 1.73-million square metres of developable land.
This includes the 116,000m² Mall of Africa and the Waterfall Business Estate, which will be rolled out over the next 10 to 15 years. Projects coming to completion this year include the 44,200m² Cell C campus and the 23,000m² new Group Five head office. Attacq’s South African portfolio includes the 74,000m² Lynnwood Bridge mixed-use development, the Garden Route Mall, a 75,000m² mixed-use development under construction in Newtown, Johannesburg, and through its 81.95% holding in Attacq Retail Fund, the Mooirivier Mall, the Eikestad Mall and an interest in the Brooklyn Mall.
The company’s African portfolio includes prime Mauritian assets and a 32.5% stake in Atterbury Africa, which invests in retail centres and developments in the rest of Africa.
Meanwhile, Attacq’s holding in AltX-listed MAS Real Estate gives it exposure to investments in Germany, Switzerland and the UK.
CEO Morne Wilken said yesterday that Attacq aimed to raise up to R800m through a private placement prior to listing.
Mr Wilken said the company’s long-term strategy was to have 70% of its asset base by value in SA, 20% in the rest of Africa and 10% offshore.
Andrew Brooking of Java Capital, which is managing Attacq’s book build, said Attacq was expected to “substantially outperform” other listed Reits, which were no longer being fuelled by declining bond and interest rate yields.
As the company was not a yield-generating investment, it would also be much less susceptible to bond yield volatility — which has plagued the rest of the sector for months.
Mr Brooking said the hefty scale of Attacq’s developments “is unique”, and said the company had a long track record and held “standout assets”.
Anton de Goede, fund manager at Coronation Fund Managers, said as Attacq was not a traditional yield-producing property investment, “one should just have a different approach in valuing the company”.
Investment decisions should be based on net asset value (NAV) and potential NAV growth, as was the investment case for the London-focused Capital & Counties Properties (Capco), Mr de Goede said.
Capco, which has a listing on the JSE, has driven its share price through growing the value of its assets via developments and asset management strategies.
“Like we do with any other listing, we will go through the details and decide whether we want to invest or not. But Attacq does provide a different angle, which is an interesting one, and management has proven itself in creating value over the past few years through its development pipeline,” he said.
Looking ahead, Mr de Goede said investors could reasonably expect that “value creation should continue”.