Mall of Africa drives Attacq growth

Attacq, a JSE-listed Real Estate Investment Trust (REIT) that owns the Mall of Africa, has shown resilience in the face of a challenging operating environment. Despite facing political uncertainties in Africa, high global inflation, rising interest rates, and high unemployment rates, Attacq reported single-digit growth in its latest full-year results. The company's headline earnings per share increased by 8.3 percent, while gross revenue climbed by 5.5 percent. Attacq CEO, Jackie van Niekerk, attributes this growth to the team's ability to navigate the difficult landscape effectively. One of the key indicators of Attacq's performance is its decision to pay a dividend, despite the challenging conditions. Van Niekerk explains that while the company retained a dividend due to various factors, including the impact of COVID-19, as a REIT, they are required to distribute a minimum of 75% of their dividends to maintain their tax status. By rewarding shareholders with a dividend, Attacq aims to show gratitude to investors who have supported the company through the tough times. The office market, referred to as a 'collaboration option' by Attacq, has been particularly tough due to oversupply. However, the company has managed to attract quality clients such as Cisco, Amazon, Pfizer, and Ericsson by offering premium office spaces. Despite the challenging market conditions, Attacq remains focused on differentiating its product and providing high-quality office spaces to meet client demands. When asked about the timeline for the office market to rebalance, Van Niekerk estimates that it could take around two years, depending on the economy's recovery. The company is investing in developing its Waterfall precinct, with a focus on logistics and residential components. Over 200,000 square meters of prime logistics clientele have shown interest in the Waterfall development, highlighting the potential for growth in this sector. Inflation remains a significant factor impacting Attacq's operations. The company is implementing risk mitigation measures to navigate the challenges posed by inflation. While focusing on cost management and rental escalation, Attacq is also exploring opportunities beyond South Africa to maintain a balanced portfolio. The performance of the Mall of Africa has been a key driver of growth for Attacq, with trading densities improving by 12.6 percent. While the Mall of Africa serves as a catalyst for growth in the company's portfolio, the positive performance has been observed across various properties, from Cape Town to Pretoria. Overall, Attacq's ability to deliver growth in a difficult environment underscores its resilience and strategic approach to navigating challenges. With a focus on quality, differentiation, and prudent capital management, the company remains well-positioned to capitalize on future opportunities and drive continued growth.