While JSE-listed Attacq, as a South African fund, will remain focused on local projects, it is also focusing on expansion into Africa where there are significant opportunities, Attacq CEO Morne Wilken said on Wednesday.

Addressing the media following the release of the company’s results for the six months ended December 31, he said Attacq believed that, with its Waterfall development, in Gauteng, it had captured most of the growth potential in the South African market and, thus, identified Africa as a space for further growth, noting that Attacq could gain first-mover advantage on the continent.

However, he added, “I don’t think we have captured all the growth potential [in South Africa] as we are not in areas such as Durban and Cape Town".

“In Africa, you are starting off a much lower base and, therefore, there is much more growth potential in those countries, as opposed to South Africa where we are working off a higher base,” he explained.

Attacq had a three-pronged approach with regard to investment in Africa.

Firstly, Attacq had African exposure through Atterbury Property group company Atterbury Africa, in which Attacq held a 32.4% stake.

Atterbury Africa focused on the development of retail centres in Africa and its properties included the completed, income producing, Accra Mall, in Ghana, along with four other retail developments, two of which were in Accra, Ghana, with another in Kumasi, Ghana, and one in Lusaka, Zambia.

Secondly, Attacq was investing in Mauritius where it, along with local partner ENL Group, owned the 44 500 m2 Mall of Mauritius and had a remaining pipeline of around 30 000 m2 of commercial bulk developments.

Thirdly, the company also held 12.4% in African Land Investments, which focused on acquiring completed retail assets and currently owned the Manda Hill shopping centre in Lusaka.

Wilken pointed out that, currently, Attacq’s exposure in Africa was focused on a few selected countries, explaining that once the company did a deal in a specific country, it would rather do a number of transactions there, as it had an understanding of the local market and created critical mass in terms of its developments in the specific country.

However, in future the company was also looking at opportunities in other African countries, such as Mozambique and Nigeria.

“Nigeria is a country that is interesting and one you have to consider. There are some challenges there but it is a country that we would like exposure in,” Wilken said.

Meanwhile, he pointed out that while African investments had significant growth potential, they also had a large risk profile, as opposed to international or developed markets that would give a more stable income.

Therefore, as part of its diversification strategy, Attacq was also investing in international opportunities through its 47.2% shareholding in property agency MAS Real Estate.

“We are seeing a recovery in European markets, which presents a good opportunity. Our investment in MAS provides a solid risk strategy and creates an important rand hedge,” Wilken explained.

During the six months ended December 31, the company’s investments into Africa had grown by 21% to R819-million and international investments increased by 19% to R1.07-billion.

SOUTH AFRICA
During the period under review, Attacq’s investment into South Africa grew by 11% to R8.5-billion, and Wilken reiterated that there was still potential in the country.

During the six months, locally, Attacq focused on consolidating the retail assets in its portfolio by acquiring the shareholding of the minority investors in its regional shopping centres including Mooirivier Mall, in Potchefstroon, the Eikestad Mall Precinct, in Stellenbosch, Brooklyn Mall, in Pretoria, and Garden Route Mall, in George.

Attacq also boosted its effective shareholding in Attacq Waterfall Investment Company, the company that held the development rights for the Waterfall Business Estate, to 85.9% and broke ground on the largest single-phase mall in South Africa, the Mall of Africa, which would be located in Waterfall City.

Wilken also pointed out that the Waterfall development offered Attacq a 15-year future development pipeline, which it believed was “a game changer”.

On Wednesday the company reported a 19.9% increase in net asset value a share to R12.89, while net rental income grew by 31.6% and the group’s asset base grew to R15.1-billion.

Wilken said that the company was pleased with this first set of results following its listing on the JSE in October last year.