JSE-listed Attacq and the Government Employees Pension Fund (GEPF) have closed a R2.7bn deal to fund the Waterfall City development pipeline in Midrand.
Shareholders voted 100% in favour of the deal concerning two resolutions tabled, at a general meeting held on Monday.
The GEPF, represented by the Public Investment Corporation (PIC), has acquired a 30% stake in Attacq Waterfall Investment Company (AWIC) — a wholly owned subsidiary of Attacq and the owner of Waterfall City. The PIC invests more than R2.5-trillion in government employee assets on behalf of the GEPF.
Attacq will continue to provide asset, property, development and fund management services to AWIC.
“The deal is a transformative transactio,n which will ensure the sustainability of the company’s capital structure in a high interest rate and uncertain environment,” Attacq CEO Jackie van Niekerk told Business Day.
Following the transaction, Attacq will have a stronger, deleveraged balance sheet and optimised capital structure to bolster both development opportunities and distributable income to shareholders, the company said in a statement.
In February, Attacq CFO Raj Nana said some of the funds had been allocated to Waterfall City to pay down debt, which will reduce the group’s loan-to-value (LTV) — a key measure of the financial health of a property company — from 37.2% to 24%.
Van Niekerk said the deal was positive news for the real estate investment trust (Reits) sector — which proves that there even in a difficult economic environment; there is capital chasing quality assets.
“We will work hard for this money as we take the responsibility that the GEPF has entrusted us with this investment very seriously.”
She said having a capitalised balance sheet in a high interest rates environment enables the group to unlock growth opportunities and weather the tough economic times.
“We continue on our purpose-led strategy of creating long-term sustainable value and will remain prudent in allocating capex to achieve returns for shareholders,” Van Niekerk said.
Attacq is a Reit with a diversified property portfolio that comprises the mixed-use Waterfall City precinct, Lynnwood Bridge in Pretoria, MooiRivier Mall in Potchefstroom and Eikestad Mall in Stellenbosch. It also has investments in Central and Eastern Europe through its 6% investments in JSE-listed MAS Real Estate. MAS provides the company with diversification and income yields north of 8%.
The deal first announced in February, comprises R2.4bn in cash and an extra R300m as a shareholder loan, and will provide Attacq with an investment partner to secure funding for the ongoing developments at Waterfall City.
Attacq has gone into joint ventures for the development of Waterfall City. To date, completed joint venture projects include the Waterfall Corporate Campus with Zenprop, the Cotton On head office and distribution centre with JSE-listed Equites Property Fund and the Vantage data centre with Vantage.
In its pre-close in June, Attacq said completed developments at Waterfall City included the Plumblink head office and distribution centre and phase 2 of the residential Ellipse Waterfall.
Attacq launched the development of three warehouses and ancillary offices at Waterfall City Logistics Hub, scheduled for completion in February 2024 in August.
The industrial hub is home to Cotton On, Vantage Data Centres, Cummins, Plumblink, Zimmer Biomet and Dis-Chem.
Attacq development executive David Oosthuizen said there was growing demand for quality and custom-built logistics facilities at Waterfall City due to its locality, with easy access to the N1 highway.
“The development of these warehouses is testament to our innovative and agile approach, which aligns to the needs of modern businesses,” Oosthuizen said.
Waterfall City, an established locality and one of SA’s fastest-growing work-live-play lifestyle precincts is seeing demand from pharmaceutical and technology companies, as well as logistics operators seeking centrally located logistics facilities.
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