JSE-listed real estate investment trust Attacq is planning to spend R3bn in the sprawling Waterfall City, where demand for space is spawning new opportunities.
The property developer plans to build a new data centre, a conference centre with an adjacent hotel, a new Gateway east office building to complement the existing west wing, and a 19-storey luxury residential apartment block.
Attacq CEO Jackie van Niekerk said the company had seen stronger demand for space at Waterfall City from all the main property sectors, including retail, commercial, office and logistics. It reported a high occupancy rate of 91.9% across its portfolio and a collection rate of 99.6%.
“We are really excited about our strong pipeline and the deals that we are working on. We see a great future for South Africa, hence a renewed focus on Waterfall City and our local properties.”
The 19-storey apartment building — Aspire Waterfall — to be built in collaboration with property developer Tricolt, is expected to launch in May. Attacq’s development executive David Oosthuizen said it would be the second-tallest building in Waterfall City and the tallest residential building in the area.
“We had hoped to launch the development sooner, but it is expected to still kick off during the 2025 financial year,” said Oosthuizen.
The company said its investment in Waterfall City was likely to reach R20bn over the next decade. Oosthuizen said there was a high demand for office space curated to accommodate hybrid work, especially from international companies with a presence in South Africa.
However, the company would not drastically alter its other office spaces to cater for these collaboration hubs.
“We cannot have a knee-jerk reaction every time there is a shift in the market. We will be here for 30 years, and the idea is to stay the same. However, we will be launching a new collaboration hub as well,” he said.
This week, Attacq delivered a strong set of results, with distributable income per share increasing by 49.1% year-on-year to 55c, and the interim dividend declared up by 46.7% year-on-year to 44c per share.
Van Niekerk said October, November and December sales were encouraging their commercial tenants. She attributed the increased spending on Black Friday and over the festive season to people using their two-pot system payouts.
Van Niekerk said they also benefited from a transaction in September when the Government Employees Pension Fund acquired a 30% stake in Waterfall City for R2.8bn.
Attacq revised its full-year shareholder guidance payout from 20% to anywhere between 24% and 27%.
Competitor Growthpoint Properties has set out to dispose of its noncore and high-risk assets across the country
Meanwhile, competitor Growthpoint Properties has set out to dispose of its noncore and high-risk assets across the country as it looks to improve the quality of its South African portfolio.
It has sold 12 assets, including two office blocks, for R589m, and is expected to sell up to R2.8bn worth of assets by the end of its 2025 financial year.
It said this was to exit deteriorating central business districts and nodes, while also disposing of assets that do not possess the future growth prospects expected by the company.
Growthpoint’s group CEO Norbert Sasse said a majority of the non-performing assets were in Gauteng.
“When it comes to offices in particular, Rivonia is an office node and is among those that have not performed in a long time. Places such as Sunninghill, Parktown and Midrand are also struggling, unless you are in Waterfall.”
Sasse said while they were selling off properties in other provinces as well, the highest number of the industrial, retail and office parks they got off their books were in Gauteng.
Between July and December, Growthpoint sold 151 on 5th in Sandton and the Pavilion Office Park in Rivonia, for a combined value of more than R94m. The company said these assets would be converted into residential properties by new owners. It also sold seven logistics and industrial properties in Vereeniging, Johannesburg, Midrand, Germiston and Kempton Park.
Sasse said while the sales were successful, the company could have negotiated for higher prices if the market was more buoyant: “It has been tough selling these properties. If the market was more liquid, we would have sold more than we have. Interest rates moderating, there is more liquidity but there’s not a lot of it.”
On Wednesday, Growthpoint reported that South African income rose by 6.2% to R2.9bn. Distributable income per share increased by 3.9% to 74c for the six months ended December. Its dividend per share increased by 3.7% to 61c. Growthpoint attributed this to an improved performance across its local portfolio.
The V&A Waterfront continued to thrive, with its December retail sales reaching R1.4bn.
“The performance of the South African portfolio largely contributed to the positive results we are seeing in the half year,” said Sasse.
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