Construction World November 2015

PROPERTY

As a capital growth property fund Attacq is unique as its performance is measured by growth in NAVPS over the long term. Attacq’s solid set of results show its net rental income increased by 47,6% to R954,1-million during the year, its asset value was boosted by 26,2% to R23,3 billion, with the size of its portfolio growing by 45,1% to over 565 000 m 2 of quality, investment-grade commercial real estate. Of this, an impressive 80,2% is green, energy-efficient business space. Attacq’s share price grew 25,3% during the year, resulting in its market capitalisation of R16,6-billion at year-end. Morné Wilken, Attacq’s CEO, says this strong performance can be attributed to healthy income growth in Attacq’s core portfolio, the SOLID GROWTH Attacq Limited, the pioneering JSE-listed capital growth property fund, recently posted growth of 20,6% in net asset value for shareholders and growth in adjusted net asset value per share (NAVPS) of 17,9% for its full financial year to 30 June 2015. >

performance of MAS Real Estate Inc. and the ongoing delivery of its excellent development pipeline, with Attacq completing a remarkable 13 new developments during the year. Attacq alsomade excellent strategic progress including the astute management of its funding, which diversified its funders by adding Absa to its funding mix and reducing its weighted average cost of debt to 9%. Its overall gearing increased marginally to 36%. With the head- winds of a rising interest rate environment, during the year it increased its level of fixed interest rate debt significantly to 75% from 63%. Wilken reports that Attacq is also set to embark on a strategic programme to recycle capital, disposing of lower-growth mature assets and investing its capital astutely to fund higher-growth opportunities. Wilken comments: “We are pleased to report a robust set of results which extend our growing track record of delivering sustainable capital growth for our investors. Property is a long-term asset and as a capital growth fund Attacq is in a unique position to take a long- term view to invest, develop and grow. Since listing in October 2013, Attacq has delivered a compound annual growth in its share price to investors of 23,7%. Despite a tough operating environment in our main market of South Africa, we are confident we will continue

Morn é Wilken, Attacq’s CEO.

to build on our performance in the coming year.” Attacq invests in income-generating and development real estate opportunities. Its income-producing assets include directly and indirectly held properties which provide stable income and balance sheet strength to respon- sibly secure and fund high-growth opportunities within developments. Attacq unlocks value from its developments – including undeveloped land, greenfields developments and redevelopments – by partnering with respected developers. In this way Attacq benefits from the full upside potential of its developments.

‘OPERATION MILLION MEGAFACTOR’ AWARD WINNER Efficiency, pro-activeness and service delivery are the watch-words if you want to reach the top of your game as a commercial real estate broker in South Africa – it’s not about talking the big game, it’s about doing it.

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the commercial centres of the CBD, Salt River and Sea Point – and we’re seeing everything from mining companies to agricultural headquarters moving into the city. “It’s exceptionally good for Cape Town because we’re able to offer the service package that goes with the sort of properties that commercial enterprises demand.” Shapiro, who has been involved in property since 2005, says Lew Geffen Sotheby’s International Realty’s Commercial Brokerage in Cape Town, where he works under his mentor and CEO Anton Koetzee, deals with everything from shop fronts to office space to warehouses. The bulk of his business is with larger property funds, although there are a number of independent landlords in his portfolio. And Shapiro’s advice to landlords? “Offices do best because there is a lot of demand. We do many evalua- tions for landlords and always advise them not to look at breaking the bank, but to keep prices market-related and vacancy levels low. You have to offer a strong value proposition.” According to SAPOA’s Office Vacancy Reports and comparing office vacancies in the Cape Town CBD year-on-year, the second quarter of 2015 shows a vacancy rate of 11,7% against a 13,9% vacancy rate for the same period last year. Shapiro says ultimately the more professional the landlord, the easier it is to fill the space and keep it filled long term. Jason Rohde, CEO of LewGeffen Sotheby’s International Realty, congrat- ulated Shapiro on the Growthpoint Operation Million Megafactor Award. “Cape Town as a commercial centre is growing at a phenomenal rate, but just as with residential landlords, it pays in the long run for commercial property funds and landlords to work with companies such as Sotheby’s that have established national infrastructure behind them,” he says. “Sotheby’s has a vast national and international marketing network and we are therefore able to secure top-class tenants, as well as to provide the subsequent services that companies such as Growthpoint demand of their brokers.” Rohde predicts that commercial property development in Cape Town will continue to grow apace, because many companies want to be situated where they can rely on services. “Ultimately time is money, and the less down time you spend as a business, the greater profits are likely to be.”

That’s according to Chad Shapiro, the Cape Town-based LewGeffen Sotheby’s International Realty commercial broker who won this year’s Growthpoint Operation Million Megafactor Award and is the country’s top commercial broker. Growthpoint Properties Limited is the largest property investment holding company listed on the Johannesburg Stock Exchange. Says Shapiro: “We were competing against the whole country for the award and we won for the biggest property deal with South Africa’s biggest commercial broker, and as a province. I’m elated, because a decade ago >

this sort of award would have been extremely difficult to win if you weren’t based in Gauteng. “It’s possible now because so many people are moving their companies out of the country’s economic powerhouse and they’re coming to the Cape. Realistically with the communication channels that the internet allows nowadays, you can run a business from just about anywhere. “I work with a lot of high-end stock fromWoodstock to Camps Bay in Cape Town – an area that takes in

Chad Shapiro, the Cape Town- based Lew Geffen Sotheby’s Inter- national Realty commercial broker.