Our opinion on the current state of ATT

Attacq (ATT) is a BEE level 2 property developer that converted to a real estate investment trust (REIT) in May 2018 and has been listed on the JSE since 2013. It is the owner of the Mall of Africa in Halfway House and the developer of the Waterfall City complex. It is now building the Ellipse Waterfall residential high-rise, which will have 590 apartments priced between R1,5m and R12m. Overall, Waterfall City is expected to consist of over 1 million square meters of multi-use space over the next 5 to 10 years. In its results for the six months to 31st December 2022 the company reported distributable income per share up 27,3% and headline earnings per share (HEPS) down 47,4%. The company's net asset value increased 3,1% to 1735c per share. The company said, "The distributable income from Waterfall City increased by 50.0% to 21.0 cps (31 December 2021: 14.0cps) and the distributable income from the Rest of South Africa increased by 37.7% to 10.6cps (31 December 2021: 7.7cps). These increases are mainly due to higher rental income from newly completed developments and the existing completed portfolio, the Cell C arrears which was settled in cash as well as lower finance costs". In a trading statement for the year to 30th June 2023 the company estimated that dividends per share (DPS) would be 16% higher than in the previous year. The share was trading at 825c on 13th September 2023, at which level it was less than half of its NAV. In our view, this REIT, at the current price, represents one of the better property investments on the JSE at the moment and very good value.