Our opinion on the current state of MSP

MAS (MSP) is a real estate investment trust (REIT) which invests in office, commercial, logistics, retail, and hospitality properties in Europe and the UK. This REIT was started by Martin Slabbert and Victor Semionov who are well known for establishing NEPI - which merged with Rockcastle. They are very highly regarded as European property experts. The company is involved in a program to "restructure and grow" its balance sheet. This was to be done by selling properties in Western Europe and buying income-generating properties with good growth potential in Central and Eastern Europe (CEE). The company has tripled the size of its asset base since 2016. In its results for the six months to 31st December 2022 the company reported distributable earnings per share up 14,3%. The company said, "Trading and footfall in the Group's properties in CEE were exceptional for the six months to 31 December 2022, and were unaffected by social distancing or other Covid-19 related trading restrictions. As a result, collection rates were exemplary and the Group did not provide any support to tenants (deferred or waived rentals)". In a pre-close update for the year to 30th June 2023 the company said, "Overall like-for-like ('LFL') footfall for the five months to 31 May 2023 was 11% above the same period in 2019, and tenants' turnovers per m2 significantly exceeded pre-pandemic levels by 29%, both in enclosed malls (31% increase) and in open- air malls (28% increase)". In a trading statement for the year to 30th June 2023 the board has decided not to pay out a distribution, but to retain the distributable income to strengthen the balance sheet. In a trading update for the six months to 31st December 2023 the company reported, "Overall like-for-like ('LFL') footfall for the four months to 31 October 2023 was 8% above the same period in 2022, and tenants' sales per m2 exceeded prior year's levels by 7%, both in enclosed malls (8% increase) and in open-air malls (6% increase)". In our view, this is one of the better REIT's on the JSE and well-worth looking at if you want to buy a property stock in the rapidly expanding European property sector. Obviously, it is a rand-hedge, and it is trading just below its net asset value (NAV). On 25th January 2021 the Business Day reported that the Oppenheimer family had acquired a substantial stake in MSP for approximately R500m. When and if the Ukraine crisis is resolved we see this share recovering rapidly.