Attacq Limited has recently announced a strategic move in the acquisition realm. The company, listed on the Johannesburg Stock Exchange (JSE) under the code ATT, is set to acquire the remaining 20% undivided share of the leasehold rights and rental enterprises in the prestigious Mall of Africa. This acquisition marks a significant milestone in Attacq’s journey, aligning with its core strategy of investing in precincts it owns and controls.
Understanding the Transaction
The transaction involves Attacq Waterfall Investment Company Proprietary Limited (AWIC), a subsidiary of Attacq, acquiring the 20% share from the Seller. Upon completion, AWIC will become the sole owner of the Mall of Africa, a premier super-regional mall located in Waterfall, Gauteng.
Rationale and Strategic Alignment
Attacq’s decision to acquire the remaining share in the Mall of Africa is strategic and well-aligned with its overall investment approach. The Mall of Africa, anchored in Waterfall City, has been a strong performer in South Africa’s retail landscape. With a compounded annual trading density growth of 16.1% over the past three years and a healthy rent-to-turnover ratio of 7.5%, the Mall continues to demonstrate robust performance metrics.
Financial Considerations
The purchase consideration for the 20% share amounts to R1,070,000,000, offering an initial forward yield of approximately 8.0%. This valuation represents a discount of 7.7% compared to the independent external market valuation as of 31 December 2023. Such financial prudence reflects Attacq’s commitment to value-driven acquisitions.
Table: Financial Snapshot of Mall of Africa
| Aspect | Value |
|---|---|
| Gross Lettable Area (GLA) | 129,418 m² |
| Weighted Average Rental (Rand per m²) | R323.91 |
| Valuation as of 31 Dec 2023 (R’000) | R5,794,958 |
| Net Profit (20% share) for H2 2023 (R’000)* | R74,389 |
*Net profit excludes interest as no debt is assumed in the transaction.
Conditions Precedent and Regulatory Approval
The acquisition is subject to fulfilling certain conditions precedent, including obtaining consents from mortgage bondholders, the head landlord, and securing unconditional approval from Competition Authorities within the stipulated timelines.
Illustrating Growth Potential
The Mall of Africa’s strategic location within Waterfall City positions it favorably to benefit from ongoing developments in the area, including residential, logistics, and collaboration hubs. This growing ecosystem contributes to the mall’s continued densification and overall performance.
Conclusion
Attacq Limited’s acquisition of the remaining 20% share in the Mall of Africa underscores its commitment to strategic investments and value creation for shareholders. The transaction not only consolidates Attacq’s position in a high-performing asset but also reflects confidence in the long-term growth prospects of Waterfall City and the broader South African retail sector.
