Attacq Delivers Strong Results from Waterfall City

The owner of the Mall of Africa and developer of Waterfall City delivered another year of strong growth. Normalised distributable income per share (DIPS), an important measure for property investors, increased 15.5% to R1.25. The full-year dividend increased 17.2% to R1.02. Both figures were ahead of Attacq’s guidance and better than the results of most listed property companies. However, growth slowed from the unusually strong increase of more than 25% in FY2025. This slowdown was broadly expected by the market.

The result was supported by regular rental increases, higher occupancy of 94.9%, income from newly completed Waterfall City projects, lower borrowing costs, and higher savings from the company’s growing rooftop-solar operations. The new projects included the Vantage data centre and the Galileo residential tower.

Looking ahead, investors should take note of Attacq’s more moderate 2027 outlook. Management expects DIPS to grow 6% to 9%. It also warned that higher oil prices linked to tensions in the Middle East, inflation, and interest rates could affect the property sector. Management believes Attacq’s strong balance sheet will help it manage these challenges.

Key Financial Metrics

●     Gross revenue: R3.13 billion, up 9.3%.

●     Normalised DIPS: 125.1 cents per share, up 15.5%. This is the main measure of the income available for distribution by a property company. Growth was 25.6% in FY2025.

●     Reported distributable income per share: 127.1 cents, up 17.4%.

●     Dividend per share: R1.02, up 17.2%.

●     Earnings per share: R2.06, down 3.8%. This decrease was mainly due to smaller increases in the estimated value of the properties compared with the previous year.

●     Net asset value per share: R20.04, up 5.8%.

●     Total assets: R26 billion, up 5.8%.

Analysis & Outlook

Share Price Performance

The share price is currently trading at around R17.20. It has increased by approximately 52% over the past 12 months and is up about 5% since the start of the year.

What Could Potentially Move the Share

Upside

●     More leasing and new projects at Waterfall City: Filling the remaining vacant space and receiving a full year of income from Vantage and Galileo could increase operating income and DIPS.

●     Lower interest rates: Borrowing costs have already fallen to 8.7%. Further interest-rate cuts by the South African Reserve Bank could reduce finance costs and support property values.

●     Development pipeline: Attacq has an 85 247 square metre development pipeline. Together with the Waterfall Junction joint venture with Sanlam Properties, this gives the company several potential sources of future growth.

●     Solar power and utility savings: More solar capacity, now at 18.5 MWp, could improve cost recoveries and profit margins. It may also reduce the impact of electricity shortages and higher energy costs.

Downside

●     Slower growth: Attacq expects DIPS to grow 6% to 9% in 2027, well below the 15.5% growth achieved in 2026. Investors may need to adjust to this slower pace.

●     Economic and interest-rate pressure: Management has warned about higher oil prices linked to the Middle East, inflation, and interest rates. If interest rates stay high for longer, borrowing costs could remain high and put pressure on the property sector.

●     Dependence on Waterfall City: Attacq relies heavily on the Waterfall City development. If demand for space in the area weakens, it could affect a large part of the company’s portfolio.

●     More cautious consumers: Trading-density growth slowed to 3.7% from 5%. This may potentially indicate that consumers are becoming more careful with their spending at shopping centres, including Mall of Africa.

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** This article was prepared by BROKSTOCK analyst Maboko Seabi