Attacq Limited (ATT) Earnings Call Transcript & Summary

Good morning to everyone. A special word of welcome to our Board Chair, Pierre Tredoux, our Audit chair Stewart Shaw-Taylor and as well as Allen Swiegas, our Board member. To all of you out there, our colleagues and also what I call our intercloud, our few Attacq colleagues joining us in person here today. We are joining you today from Maxwell Office Park, and Giles just reminded me that Maxwell Office Park was the first buildings built as Waterfall as idea and a conception. He said to me when the first 2 buildings were built, there were still cows on the farm walking. And that -- those days, Waterfall was a dream. It was an idea on paper. And we said priority year today from Waterfall Maxwell Office Park, from the vision where it started, presenting a city that is working, that's living, and we're very proud to share today what we've done over the last few years. Today, on the agenda, I'm going to give you an overview of the performance and just really a summary on our strategy and where we're going to refocus as a company. Michael Clampett, our asset management executive will go into the completed portfolio of the South African portfolio. Giles will talk about Waterfall City and the development [ beat ] on other investments, which is MAS and the retail in Rest of Africa. And then Raj will give us an overview on the financial results for the year. If we stand still and we reflect over the last 12 months, and I almost want to say, we reflect back over the last 18 months of what's happened. We really set ourselves a quite a task as management to say -- to get through the uncertainty of the last 18 months, liquidity in our gearing was at most [ sub ] front and center of importance for us to execute. Today, we sit back and we reflect of ZAR 2.8 billion of capital recycled in our portfolio as well as ZAR 1.7 billion of liquidity, which has improved from 1.1% from last year. We certainly can say that we have improved our capital structure over the last year. Our strong operational performance is evident of our quality portfolio with distributable income in our South African portfolio contributed 22% of the growth or it increased. Collection rates, 101% and then our occupancy levels improved to 95%. The Waterfall developments, we've completed 5 buildings for the year, and we've got 5 buildings currently under construction, of which it's close to, in total, 47,000 square meters of bulk under construction, of which is very notably a data center that we're currently constructing and also further distribution centers that we are seeing a very much a big flavor of the market at this stage. And Giles will certainly share more of our residential developments and the new residential developments we have launched over the year. We've also, over the last 18 months, learned as a business to embrace business disruption. Not to shy away from it, but really understand where the market is moving to. With this, we had to really sit back and understand what as a client, what do our clients really want from us? What is our client value proposition we offer to our clients? In the past, we've been all landlords and developers, a race for space, race for tenants in a fiercely competitive environment. But at this stage, anyone can work from anywhere. Hybrid working is the flavor, we can shop online. And we, as Attacq has really introduced -- or going to introduce new concepts of how do we interact not only with our clients but really address consumer behavior. We have summarized as a team to really look at what is the real value proposition we offer to our clients? It's community, it's experience, it's convenience, it's data, it's collaboration. And we've seen over the last year, where global corporates are saying, we need office space for collaboration. We need office space where people can generate ideas. We need it for projects but people can also work from anywhere, if they need quiet time to work. And hence, in Attacq, the value proposition we are bringing is our precinct hubs. When we stand back and we say, what is our client value proposition? We really think that our purpose in Attacq, to create safe and sustainable community sites, is providing a remarkable experience in our managed precincts really sets us apart from the rest. Our focus is to think differently about real estate through our quality-focused hubs, including Waterfall City, as a safe, smart and sustainable precinct. We also drive the enhancement of our business by putting people first and in our environment. And we're really looking at finding the opportunity that there is between the real estate, innovation and technology. We've also seen that how important our capital structure is for us and really enables us to do the things that we want to do and develop Waterfall City into a world-class precinct. Equally as important, our capital structure is in our people. And allow me to stand one moment at still and say just thank you to all the Attacq staff. I sent a message this morning just saying to the staff is we've really grown as a company and really deepened the roots of all the storms that we've seen over the last 18 months. But as a company, we stand proud and it's once again thank you to the people in Attacq. We are [ appended ] by our ESG as we believe as a company, we need to leave the world a better place than what we found it, and we're integrated with innovation and technology and embracing the change of what is to come and interacting in a different way in the real estate industry. Our focus areas have also changed. Historically, we would have presented on the 4 key drivers of Attacq, which is the SA portfolio, developments at Waterfall, MAS real estate and the Rest of Africa retail. Over the last year, as all of you know, we have considerably sold off our MAS holdings from over 20% holding to a 6.5% holding. And we've also communicated the intention to exit the Rest of Africa retail. Hence we've sat back and said, why don't we change our approach in the way we approach our business. Now we report on Waterfall City, which is our land and our completed buildings. We look at the rest of South Africa, which is our rest of our precincts. And the other investments, which is not -- which is a much smaller component of our portfolio, but very much an important portfolio -- part of our portfolio still. Our debts for the year is that, as we've communicated yesterday in our trading statement, at 46.8%, which is down because of no MAS dividends received for the year. And I think very important to note that we still comply with all our REIT regulations, and Raj will give us a bit more feedback on that today. The value of the portfolio 22.6%. And as you can very much see that Waterfall City plays an incredibly important part of the story and the future of Attacq. The rest of the portfolio of 31.3%, our retail precincts and our mixed-use precincts. And if you think about Attacq, you should think about a quality South African precinct focus, where we develop, we think about real estate differently and we interact with our clients in a way to understand their needs. I'm going to ask Michael now to tell you more about our hubs, our collaboration hubs in order for us to deliver on the said strategy. Thanks, Mike.

Thank you very much, Jackie. I'm really excited to introduce the concept of precinct hubs to grow our investor base. So if we look at our South African portfolio, like any building, I think a strategy needs to be underpinned by a good foundation. If you look at our foundation or philosophy when it comes to precinct hubs, we say our precinct hubs are smart, safe and sustainable community spaces and that guides us in all decisions that we make in terms of the asset and property management of this business. Malls are being transformed, we know that. There's a lot of disruption happening in retail. And we say, malls should be a place where you've got a good experience. It should be a community for those that it serves. And hence, we refer to our malls now as retail experience hubs going forward. Office spaces have seen a lot of disruption as well, the work-from-home phenomenon. We also follow the hybrid working model closely. The one thing that's come out is that offices are really needed for collaboration. In the future, we're going to refer to our office space as collaboration hubs. And that's going to form part of our philosophy in terms of the deal making, but also the infrastructure that we provide to those that want to use our collaboration hubs. In the logistics space, we think logistics and distribution become really important. Also, what we've seen in the past is Attacq has a lot of success combining some office space with that. And really, we are focusing on logistics obviously in Waterfall, which is perfectly situated geographically to cater for any need that a corporate might have when it comes to logistics. There are 4 pillars to this underlying strategy. We make sure that in everything we do, there's some operational sustainability that goes both inwardly, whether it's greening, we look at the sustainability of electricity, water, what we do with waste, but also the sustainability of our clients that work and live in these buildings. There's a big community focus. Our buildings serve communities in which they are situated. The integrated digital platform is important. We embarked on this journey in 2020. We are now seeing through that strategy and adding to it, ensuring that all the data points that we collect in Attacq are accessible in a centralized way to facilitate decision-making and quick action. The client experience, or CX journey, we initiated in 2019. It's gained a lot of traction within Attacq, specifically the asset and property management teams. And we've had a lot of good feedback about this, and we are continuing to support the client experience in each one of our assets. If we look at the overall performance and the results of the South African portfolio, collections in total of 101.5%, beating the threshold, some of that coming from collections that were left over from the 2020 financial period. Our client retention rate is high at 85%. Proud to say that the Garden Route Mall has been fully let since November 2020. Certainly in the current economic environment, that's a magnificent achievement. The occupation rate quite high at 95.2%. If you compare that to the industry metrics, we've had good renewals, both inside Waterfall City, but also outside Waterfall City in the rest of South Africa portfolio and will continue to be long because of the new nature of most of our buildings. Just touching on valuations quickly. The table at the bottom explains what happens in our valuations over the last 12 months. Most of the movement in the values in both the retail experience hubs and the collaboration hubs were due to input assumptions on market rentals being softer. Those are some assumed market rentals that are determined by the value of themselves and also a more conservative view on the long-term vacancy rates based on current evidence in the market. So as we know a lot of vacancies currently specific in the collaboration hub market, and the value has took that into consideration when doing these valuations. From an occupancy point of view, at 30th June 2021, we had an occupancy rate of 95.2% in total for the portfolio. If we also include all the leases that were concluded prior to 30th June, that number jumps to 96%, which I think is a wonderful result. You will see that the occupation rate within Waterfall City quite high, both for the retail experience hubs and also the collaboration hubs with some renewals or nonrenewals outside of Waterfall in the collaboration hubs. I'm also glad to say that most of those spaces have, of course, been filled when it was a nonrenewal. Just talking about the expiry profile, this is quite an important aspect to talk about when we talk about an economy that is a bit softer. What you will see here is that we had a success rate of 85%. That's broken down into about 92% success rate on expiries for the retail experience hubs and about 58% success rate for the collaboration hubs. On those leases that were renewed, we had a 15% reversion for retail experience hubs and a 26.6% reversion for collaboration hubs. That was in total. Important to also note that the escalation rates are still healthy, they're 5.9% for the retail experience hubs throughout all those renewals and the collaboration hub, just to note, that was impacted by the renewal of SARS at Brooklyn Bridge. And because of the first year not having an escalation, the escalation rate is artificially lower. Raj will talk a bit later about the remissions and some of the deferrals and discounts that we gave during the financial period. What I want to highlight in this slide is just some more color and context. So of the retail experience of discounts that we gave about the 71,000 -- or ZAR 71 million worth of discounts, about 68% of those discounts all occurred prior to 30 October 2020. Why do I mention that? Really, it was front-loaded, the initial stages of the pandemic, and we've seen a lot more resilience from all of our clients in the retail experience hubs. Turnovers are coming back and thus the rental levels are proving to be affordable. And so not a lot more discounts prior to that period. If you look at the total number, about 35% of our discounts also going to restaurant tenants, of course, being impacted by lockdown regulations and not being able to serve food or alcohol. On the nonretail discounts, those are mostly related to logistics hubs clients, where their main business is strictly related to retail. So in those instances, some discounts were granted. And on the deferrals, those were mostly related to our hotel portfolio. On the collections standing still, once again, the retail experience hubs collecting 104%. The rest of the portfolio collecting 108% of total collectible billings for the financial period, getting us to a total of 101.5%, which we are extremely proud of. And once again, Jackie mentioned our team earlier, a big congratulations to everyone involved in this. It really is a mammoth effort and it's definitely not going unseen. Just pausing at our retail experience, our portfolio for one second, you will see in the doughnut on the left, the breakdown between the different categories, super-regional, regional, convenience and neighborhood in terms of value. We had 2 big renewal cycles in this portfolio for this reporting period. One was at Garden Route Mall, which was in September 2020, the other one was at Mall of Africa, where we had the first 5-year renewal cycle that started in April of 2021. And certainly, having a retention rate of close to 92% is a significant achievement in the current environment. From a trading density point of view, a slight decline of 0.4%. That is premised by the trading density calculation of the previous reporting period. If no turnover was generated on GLA, it was excluded from the calculation. In our estimation, a much fairer calculation in terms of comparing a like-for-like and hence, the slight decline. If we look at the gross turnover or the gross economic activity, we've definitely seen an increase, and we'll see that in a graph a bit later. Just exciting to also say that physical retail definitely isn't dead. It's not even stuttering. I think it's going really well. Specifically, if you look at some of our assets, we're introducing some new brands to Mall of Africa. Most of them are opening between September and November in this year. Some international brands, also some local favorites, and we're really happy to also say that a new concept store for HiFi Corporation opened 2 weeks ago at Mall of Africa. And we also have the first [ kids ] baby concept store in Gauteng opening in about 2 weeks' time at Mall of Africa. [ Centerville ] is also introducing some well-known names like Nando's, [ Docu Zero ]. We've introduced brands like P&A and [ Pecan Bay ] Clothing at some of our other retail experience hubs. And certainly, that all contributes to a very healthy occupancy rate. Just standing still at Mall of Africa, this is a significant asset for us in this portfolio. As I said earlier, the first 5-year renewal cycle started in April of 2021. So at 30 June, the reporting period, we had an occupancy rate of 93.4%. The reason for that was in a lot of instances, we had to make a lot of considerations about the future sustainability of some of our clients at Mall of Africa. If we felt that potentially there wasn't going to be a lot of sustainability in terms of the ability to generate turnover and pay us rental, in most cases, we then did not renew. So that led to that kind of ratio going down or that metric going down at 30 June, but also happy to say that in that same period, over 20 leases were concluded on that same space where we had non-renewals. And by about the end of the year, we should be back to an occupancy rate of 97.3%, if we include or count all the leases that have already been signed and are now busy in beneficial occupation and are going to open in the next 2 months. Just a quick mention on the renewal cycle, there's a small table on the left. We had a 75.8% success rate in renewals at Mall of Africa. That's based on GLA. For those renewals, we had a rental reversion of 5%. That would also include where we did new deals on that specific space that did not renew. So in my view, once again, a magnificent result based on the current economic environment that we're in. And on those deals where we had renewals, we had an average escalation rate of 6.2%. Also a quick note, we launched our first foray into the digital landscape when it comes to customer-facing technology with the launch of shopping at Mall of Africa in May. It's a soft launch. It's a minimum viable product only. We're selling digital gift vouchers. We're also allowing our smaller retail clients the ability to have their own loyalty program on this application, which we provide to them at no cost. We feel it's part of the offering that we have to provide them as a landlord. And we've seen some good traction in both the sales of gift vouchers and also the download metric is looking really good at this stage. Just looking at Mall of Africa on its own, the graph on the right will show us the turnover -- the gross turnover numbers compared to 2019, and we can really see turnover at Mall of Africa in gross terms coming back, being above 2019 levels from February onwards. And then, of course, June, once again, impacted by the third wave of COVID. That might have been pre-lockdown, but we've seen this over the last 18 to 24 months that human behavior sometimes front-run government regulation and people certainly started self-regulating by June. And we can see that in the turnover numbers. Happy to say that I received some numbers for August yesterday and certainly from a turnover metric point of view, August is looking much, much healthier from a turnover perspective. This is just looking at the results for our entire portfolio. The lines indicate foot count. The bars indicate turnovers compared to the 2019 benchmark. What you will notice is that our foot count hasn't come back to 2019 levels. And we believe to a large degree, there could be a permanent disconnect or a permanent new level being created, with foot counts being 15% to 20% down to pre-COVID numbers. But what you can see in the bars is that our gross turnover has come back to 2019 levels, and we're certainly very happy about that. This is the trading density comparison for each retail asset for the reporting period, benchmarked against the prior period. We are very comfortable with where our trading density sit, Mall of Africa achieving a positive trading density. And then if you look at our regional assets, once again, I explained earlier that the entities are calculated on trading GLA only. In the previous reporting period, we had lots of months where there was no -- or GLA that did not trade because of lockdown restrictions. If you look at gross turnovers, we would have seen about a 2% decrease on average for our regional assets. Garden Route Mall actually grew turnover by 7% in gross terms for the reporting period, and then we're very comfortable with where the turnover levels are heading, from a trajectory point of view. Pausing for one moment on our collaboration hubs, we had a client retention rate of 58%. What I really want to mention here is the ability of our deal-making team to achieve deal-making in this environment. The deal-making team not only service the existing South African portfolio, but they also assist on the Waterfall development and generating new leads. And what I want to refer to is the doughnut in the middle, where if we look at our gross renewals at 12,000 square meters, the same team also achieved about 25,000 square meters of new deals. And that meant where we had retention was not successful, leading to that ratio of 58%, the deal-making team were very able to fill that space with new clients, hence leading to a good occupancy metric of 91.7% at year-end. Pausing for one moment at the 2 other asset classes. Logistics hubs, 100% occupancy, a long while at 8 years because most of these buildings are newer buildings. And in our hotel portfolio, we've added the Courtyard in this year on the reporting, also 100% occupancy. All our hotels are -- have direct leases with the City Lodge Hotel Group, which we've got a good relationship with. Over to Giles.

Thank you very much, Mike. Setting the tone for waterfall City, I think, and the development space. Contextually, the red is the area of the tax development control and development rights, constitutes approximately 40% of the 2,200 hectares of Waterfall City. So contextualizing where we are on both the East and Western side of the freeway. I think the interesting thing here is that in the 12 years to date, Waterfall has attracted investment of between ZAR 50 billion and ZAR 60 billion into the node. That's between ourselves and the other master developers, continues to grow with a run rate of somewhere between 700 and 1,000 residential units under construction at any one time, and that's densifying the node on a continual basis. And I think that sets the tone then for developments at Waterfall. From my perspective, I don't believe offices are dead. I think they're just very, very different than they used to be. I think we're also starting to see -- or continue to see, should I say, a flight to quality, a flight to sustainability, a flight to safety, efficiency and functionality. And that sits across all of the asset classes under development in Waterfall. I think people and corporates are looking to migrate into the Waterfall node, see what we've done to date. I think they want to be part of it. And that has resulted this year in about 22,000 squares of new developments completed, down on the preceding year, but I think that is the variances with property development. You have your ups and downs. You can do one big box for 40,000 square meters or you can do 10 buildings for the same 40,000. So I think it is -- it does show that we are building and developing on a lease basis. Our amount of speculative development is significantly down to practically almost 0 in Waterfall. So that is showing that the node now has its own trajectory. I think we are now a magnet for blue chips looking for Waterfall as a development note. Impressive 38,000 under development. And I think these are again effective shares. So almost twice what we were last year at the same period. And we're reporting on Block #3 for the first time, which is pipeline. The pipeline are deals that are concluded, but haven't commenced construction. Those are deals that are backed by a lease and approved by investment committee and are either going through a tender process or going through the closing out of the last financials or the paperwork. Those -- that together says -- in the last 12 months that we have approximately 80,000 square meters of effective share from an Attacq perspective that is either just completed in construction or about to start, out of a total of just under 130,000 square meters. So the bulk is still being -- is -- we're getting through that bulk at a significant run rate. I think what it does show is that the value of the joint ventures that we're undertaking at the moment, most of our developments are in JVs of some description. I think that adds the benefit of the JV partner plus the Attacq IP for Waterfall and the location. And residential continuing to sell well. For us, it's been a brilliant year for residential sales, despite a level of multiple lockdowns of Level 4s, despite SA Inc. being not where it should be from an economy perspective, and having civil unrest. I think add those 3 tiers on top of each other, I think the development space has proved to be quite resilient across the board. Talking about completed developments, what we can show here is a very high percentage of presale or pre-let developments. So no more building to spec to a degree. This is more on the back of building to suit an end-user requirement. Residential, again, continuing to sell very, very well. The first residential units have transferred this year. And that came in -- that's shown in the fact that we've launched our second residential scheme, which we'll talk about in pipeline, but under construction. Continue to be quite strong in the office space. I think we are -- as I said, it's different. It's not the same as it was. I think your tenants are rightsizing their business relative to SA Inc. So their percentage of the economy and how they perform in it, there are growth. There are some of our office tenants moving or migrating into Waterfall or taking bigger premises than they had historically had. And I think we still continue to target and to be a positive growth from tenants looking to consolidate offices between Jburg and Pretoria, or multiple offices in the same city into a singular location. Industrial has been resilient again for us, as shown by 2 very large developments underway side-by-side on Precinct LP9 and including our first data center and a distribution center and head office for Cotton On in the apparel space. And then pipeline development. This is where it gets interesting. This is, to a degree, next year's under construction slide and the year after's completed slide. So it starts here. I think 47,000, -- just under 50,000 square meters approved and ready to start construction is a big number, effective share of Attacq of 20% -- 20,000 squares. I mean what we are learning is that not all JVs need to be at a certain percentage level. We can mix and match those depending on who the JV partners and the type of asset being developed. But what it does show is now having 2 residential developments running simultaneously in Waterfall is unique. We've got 2 completing to a degree products for residential space, but they are very different products in the subsector of the residential asset class. Looking at the number at the bottom right-hand corner, over 1,000 residential units planned for the city. The first batch has transferred, as we said, the first 196 residential units, residents have taken occupation in Ellipse. You've now got a tower that has lights on at night, which is fantastic. It adds to the vibrancy of the city. It adds to the functionality of the city. Phase 2, what we call it marketing is just waiting for permits from NH BRC before commencing its early works package and piling. And then Phase 3 for Ellipse is yet to be launched, and we'll do that in due course. And then we've added the mix to the mix, so to speak. It's our entry-level product. It's -- it did -- had an unfortunate time to launch being the same day that Gauteng went into Level 4 lockdown, followed by civil unrest. It's come out of that with brilliant sales numbers from our perspective. I think at 1.2 or launching at 999 up to 1.2 for an apartment with a parking. It hits the right tone from a desirability product, selling well. And I think the nice thing with a tech being the master developer across both the city and the individual developments is that we're making sure that our products don't cannibalize each other. We're making sure that the product is on point with the type of product it is and its location. And I think that has led to us being very successful in the residential space and now are looking -- giving us the ability and the appetite to look at alternative residential asset classes. And we have quite a lot of residential rights in the city. I think with record low interest rates and the right product, we are going to continue for many years to develop quality residential products in a city of Waterfall, Waterfall CBD. And then over to Pete.

Thanks, Giles. I'll be dealing with other investments today. I think nowadays when I fill in any online forms, I'll finally get to say other as a profession. What we've [ housed in other naught ] Jackie alluded to the simplification of our balance sheet, and I think it's a natural progression. Sitting in now, these are our investments in MAS, our remaining 46 million shares as well as our Rest of Africa retail investments. Looking at MAS, our shareholding is now reduced down to 6.5% at year-end. That was following, I think, fairly well publicized disposals of our MAS shares over the last -- or the latter 6 months of the financial year to raise some ZAR 1.4 billion. We utilized that ZAR 1.4 billion to pay down all of our euro debt -- the last tranche of that euro debt was settled in early July, just after year-end -- and also pay down some of our rand debt. So the disposals helped us to achieve a meaningful fee gearing and played their role in helping us achieve that de-gearing in a rather rapid fashion. The balance of our MAS shares will be held for a total -- on a total return basis, to derive income and capital growth from. We were very pleased with the recent set of MAS results put out. I think they've done very well during the pandemic to position themselves with a very strong balance sheet, access to a substantial development pipeline and with a very capable management team. So we certainly hope that the resumption of their dividends which was announced, can be consistently implemented and that we can achieve some meaningful dividend growth going forward, which will certainly help our interest cover ratio which this year was at 1.41%. And one of the largest reasons for that was the lack of a MAS dividend for the entire financial year just ended. Moving on to our Rest of Africa retail investments, totaling some ZAR 435 million, of which ZAR 35 million is cash available at our discretion. So the remaining ZAR 400 million split between our investments in AttAfrica Limited and then also our 25% of Ikeja City Mall. We have a fairly long-stated intention of exiting these assets. We've part exited some over the last few financial periods. And we remain of the view that -- we remain on the same footing as our shareholding investor that a meaningful exit is something that we hope to achieve in the near future. Limited lockdown restrictions are still in place in Ghana and Nigeria. The trading conditions remain tough. The challenges haven't changed. They still remain tenant depth and U.S. dollar liquidity. And up until we manage to achieve a disposal, our operational focus will be to fill vacancies and collect rentals. I think what's important here is that we don't have any direct debt against this investment. So it's more an opportunity cost as to -- as and when we manage to implement our exit and then that will free up some capital to either hand over to Giles or to Raj to pay off some debt. And on that note, I will hand over to Raj to take you through the financial results.

Thanks, Pete. Good morning, everyone. I'm going to go straight into it. So a familiar sight for most of you, just a quick snapshot of our financial results for the year, and Jackie touched on it, distributable earnings per share down 35.9%. And I'll unpack that in another slide, but I think MAS not paying out a dividend for the last periods has impacted us. It used to comprise 45% of our total distributable earnings. Not a surprise per se. We've always accounted for MAS's dividend on a historical cash received basis. So I think by the time they released their December results, there was certainty that we wouldn't be accounting for a dividend in our numbers. The interest cover ratio, 1.41x, a decline from last year's 1.68x, a direct result of the reduced income from dividends. Gearing improved to 43.3% and this has been obviously a focus point for us, and I've got another slide talking to during our recycling activities. The next 2 metrics 3.9 years as a weighted average debt expiry profile. The team has done phenomenally well in renewing a significant part of our debt in the last 6 months of the financial year, extending our overall debt maturity profile. So we've got the 3.9 years left. Weighted average cost of debt increasing, perhaps coming as a bit of a surprise, 8.9%. That's not as a result of an overall increase in rand-denominated debt but rather the weighting shifting between more of our debt being a rand-denominated debt versus the euro-denominated debt as a result of us settling more than ZAR 1 billion equivalent of euro debt during the year. Interest rate hedging, 73.8%. We're waiting for swaps to roll off, obviously, in this low interest environment having fixed -- a substantial amount of our interest-bearing debt at higher fixed rates, not ideal, but we have a substantial amount of swaps rolling off in the next 12 months, which will provide some reprieve. And then liquidity improving significantly from ZAR 1.1 billion last year June to ZAR 1.7 billion this year, really a function of the recycling of capital. Disposal assets and those proceeds coming through, much of which has already been applied to debt and some of which we will still apply to reducing debt further. And then like I said, recycling of assets amounting to a substantial amount of ZAR 2.8 billion, and I'll unpack that in my next slide. I'm not going to spend too much time here. I think last time we spoke to the market we talked about disposing ZAR 2 billion worth of assets in the 12 months, and this is part of the debt reduction plan. Looking at our gearing ratio, we wanted to reduce that. We wanted to improve the interest cover ratio and it talks to what Jackie has been alluding to, optimizing our capital structure. So over the period, we've announced transactions totaling ZAR 2.8 billion, all of which have closed since, barring the disposal of 3 assets to Equites, which is currently subject to competition authority approval. The majority of the assets that we have disposed of, we've immediately settled debt and some of the surplus proceeds are currently sitting in our cash balance of roughly ZAR 1 billion. At the bottom of the table, what we've tried to do there is illustrate what the impact on ICR [ and ] gearing could have been if we had implemented these transactions at the beginning of the financial year. So really just to try to give a full 12-month impact, and that has an impact on the interest cover ratio pro forma amount. So you can see that would have improved from 1.41x to 1.51x, so significant improvement there. And then from a gearing ratio, given that a lot of the proceeds were already received at balance sheet date, the improvement is only from 43.3% to 39.6%. But I think below the psychological 40% level and I think gearing ratio is quite topical amongst REITs at the moment. I think having a gearing ratio below 40%, probably just a handful of counters currently that can claim that. And I think that's certainly a kind of target for us to maintain in the foreseeable future, to be below 40%. Distributable income per focus area, overall decline, like I said, of 35.9% to ZAR 0.468 per share. I'm not going to talk to the reasons for that. But really where I want to pause is, the 2 categories or the 2 focus areas being Waterfall City and Rest of South Africa performed, in my mind, phenomenally well during the period. Waterfall City growing period-on-period 30.6% in an extremely difficult market. Rest of South Africa contributing roughly 9.2% growth for the period as well. A number of reasons for that from a Waterfall City perspective, we've obviously completed some buildings between the 2 reporting periods, adding to our NOI for this particular year. But I think more importantly, rental discounts substantially reducing period-on-period, going hand-in-hand with that better collections. Jackie talked about a 101.5% collection rate, whereas I think last year, we reported 92.5%. So again, I think reflective of a market that has very much stabilized and also impacting our ECL or bad debt provisions, which were significantly down from last year. So overall, I think a good performance from Waterfall City and the Rest of South Africa segment. Other, which Pete mentioned, contains both the MAS segment as well as the Rest of Africa retail, a negative contribution this period. And that's for largely 2 reasons: not receiving a dividend, but still incurring some costs on our euro debt, so interest finance costs on our euro debt during that period. And we had a few foreign exchange FECs out that we closed out early on the back of not expecting the dividend, and that contributed to a net-net negative of 23.2%. Rest of Africa hasn't contributed to that, it was 0 contribution. And then on the bottom of the slide, the same number is just depicted in terms of cents per share. I'm not going to spend too much time on this. I've kind of touched on it on the previous slide, and I think it's just useful to understand the impact that COVID and the lockdown restrictions had on our business last year, a total of ZAR 172 million impact on distributable earnings. We took a conservative approach. We reduced our distributable earnings with all of the discounts that we provided. But to the extent that we were not collecting our receivables, we also subtracted that from our distributable income. And then obviously, also took into account that we had provided for some bad debt provisioning or ECL provisioning. This period, a lot of that is unwound. So we collected more, i.e., receivables have reduced on a net-net basis, which contributed more to our distributable earnings. And then our expected carry loss provision has also reduced from a significant amount last year to this year. So overall, ZAR 172.5 million last year negative versus just under ZAR 64 million this year. Balance sheet. And maybe before -- just talking about this, Peter mentioned that the contribution from Rest of Africa as well as Mass is relatively small. And I think this really contextualizes that. There's a significant portion of our assets, the South African-based, in terms of Waterfall City and the Rest of Africa combined contributing to roughly 90% of our overall asset-based head office, South Africa, which is largely made up of cash balances contributing about ZAR 1 billion. And then there's a relatively small portion of around 5% to 6% that is others. So like Jackie mentioned, very much a South African business focused on quality precincts, and you can see that coming through this particular balance sheet slide. The movements from a South African perspective, largely due to negative fair value adjustments for the period, I think. And we haven't got into too much detail, but if we look at the valuations for the period ending 30 June 2021, what we've seen is that the first 6 months, relatively bearish view from valuers on retail. And in the second 6 months, some of those assumptions are changing somewhat. And I think that is a result of the retail sector reaching some sort of stability during the financial year. We've seen trading densities. We've seen turnovers improve and actually exceed 2019 levels in the last sort of 4 to 5 months of the financial year, and that's sort of come through our latest set of retail valuations. I think from a collaboration hub perspective, office sector still facing some headwinds there. I think the impact of COVID was a little bit more delayed. But we certainly saw in the latest valuations, the impact of hybrid working and the thought process around that impacting how valuers look at long-term vacancies, discount rates and so forth. And we've seen that the office sector or collaboration hub is taking the brunt of that. And I think potentially going to take a little while longer to stabilize as we see corporates making decisions around the utilization of office space. So total asset is a net-net decline of 8%. Total liabilities reducing by 11.5%, largely driven by the significant reduction in debt between periods of about ZAR 1.2 billion, giving us a net movement in our NAV or equity base of negative 4.1%. In terms of the investment property slide, I'm not going to spend too much time on this. I'm going to start at June 2020, where we had investment property, reflecting a total value of ZAR 19.4 billion. During the year, we've obviously spent some CapEx in our existing portfolio of about ZAR 100 million and the remaining CapEx in terms of properties under construction. And then if you look at fair value adjustments, developments under construction, relatively small. Lease or land declining by about ZAR 62 million and then the majority of the fair value, note that we took this from our completed assets. And like I said, a combination of retail hubs as well as collaboration hubs sparing the majority of this negative fair value adjustment whilst the logistics hubs as well as hotel holding up quite well during the period. At the end of the year, we had roughly ZAR 1.2 billion worth of investment property classified as held for sale, which is a separate reportable category. That included the Deloitte head office building, which was valued at roughly about ZAR 850 million. That transaction closed on the 17th of August and has subsequently obviously moved off the balance sheet, and it got converted into cash. The other 3 assets that are contained under held for sale are the Amrod buildings, Maxwell buildings and the Cotton On development, which is subject to the equities transaction. That gives us a closing balance of just under ZAR 17 billion in terms of investment property. If you look at interest-bearing debt, I talked to a lot of these metrics already, a significant reduction as part of our debt reduction plan. Total debt amounting to roughly ZAR 10.2 billion. Like I said, a ZAR 1.2 billion reduction period-on-period. The euro debt of ZAR 338 million that was on the balance sheet at year-end was subsequently settled. And so we've reduced our exposure to foreign currency debt completely with an average loan term of 3.9 years, gearing of 43.3%, our hedging of 73.8%. And I think the only real other discussion topic on this particular side is the bottom of the slide where we refer to our group level covenants with our banks. Our gearing ratio covenant set by the banks is 60%. Our actual calculation against that covenant came in at 46.6%, so significant amount of headroom in that particular covenant. Our interest cover ratio, we do not have an interest cover ratio at a group level to measure against. And then our minimum net asset value covenant, as most of you will recall, at our last reporting date, that was set by one of our lenders at ZAR 10 billion. I think we had a numerous -- or a number of questions from analysts around that level versus our actual measurement at just over ZAR 11 billion. And perhaps some discomfort around the headroom that we had there. The team renegotiated that minimum NAV covenant down to ZAR 7 billion, which is now effectively the same definition and the same level set across all of our lenders. So between that level of ZAR 7 billion in our actual of ZAR 11.1 billion, a significant amount of headroom. Funding mix, not materially changed, a significant increase, I think, by one of the banks being RMB that have participated in our ARF Lynnwood Bridge refinance. But barring that, still very well diversified in terms of our lender base with no exposure to any of the debt capital market type instruments and all of our funding coming from local lenders. On the debt maturity slide, a slide that we've put up quite often. And I think at the last reporting date, we had a significant amount of our debt that was sitting within the 12- and 24-month maturity bucket, again, receiving a lot of questions from the market on that. We were not too concerned about it, knowing our ability to refinance our debt. Two major transactions refinanced before the end of the financial year amounting to ZAR 5.6 billion in total, one being the ARF Lynnwood Bridge transaction of ZAR 3.2 billion and the refinance of Mall of Africa of ZAR 2.4 billion, both of those closing before year-end. And so if you look at the debt maturity profile, we've added a separate category. So we've got the debt maturity as per our contractual arrangements with our banks. And then the second set of bars or columns rather is how we then depict that in terms of our annual financial statements, which are driven by IFRS. The major differences between the 2, IFRS requires us where we have assets held for sale, that liabilities associated with those assets held for sale need to also be categorized as short term even though contractually, we have perhaps 3 to 5 years still to settle that debt. And then also where we've indicated to the market that we would settle debt prior to year-end and then we've done that post year-end, that is also categorized as short term. But if you look at the red bars, less than ZAR 300 million falling due within the next 12 months, just under ZAR 2 billion within the 12- to 24-month bucket. So a relatively small amount in the context of our total debt book. Some of the data has already been settled post year-end. So very comfortable with our debt expiry profile. I think there's not much for the debt team to do within the next 12 months in terms of refinancing. And then if you look at the hedge maturity, a significant amount of our hedges fall off in the next 12 months, 16% -- 16.3% in the next 12 months, followed by over 13% in the following 12 months. And that could potentially result in a reduction of our overall cost of debt as we move from more fixed rate, a higher cost of funding to a more variable rate, which is currently lower. I'm going to spend a few minutes on this last slide, which is the dividend and REIT status update. And hopefully, if I do a good job on this, there'll be less questions this time than there was last time. It's always, I think, an interesting point for both analysts and investors to understand. This is an extract of our trading statement that was sent out yesterday. And so there's nothing more in terms of the slide, but I really want to talk to the concept around dividends and REIT status in largely 3 sort of categories. One, the difference between the REIT requirements in terms of distributable profits; and two, how we disclose distributable income, which is an IFRS concept versus a sort of tax concept, which drives the compliance regulations. The second aspect is to talk about the trading statement and unpack that in a little bit more detail so that everyone can fully understand that. And then the third aspect is just talking about the dividend decision itself that was taken by the Board. So the first concept is our distributable income, which was obviously reflected as ZAR 0.468 per share for the period. That is firstly driven by IFRS accounting, which then we apply SAV best practice principles to, to get to a funds from operations amount. And then we make further adjustments to that to arrive at a distributable income number. Those further adjustments are company-specific adjustments, where we typically remove items that are nonsustainable. We remove items that are not necessarily cash backed. And for us, that is quite important to disclose a distributable income number that we believe is more sustainable in nature and removes certain once-offs. And some of the adjustments that we typically make is we remove the accounting for associates, which typically brings a kind of pro rata share of that associate income into our books. But as you understand that when you have an associate as part of the group structure, you'll only receive a dividend. And if the company hasn't paid out the dividend to include associate income and distributable income, we'd be inflating that because it's not backed by cash. Similarly, what we've done in the past and what we continue to do is to eliminate sectional title type developments where we make considerable gross profits on that. But again, those are lumpy. Those are once-offs and certainly not part of our sustainable business. And so we removed those profits from our distributable income. We get to a number, like I said, the ZAR 0.468 per share, which is a group consolidated number. I think what typically -- analysts like to do is take that number, multiply it by 75% and then expect that to be the minimum dividend that a company declares. But that's where the difference between the distributable income versus the distributable profit number comes in. So distributable profit is a tax concept. As you well know, tax is paid on a legal entity by legal entity basis. It's not a group concept. So in our group structure where we've got a listed holding company and the 5 major subsidiaries, we will complete 5 different tax computations. Each one of them, we will calculate what the distributable profit is. Distributable profit starts off with a gross income definition. And most of you will be familiar. That's a tax concept. We reduce from there all of our deductible expenses, our capital allowances, we get to a distributable profit number. If we distribute all of that, that then itself becomes tax deductible and results in a 0 tax liability, and then that distribution obviously goes up to the holding company. What we have shared with you previously is that a number of our main operating subsidiaries have got assessed losses, which means if we do not pay out 100% dividend and we pay out the minimum requirement of 75%, the 25% that would normally get taxed, in theory, can be shield by the assessed losses that we've got. And that is something that we have at our disposal and that we continue to use until those assessed losses are no longer available to us. And so like I said, I just want to highlight the 2 differences between distributable income, distributable profit. One is an accounting concept on a consolidated basis. The other one is driven by a legal entity basis in terms of tax calculations. What have we done this year, each of the subsidiaries need to make a distribution within 4 months of year-end. And obviously, those distributions need to be at least a 75% minimum distribution. Those distributions will be made before the 4-month period is completed and what all that too, it will put income into the holding company's hands within the next -- within the 4 months after year-end. That's an important distinction. So from an Attacq perspective, it only receives income from subsidiaries after year-end, which means when it completes its own distributable profit computation and it's task to distribute at least 75%, it's no longer doing that in the FY '21 year. It's doing that in the FY '22 year. So it will then have itself 4 months after the end of its June 2022 year-end date to then make a distribution to ultimate shareholders. That decision, obviously, is a Board decision. And that decision will be taking place during the course of the next sort of 12 months, definitely before that end of October date. And as the Board has made the decision this year taking into account a number of factors, those factors will still be relevant in the next reporting period. Obviously, a big consideration in terms of making that distribution will be the REIT status. And to maintain the REIT status, we would need to pay out at least 75% of the distributable profit at that stage. So that covers the first 2 items that I wanted to discuss. The last element is just the commercial rationale in terms of not distributing a distribution currently and putting that income into the next financial year. It really comes down to capital allocation. As you are well aware of, we've been optimizing our capital structure through the reduction of debt. We disposed ZAR 2.8 billion worth of assets to pay down debt. We've got a healthy development pipeline here in Waterfall City, which is our core focus, and we continue to attract good tenants and develop. And in terms of funding that we have, obviously, 2 avenues at a high level, fund that with debt or fund that with equity. We're on a debt reduction plan, so increasing our debt is not necessarily the first port of call. And then we look at our equity sources of funding, clearly, in years gone by, the REIT model was to distribute all of your earnings and then tap the market for the reinvestment plan and to bring that capital back in. And that makes sense when the equity capital markets were open, but the discounts at most countries we're currently trading at make trips very expensive. They need to be done at a high discounts to current share prices, which are already trading at a significant discount to NAV. So it is an extremely expensive source of capital. Hence, we look at our retail earnings and try to balance the decision between paying out distributions and maintaining REIT status, but also then retaining as much as we can to fund our development pipeline, which for us is obviously a massive source for growth. And so we make that trade-off between long-term growth, between that and making short-term dividend distributions. And I think those are similar considerations that the Board will take over -- take into consideration over the next 12 months in determining what size distribution, if any, will be made in the next reporting period. So hopefully, that wasn't a mouthful. Hopefully, I've explained it well enough, but happy to take some questions at the end of it.

Thanks so much, Raj. But Raj, we will leave yourself your number here on the screen so if you've got any questions to Raj, just please contact Raj or WhatsApp him. If we look back and we look forward in the strategic update. ESG, as I've mentioned, it is really a very important component, and it underpins a big component of our strategy of our business. And we really feel in Attacq is we need to leave the environment in our communities in a better space of what we have found it. In environment, we have been quite busy with the newly certified buildings and there's also government lifting the PV generation licensing. We must definitely -- we'll be much more aggressive in looking at the cost of occupancy of our tenants and how can we generate more power from the sun and focus a lot on really integrating the E in our value chain in our business. Our people and our communities play a vital role in the success of all of our precincts. We've launched an Attacq tertiary education program, whereby certain of our colleagues in Attacq qualify for bursaries that we fund and support. And then in the communities, when lockdown Level 3 hit again, we thought it was prudent to tip all of our waiters that is affected by this and the Attacq Cares program contributed a further ZAR 250,000 of food vouchers to really needy people that overnight had no income. We continue to take hands with our people and our communities, and then governments play a vital important role of ensuring that our business and our stakeholders are always looked after from a governance point of view. Looking ahead, and it's always difficult when you sit in these times and people are talking about a fourth lockdown wave and really trying to see through the cycle and where we will be heading. But I really, as Raj has ended off, our precinct-focused South African portfolio remains a key focus for Attacq. We will continue to develop smart and safe, sustainable precincts. We offer space as a service in our collaboration hubs, and we will continue to look at strategic asset disposals in our portfolio. Developments at Waterfall will continue with the residential rollout, as Giles have alluded to, new and exciting residential asset classes the teams are looking at and also continue with tenant redevelopments that you've seen as we've got a quite a healthy pipeline of developments ahead of us for the next year. The delicate balance of our capital structure is always something to manage. And as Raj has said, we need to preserve our balance sheet and ensure that we've got enough liquidity levels to unlock these opportunities within our precincts. Pete and the team of Hyprop will continue to exit or try to exit the rest of Africa. And for the rest of the year, as Board, we will not provide any guidance as we just feel the lockdown level, the uncertainties that we still face over the next 12 months is too uncertain to provide any concrete guidance for the next year provided. And in all of this, we need to think about how do we grow our business, not just in real estate but through other innovation projects. We've launched the Attacq growth innovation program that we will embrace business disruption as an enabler to further enhance our precincts. We'll also look at technology, as Michael has said, is we have embarked in a modern data platform as we've seen the vital importance how business efficiencies can improve through proper data analytics, especially what we've learned through fact in the data analytics in our retail environment over the last 2 years. With that, we continue to create sustainable value for our share all through our value-based strategy and ensuring that the impact that we bring is not just in a financial component, but for our communities and in our environment that we operate in. Thank you so much for the support over the last 12 months. Thank you to our Board, to my colleagues and my expert team, to all of the staff and all of our stakeholders in continuing the journey with Attacq, and we hope to see you soon. I think we're going to open up for questions.

Just give it a minute or 2 because there's a bit of a lag, so I'm sure they'll come through.

Is there any questions from people online?

No questions at the moment, Jackie.

Are we going to hand out Raj's cellphone number?

Yes.

Okay, there's a couple. Right. Let's go with the first one. This is from Fayyaz from the ABSA Asset Management team. If you intend to use all of the cash for development, what would the benefit of being a REIT be for Attacq?

Are you going to...

Yes, I can maybe answer that. So I think, Fayyaz, it's really trying to optimize the capital structure at the moment. Is the REIT decision in the long term? Yes or no? I think maybe that's what your ultimate question is. I think that's something that we will continue to consider on a regular basis. Obviously, the REIT structure does have its inherent benefits from a tax perspective. Capital gains on recycling of assets is extremely helpful when you are disposing of assets and saving on the capital gains tax. But I think we have to manage at a fine balance between remaining a REIT and being required to pay out distributions but also needing to fund the development of Waterfall City, which is obviously a key focus area for us.

Thanks, Raj. Then another question from Yesh Pillay from Anchor Stockbrokers. Do you feel lenders had an influence on your decision to pay out a dividend? And number two, could you please give a progress update on Africa disposals? Have you met any buyers as yet or did any as yet? Or did any -- yes, market found -- give you any leads?

Yes. I can maybe answer the first question. So absolutely not. I think this -- the decision around the dividend payment had nothing to do with lenders. In actual fact, lenders have asked us to stop repaying debt. We had a couple of WhatsApp messages earlier today of surprised lenders around the dividend decision. But jokes aside, our covenants, we've got miles of headroom within our covenants. The debt reduction strategy has resulted in ZAR 1.2 billion worth of debt being repaid. So we certainly have a significant amount of debt capacity from that perspective. We are just choosing to manage our debt levels. So we have no pressure from any lenders in terms of a dividend policy per se.

Pete, Africa?

Africa. Yesh, I can answer your financial query. From an Ikeja perspective, we -- ourselves and Hyprop obviously have announcements out. We do have -- that asset is essentially spoken for per se. The buyer is funds operated by Actis. Reason why it's taking so long to close is simply for out of -- things out of -- beyond the scope of our control, being a -- us and the buyer. Capital markets are difficult, but at least we are dealing with a credible party who knows the environment well. They know the asset well, and they have fundraising ability. So we do have to close out on that as soon as possible, but we do need some stars to align and some good news to start coming out coming from a macro perspective. On the balance of the portfolio, which is actually our Africa assets, we are speaking to credible parties, but it's still early days. And experience has shown that to close out transactions of this nature, it often takes up to a year. So I'm not saying it will take another year. It will be great if it does only take another year, maybe it will take 2 years, maybe it will take 6 months. But we are speaking -- we are currently in talks with credible interested parties current.

Thanks, Pete. Then another question from [ Saheed Hattiz ]. What do you rate the probability of your share price delivering on its implied value?

Sorry. Maybe, we should...

What do you rate the probability of your share price delivering on its implied value?

You should maybe ask that question to the shareholders. I think we -- in the whole of South Africa in the REIT industry, we're all in a reset at the moment. We've been through a complete uncertain time period. We -- 12 months ago, the REIT market has been very hammered hard in terms of value and on how we've traded. We've certainly seen a strong comeback throughout the whole industry. What will imply a rise? I think, further capital reduction in terms of our metrics, our ICR and our LTV levels. I think that needs to focus more on that. And I think deliver on our strategy of Waterfall. Property is a long game. And we're only half way through in Waterfall City, and we need to continue with the work that we're doing. But I think definitely, the debt metrics.

Thanks, Jackie. Another question from [ Wilshire ] from SBG Securities. Hi, team. Hope you're well. Were you surprised by MSP's decision to pay out a dividend for FY '21? If yes, would you have considered holding the shares instead of disposing? Needs MAS.

I'm going to answer one part, and then I'm going to ask Pete to answer the next quarter. I think, were we surprised? I think Raj and the team penciled in a dividend and they were quite accurate in the dividend. And I can disclose we've got no interactions with the team other than the public interaction. So the MAS share for us has been an incredible important currency for us to meet the objectives of Attacq. As we've illustrated and I think Raj said on the balance sheet, if we see where Waterfall's sitting and the Rest of Africa contributes to our balance sheet, pre our selling the MAS shares, the MAS shares was an incredible currency for us to quickly offload, create good value for Attacq and service those very important debt metrics. Pete, so what would you say is our future of MAS?

I think as mentioned by myself, we hope to obtain for as long as possible, I think, there's a very credible team on the ground there with actually a substantial pipeline in a very different macro environment to what we face with low cost of debt. And I think they've also proven themselves by investing in what's turned out to be a very pandemic-proof asset class, namely they're so called open air malls or convenience malls, something that I think will continue to thrive just given the nodes that they've selected even post pandemic. So think were we surprised? No, I don't think we're surprised. I think there was uncertainty. And I think some of that uncertainty has dissipated in the last few months, just given the good macro data coming out of the markets that they operate in, particularly Romania, the low case numbers coming out or the drop in case numbers. And I think that's always been the unknown, when do we start to turn into some form of normal. So we -- I think that we maybe came 6 months earlier than what we had hoped for. But as we've also learned, hope is a dangerous strategy. So we took the opportunity last year to [ de-gear ] when we got the opportunity. It was definitely the best thing for us to do.

Another question from [ Sandy Lee ] from [ Un Tombo Well ]. Okay. Can you please provide guidance on CapEx for FY '22 and FY '23, respectively? How much is noninterest-bearing debt in absolute terms? When are you looking to fund dividends going forward? And how will you fund returning dividends from? Will this come from FFO or borrowings or disposal or a combination of the above?

I'm going to try to answer those questions. So maybe on the interest -- on noninterest-bearing debt, I think it's a simple calculation. So on Slide 35, we've got our interest-bearing debt at ZAR 10.2 billion, and our total liabilities is ZAR 11.48 billion. So the difference between the 2 is noninterest-bearing debt. In terms of -- I think the question is around funding future dividends, and I don't know if it was timing thereof as well. So I think dividends should always only be funded from earnings and not -- you won't be borrowing from your lenders to pay your shareholders. And certainly, that isn't a sustainable strategy. So it will always come from our -- from earnings during the year or potentially from retained earnings. Sorry, [ Michelle ], what was the other questions?

CapEx.

CapEx.

So I think CapEx, a useful slide to use with regards to CapEx is the slides that Giles has got in terms of developments under construction in the pipeline developments. So at a high level, I'm just going to talk about those developments under construction. We've got a building in Corporate Campus. We've got the data center, which is currently under construction, which commenced post year-end. We've got Phase 2 and Phase 3 of Ellipse Waterfall, which are substantial developments on their own, but we will participate to a 20% extent in those type of developments. And then we've recently launched The Mix, which again is a 50% participation with our JV partner participating in the other 50%. And then we've also got a distribution center and a head office that we've signed with a tenant that we can't yet disclose the name of. So I think if you want to model something around that in terms of future CapEx, you can use that as a starting point.

Perfect. Thanks, Raj. And this is probably a good dovetail into from [ Lani's ] question from DZG African Wealth Group. After developing Waterfall, what's the next new frontier for Attacq?

You will need to watch the space. I think definitely, it's actually a very good question. We're definitely building up the skill set within our management teams and within our staff to enable to unlock these type of precincts. I think our focus now, our core focus is our current precincts and Waterfall is the largest component of the work that we have got left. But as management, we will continue to seek opportunities where it's viable and we create shareholders' value.

Perfect. Thanks, Jackie. Okay. Then 2 from Nazeem from Investec. What is the value of the development pipeline in total and then split resi versus the rest? Will you maintain the policy of distributing to holdco in the next financial year?

Giles?

Giles is doing a banking financial [indiscernible]

No, I'm just trying the feasibility. So...

You said that the other day.

Yes, we did. So the pipeline, I think, with the pipeline we can see and then there's the pipeline directly behind that, which is sort of a longer pipeline. So the initial stages of conversations around the whole -- the next batch of buildings coming into Waterfall. So I think the developments, what we can see from a pipeline perspective, between The Mix and the residential -- the 2 resi blocks. So that's The Mix and Ellipse Phase 2, that's circa ZAR 900 million. I think what we -- what is key there is there, we have JV partners. So on the one, we're a 50-50 JV on The Mix, and on Ellipse Phase 2, an 80-20 JV. And then on the distribution hub, the new DC, that's circa ZAR 200 million and again, on a 50-50 basis with a JV partner. And then behind that, the sky is to a degree the limit. We -- what we can say is that we're not -- I don't -- even I'm bullish. I don't have as much appetite as I used to have, maybe it's my old age. For spec developments, I think we're at a point now where the spec developments are becoming less required for Waterfall. So these are build-to-order type of developments backed by leases. I think we've got a very healthy pipeline that sits behind that. And these are deals that are in the infancy. I think these are deals that are -- they continue the mantra of logistics. They continue the mantra of office -- the next phase of office precincts where we are 2 or 3 buildings into a 5-building development. I mean that's our priority is to build that part of the city out first. And those deals are embryonic. So I think as I said, they are -- they will continue this time next year. We'll be having that conversation and those will probably be pipeline or under construction. So it is a healthy pipeline. And I think that is part and parcel of why the management team and the Board has done the large debt reduction strategy to build up firepower and build up for us to carry on with the momentum we have.

Thanks, Giles. So I'm going to hope that's answered your question as well because Simon asked what's the time frame for the Attacq development pipeline completion. And as a growth company, where do we see the growth post completion?

Maybe what we could -- maybe the question also, Giles, is if we look at all of the bulk we've got available -- sorry, now I'm asking the questions. If we've got all of the bulk that we've got available, what is the estimate value of the bulk that we still have to develop?

So we've got circa 1 million square meters. We've got 20 years to develop. That's the time line of the development rights in Waterfall. And if you looked at that split, half of that is offices. I think we run at a run rate of around ZAR 25,000 a square meter, then escalate that forward. And the balance is a combination of resi and industrial. Industrial is probably ZAR 10,000 per square meter. Resi is probably ZAR 20,000, ZAR 25,000. So I think it's a large number. We're probably looking somewhere north of ZAR 20 billion to complete Waterfall. I think that's what shows the value with the JV partners we have. I've said it before, I'll say it again. I'd rather do 100% of 50% of Waterfall than 50% of 100%. So I think the idea that we've got -- the combination is that we want to continue the momentum. Finding the right JV partners unlocks different avenues for us. We wouldn't have gone into the resi space as aggressively as we had without good credible JV partners. But yes, it's a big number, but we've also got 20 years ahead of us.

Thanks, Giles. Last question is from [ Gieralt ] from [ Agorsi ]. Just for clarification, how are the sale of MAS shares being used in the business again?

We utilized the -- I think we've raised ZAR 1.38 billion in disposals. The vast majority of that went to, totally by July 7, settling our euro debt. And I think it's about approximately ZAR 200 million, which went into SA debt. So yes, approximately just over ZAR 1 billion into euro debt to settle it and then the balance into SA debt.

Okay. Sorry. Not the last question. [ Mohammed ] from [ Cecily Killy ] says, "Hi, team. Please elaborate on the tax shield, which I assume sits in the devco. How much of a shield will this provide on total normalized EPS?"

[ Mohammed ], thanks for the question. Thanks for the WhatsApp message as well. It's a little bit more complicated than that. So the assessed losses sit across 4 separate legal entities. Those legal entities are comprised of income-producing assets as well as the entity that develops out of Waterfall. So the assessed losses, you need to take into consideration the taxable profit that each of those entities generated on their own. So it's not a collective amount. What I can say is that there are significant sales losses that we could have applied in this particular year. Next year, they do reduce significantly. But in some of those entities, we'll be able to apply some of those assessed losses for another financial year. But let's not forget the fact that notwithstanding the assessed losses, you must be in a position to at least distribute 75% of your distributable profits. So the tax shield only helps with regards to the 25% that you don't distribute. So I think that's an important factor that one must not forget.

Thanks, Raj. Nazeem is just saying that one of his questions, will you maintain your policy of distributing income to holdco in the following year? He'd just like an answer to that question.

Nazeem, I think if I understand your question, you're talking about the subsidiaries that are generating distributable profits. All those entities distribute up to the holding company. To maintain the REIT status, we will have to. Each -- the REIT itself being Attacq Limited and all of its controlled entities need to distribute 75% of their profits within 4 months after year-end. So if we want to maintain our REIT status, that will have to be done.

Thanks, Raj. Fayyaz is following up with another question from ABSA Asset Management team. Would it not be better to buy back stock now rather than to develop?

Yes. Fayyaz, I think, yes, obviously, trading at a substantial discount to NAV, I think it's -- everyone considers buying back shares. I think for us, it's -- on the face of it, it makes a lot of sense. I think for us, reducing our equity base by buying back shares when we believe our gearing ratio is on the high side is perhaps a bit counterintuitive. You want to prop up your equity base and reduce your debt. So if you have surplus cash, instead of buying back shares, I think you're better off putting it in your debt and reducing your interest-bearing debt and reducing your financial risk.

Okay. Thanks. I think that's it.

All good. No questions. Good. Once again, thank you very much. Thank you, team, and I hope you've got a good day.