Attacq Limited (ATT) Earnings Call Transcript & Summary

If I can please ask that everyone can take the seats, we would like to start at 10:00. And we've got quite a bit of people online as well. So if I can just quickly ask that everyone can take the seats so we can start the morning. I'm looking at the technical team, is everyone online listening to us? Great. All sort of people coming in. So good morning to everyone, and thank you so much for joining us. Thank you to everyone online, taking time to join us. Thank you to our Board Chair, I know he's dialing in this morning, to members of our Board that's here this morning, to our staff that has made the time to come and see the -- I would say, great results this morning with us. To all our stakeholders, thank you very much for taking time to come and listen to a little bit of our story and what we've done over the last 12 months. I really feel a bit euphoric this morning after the Boks have won their second championships after the World Cup, we felt is good. The [indiscernible] won, the [indiscernible] won. Our South African relay team also took a medal. And then last week, Saturday, we again beat New Zealand for the fourth time. And again, I almost feel like we've beaten ourselves again for the fourth time as a great set of results by the team of Attacq. So this morning helping me present the results, I've got the team of co-presenters and my team. We've got Peter. We've got David Oosthuizen, Raj and Mike, and each of them will help me present this morning. When we look at our focused areas in Attacq, we've got basically 3 major areas, being Waterfall City and the developments around Waterfall City. We've got over 1 million square meters of bulk on our balance sheet. A big component of that is logistics bulk, and that David will talk about what are we busy with in the development space. But the really key focus area for us is our development space. The Rest of South Africa is our retail experience hubs, we own incredible malls. We believe that we dominate in those areas. And we will continue to dominate those areas by improving our tenant mix, by improving the offering. So there will be capital allocated to the retail experience hubs in the Rest of South Africa to ensure that remain the relevance and the dominance in our portfolio. And you can see also the contribution that the Rest of South Africa makes towards our total distribution per share income. Then the last part is our other investments. And I would say is where we were really busy over the last year, whereby we sold our MAS investment during the last year. We concluded a sale agreement, whereby we're going to sell the Rest of our Africa malls to Lango, and Peter will give us an update on that. But that really leaves other investment just basically with the shares of Lango. And maybe a question that you will post to us today is, will you have another offshore strategy in the future? And as a team, we will look at developing a further offshore strategy. But it needs to fit our purpose of Attacq, and also it needs to fit, where we've said we've disposed asset that we don't have any significant influence over and control. And that for us is very important. So we will look at other markets. We will look at investing in other opportunities as long as we've got a purpose that is aligned to ours, and we've got significant influence and we can create sustainable income for the future for our shareholders. Sorry about this, let me just do that. When you look at our business focus, it's really met by and driven off the objectives in our portfolio. And each and every one of my co-presenters today will touch on certain of these objectives and what we have done over the last year. What I'm really, really happy to witness experiencing of what happening in Attacq is how ESG is integrating in these objectives. And we're not standing alone and talking about ESG, it's becoming part of who we are. And I think -- the most important part that I actually want to highlight today is the people-centric approach, because I believe that as business leaders, we don't talk enough about how we handle our staff. And it's actually the staff that actually produces these incredible set of numbers. A stat that I want to actually, today, highlight is our employee satisfaction survey that we did over the last year, where we had 100% participation. Don't ask me how we achieved the 100% participation. But it's important for us to have great data set points and understand the pulse on the ground of our staff. And we achieved an 81% score of employee satisfaction. Culture for me is my immune system of our business. If we've got a strong immune system, we can face any headwinds. The uncontrollables becomes easy to control, because you, team Attacq, you can handle it all. And I want to stand still here today, and I want to just say thank you to the team that continuously produce hard work and all of your dedication, today's results and there, my name goes. You'll say, Jackie is throwing a name around. Your hard work, dedication is really for me a privilege to stand here today and present these incredible numbers. It's not Jackie's numbers, it's team Attacq's numbers. So once again, thank you to our staff. This year, we started off -- I'm not going to start with the highlights, I'm starting with the key transactions. And 2024 will be known for the year of the GEPF transaction, where we disposed 30% of AWIC. And got a beautiful check of ZAR 2.7 billion, and Raj spent it very quickly paying down the debt. And Raj will talk about the debt today. But this transaction has been a landmark for us. It's improved our capital structure. It's positioned Attacq to enter the debt capital markets, which Raj again will talk about today. and we can continue unlocking the wonderful development we have here in Waterfall. We then also disposed some of our mass shares -- we can also say when is the timing right, you'll never know when the timing is right. But once again, stuck to our strategy, dispose of the MAS shares and then allocated towards the 20% share of Mall of Africa. And that contributed towards almost a 11% growth in value that we made in that investment. What is it significant for us? Mall of Africa is the center and the heartbeat of Waterfall. We continue to develop the more continues to trade better. So we believe that it's been an exceptional acquisition for us. And again, it's a slap-bang in the middle of our strategy of allocating capital to where we've got a significant influence and create sustainable income. Post year-end, we disposed our Rest of Africa retail. Pete will give us an update today. And then we're continuing with our repurchase of our shares, 5.4 million shares we repurchased during the year. I think we did quite well at ZAR 9.35 share price. The share price keeps on running. I think it's becoming too expensive for us. But I still think it's a good buy. So keep on buying the shares, Pete, during the year. If we look at our performance highlights, and the team will really, in their respective portfolios, highlight the great results. But the full year dividend per share growth of 19%. Raj will go in, where was the windfalls between our guidance of 12.5% and 19%. But we stand still and we recognize that we've come out a year where we've had a high interest rate environment, we've had an election that was uncertain. And sitting here today, we've got a government of national unity. We've got positivity in the air, almost, I want to say, it's infectious as you feel it. We've had almost 160 days of no load shedding. And all of that sentiment contributes towards the 19%. Distributable income per share is up 19.9%. Our debt matrix have improved significantly. We've received our first public credit rating for the year. Occupancy and collections remain high, and Michael will go into some really cool stats of how our rents and reversions been looking for the year. Got your glasses there, Mike. Now I can see your presentation. The annual trading density up by 5.8%. We're busy with developments at Waterfall of close to 44,000 square meters. And then rooftop solar systems, we installed 12 this year. And just maybe to stand still, Laurence and his team doing remarkable work not just in implementing solar, but we noticed in our center, we talk about [indiscernible] it's our smart utility that the team has developed. It's an API integration that real-time measures and tracks our utilities. So when shareholders ask us why only an 80% payout ratios? I give everything to Laurence and to Mike to further enhance our assets. It's very, very important to continuously reinvest into our assets to ensure that we measure our utilities properly so that we can become an efficient and effective property company. So rest assured, the numbers -- the 80% payout ratio, the 20% we keep back, we really invest responsibly, ensuring that we control and influence and significantly improve the sustainability of the income of our assets. I'm going to ask Michael to share a bit of the SA portfolio.

Thank you very much, Jackie. Portfolio highlights, maybe after your introduction, we can change the purpose in action with all the work the staff has done. So I want to highlight the 2 things in the blocks: firstly, the occupancy in our portfolio has increased to 92.8%. And that has had a direct impact on the NOI growth from the property portfolio. So once again, there's some fixed costs in the property portfolio, rates and taxes and some other costs. And if you fill space that's vacant, you get this natural uptick in NOI. We've also done a good job in containing some controllable costs, and I'll discuss that a bit later. Jackie mentioned our acquisition of Mall of Africa. Certainly, myself and the rest of the team are very excited about that acquisition. We see the pipeline. We know it's coming. There's a lot of expansion opportunities for us. We're going to increase the size of checkers pretty soon. The price is also expanding. We introducing new brands, a lot of them in local brands. And we're also going to focus on our mid-lux category, introducing 3 or 4 new brands in that category between now and February next year. So if you look at that occupancy number and also the increase in NOI, where did that come from? If you look at the top left, you will see our occupancy numbers, we actually had a net absorption of 9,575 square meters. So that meant there was space that was on our books in June 2023 that we were able to fill during this 12-month period. We've also added via new builder acquisitions, another 32,000 square meters of occupied space in the portfolio. Talking to renewals. Upon expiry, you will see that specifically on the retail experience hubs, we had positive reversions in the last 12 months. That predominantly, from a Waterfall corner, which added 10-year cycle in this financial reporting period as well as Mall of Africa. So certainly -- and maybe I can mention some of our other regional assets, where we saw upticks of between 3% and 4% in general when leases expire. So certainly, we are able to pass rents after a few periods of continued good trade by our retailers. On the office section, although we don't disclose it here, on net rental is still increasing. So we see that the actual rental that we are able to achieve in the collaboration of space, increasing, and that reversion number that we see there is, once again, just a factor of the exit rental after a number of years of being in a lease and then expiring. On the occupancy slide bottom left, I just want to highlight logistics hubs. You'll see there, it's at 94%. So at the end of the year, in May of this year, David's team completed the 3 midi-units at Waterfall, and they handed it over to the asset management team. One of those midi-units are filled and so that 94% is a consequence of the 2 mid units that we delivered, but still vacant at June. Strong inquiries on all these units, and I'm fairly confident that they'll be filled soon. Also just consequently, if we look at sort of actions after the year end, 30 June in retail experience hubs, we've concluded another 2,400 square meters of effective leases or GLA leases. So that occupancy number will look better. And on collaboration hubs, we've also concluded another 3,600 square meters of leases. So once again, those meetings will all look much better post year-end. As mentioned earlier, I just want to focus on the gross rental. You will see that over this period, we're disclosing here that those lines are all moving upwards. So we are fairly happy with this result, specifically in the collaboration hubs, where we are seeing the actual level of rental where we are able to transact back to continue to increase. Turning our focus to our retail portfolio in general. You will see that turnover and trading density is increasing over the last 4 reporting periods. And what that has translated into is our effort ratio and our rent ratio declining. Now that is a positive. And effort ratio effectively means the all-in cost of a retailer to occupy that space, so it will include your base rent, rates and taxes, any utilities payable on that space. And you will see that because of the good trade that ratio is coming down. Once again, that puts us in a position to capture some of that rental upon expiry because they are trading at much healthier rental levels. You will see on the previous slide, we just mentioned a couple of awards there. We're really proud of them and the teams in our precinct that manage them. But if we benchmark and compare ourselves to our peers in South Africa, you will see that our retail assets outperformed the benchmark. This is a benchmark over 2 years using the Clur index, and you will see that on a comparable basis for regional, super-regionals and smaller regionals, from a trade perspective, that we have outperformed. This is a very important slide to me. In the top left, we talk about positive net growth versus only focusing our property portfolio. Now we've excluded the municipals for this. The reason we exclude municipals. It's quite a chunky and big expense line, but also there's a lot of pass-through to tenants when it comes to recovering some of these expenses, rates and taxes, electricity, et cetera, So if I exclude that, you will see that we had our rental income grew by 7.6%, and the property expenses grew by 4%. So on a net basis, our actual income increased by 8.3%, and that's quite an important observation, specifically with a lot of pressure on costs in the last few years, potentially negative jaws year. You will see that our property portfolio, excluding municipals, has actually had a net income growth in the portfolio. Turning our attention to the bubble slides we've just disclosed some of the major expense lines here. Once again, just important to note municipal expenses are about 62% of our total cost base. So they are excluded from this chart. But you will see that the major costs, repairs and maintenance, security and employee costs, all of those costs we were able to contain really well in the last 12-month period. Some of the costs that did grow, tenant installations, leasing commissions, those are all signs of active leasing. If we fill the space, we pay the commission. So those expenses are maybe smaller in gross nature, but we are comfortable with the way they grew because we knew -- they grew because of we were filling space. Maybe just to note, again, that insurance cost going up by 51%, a consequence of Sasria and the cost to insure our assets against riots. Well, operational sustainability, Jackie, once again, you mentioned it earlier. It's really interesting, you could still achieve operational excellence while you're having a positive impact on the environment, and the one doesn't have to go before the other one. So as mentioned, we've installed 12 PV systems, 2 of them in retail, 10 of them in the logistics. So all 3 are new midi-units we built with solar installations already done. And I can also say that we kind of are seeing a compounding impact of benefit by focusing on utilities, by focusing on energy management, how we do that. It started with sort of the diesel and the generators during heavy load shedding, but now focusing our attention on what are energy sources, how do we recover that, how can we produce energy, how can we save water, measure it, monitor it and make sure that we contain any losses. And certainly, our teams are becoming much more proficient at managing these costs, and we're quite proud of that. As Jackie mentioned earlier, a big part of what we do is focusing on our clients, also focusing on our people. Our clients are also people. And we do this through a number of ways. We've embarked on a Net Promoter Score this year. We've done 2 Net Promoter Scores already that's directly surveying our client base, the people that sign leases with us. And through that, we gain insights that we can use in our management approach. We also track our Google ratings for a lot of our precincts quite closely, understand where that is going, and we also track the way that we communicate. So that's more from a marketing and a PR perspective, we understand the different channels we use and how many people actually interact with us on those different channels. And that's it from me today.

David?

Good morning, everybody. So I'll unpack the developments individually on separate slides. But I think I want to just focus on some of the highlights first. So I think as Jackie touched on earlier, I think a very important transaction for us this year was concluding the buy up to 50% of Waterfall Junction from 23%. This gives us essentially a runway up to an effective share of over 300,000 squares of logistics bulk. The entire precinct is about 630,000. We started this process with the infrastructure 5, 6 years ago. And as of today, we connected our pipe, water pipe to the Rand Water pipe. So essentially, from today, we can start getting really serious on future logistics developments. Hopefully, with the Section 82 coming through now back end of the year, and there's been a real uptick in proposals on that lab. So we're very, very excited I think it adds a new dimension to the development space. So congratulations to Laurence and his team. It's been a hell of a long road. Another component that we did this year was we really looked at the urban design framework. Essentially, we're just trying to create flexibility here. Developments change, clients needs change, and we thought that the landowner was the opportune time to look at this. So we've updated that. Then from a development space, as Jackie said, we've got 43,000 squares or ZAR 1.7 billion in development activity. If you look at the other 3 projects that we've completed this year or 5 buildings, if you include the 3 midis, that totals just over 67,000 squares and ZAR 2 billion. So it's been a busy year. Some nice pipeline deals. So under the pipeline, we've got Vantage. So I've spoken about this mystery development for 6 months. I can talk about it now, but it's the Vantage development. We have started building there, but obviously, at the end of our financial year, it was still pipeline. We're also on the back of really good success and robust sales in Ellipse. We have decided to launch a new residential scheme attached to the Mall of Africa. So that is with Tricolt, and we'll be launching that in February. I'm not going to focus too long in the slide. You guys have seen it. I think there's just 2 key components that I want to just touch on. So obviously, the future development is going to be focused at the red, which is the logistics, which is Waterfall Junction. And then the second is obviously your blue, but the blue around the Mall of Africa. I think it makes sense now that we are 100% owner of the Mall of Africa, that we focus our efforts on developing and densifying around them all. We've got quite a number of bulk proclaimed in service there, which is obviously costing us on holding costs. Hence, one of the reasons also why we are launching the new residential scheme attached to the mall opposite Ellipse. So I want to focus some of the developments individually. This is a development you guys are quite well aware of. This is Nexus where we're sitting. So it's 5 collaboration hubs with the hotel. We completed the DP World turnkey development this year. We like to think it's our premium collaboration hub. And I think if you see at the type of tenants that Debbie and her team have put in here with AWS and DP. I think it talks to the quality of this and -- we don't like doing turnkey sale developments, but I think the DP World transaction made sense. And on the back of that, we created a really strong relationship with them, and Debbie and her team have done a further 6,500 squares of letting in Waterfall View. Amrod, -- most of you will probably be well fair with Amrod, -- it's on the highway. It's probably our most sophisticated warehouse we have in our portfolio, an iconic building, very big, just over 40,000 squares, predominantly automated, which is unique for South Africa. They were a pioneer in the space. We've just done the extension there, which is just over 3,500 squares, fully air-conditioned for the [ embroidery ] business, and we do have the ability to build further 3.5% on top of the current expansion. These are the midi-units that were completed. So this is LP9 South. Why do we build 3? Well, essentially, to get economies of scale, it makes sense to build closer to the 15,000 square mark rather than 4,000 -- so they vary between 4,500 to 5,200. We decided to do this on the back of the success of the many units we did about 5 years ago, and it allows us to bring in a different type of clients and obviously grow with them. Obviously, as everybody knows, water is a new challenge that we're dealing with and this facility is designed to cope with that. So we've got 4-day backup water there, and it's obviously rainwater harvesting compatible as well, which is a big focus for my team going forward. This is a collaboration hub development in Ingress. So this is where PSG is based behind the current development -- it's certainly been a bit of an uptake or an acceleration in the office space market in the last 12 months, certainly not where we would like it, but there's definitely green shoots coming through. We have -- as a management team, I think we were lucky as we control supply at Waterfall -- unlike other of our competitors. So we decided that if we are going to roll out new collaboration hubs, let's focus on where we've got land that's reclaimed, infrastructure that is spent and that there's development spend. So when we rolled out the first 2 Ingress, buildings, we had to build a large basement. So this building 3 now is on top of the remainder of that basement. I think what's important from my team and helping Debbie and her team with the letting is we've got to provide as much flexibility as possible. Hence, why this building is designed to have 1 tenant up to 16 tenants. Ellipse -- so Ellipse has been a huge success. I think what we're extremely excited about is that our resilience has stood up in a high interest rate cycle. It's a big development, 670 units. It's a lot of units to sell. The phasing obviously helps, but we're now in the last phase, which is 220 units. All the retail in Phase 2 is now let. It's essentially our first street retail that we've done here at Waterfall. So I think that gives us good excitement for the future of our future street retail. And I think what's also positive is that post the elections, we also saw a little uptick in sales. So I think the elections have been positive. And also, we started building 6 months and when buyers can see a structure coming out of the ground, it gives them clarity on when they can take occupation of their units. So on the back of this success, we've essentially decided to go on launching a new res scheme, which I'll talk to. So this is Vantage. So this is on the corner of Allandale on the N1, probably one of our -- or the most prominent logistics sites we have here at Waterfall. So transaction, we started probably 4, 5 years ago, trying to get cost estimate letters with the power. We then sold 50% of the leasehold rights to Vantage Data Centers, which is a large multinational data center providing company. We rolled out Phase 1 about 18 months ago, which you can see there, and we signed a lease with Vantage on the Dark Shell, which is essentially the shell-on-core of the building, about 4, 5 months ago. and we have started construction there -- essentially going to be a mirror of the current building, just over 10,000 squares of GLA, although it's not measured like that. It's more measured on the power. But just to give you an idea of the scale, -- and yes, I think it's a fantastic allocation of capital. It's a fantastic partner. I think it's a prominent site, and we're very excited about the future. We've got post this, we've got an data warehouses if we get it approved through IC to roll out on the site. So this is the new residential scheme attached to the mall. We are very confident in our partner in Tricolt. So we have gone with them again as a JV partner here. It's going to be an iconic building, but obviously, the financial metrics need to work as well. It's going to be the second tallest building in Waterfall behind PwC at 19 stories. And a couple of unique things there. Obviously, attached to the mall -- I think, obviously, we only had residential rights here, but I can move the residential rights anywhere around them all. But it made sense here, we're trying to densify the city from the western side to the east. So this is essentially taking a picture from Ellipse Also, we are trying to create now that walkable city, that street retail. So you'll see at the bottom, there's a large piazza there. We're trying to -- with the Karkloof Road, which is the road surrounding the mall to really try and activate that. And that's obviously our first start to it. I think also, as I mentioned, the transaction we did buying up the remaining 20% of the mall, it makes sense now to start trying to densify the all, try and really take the mall to another level from a trading point of view. And then this is Waterfall Junction. So large site, 600,000 squares, -- as I said, the water connection is now connected. We are hoping to have Section 82 by the end of the year at the latest. This will unlock Phase 1, which gives us 150,000 squares of bulk. The inquiries here have been phenomenal. We just haven't been able to execute because, obviously, the delays on the infrastructure. But at the moment, we're looking at transactions across Phase 1, 2 and 3. So I think this is really going to give our area a new arm. I think we're very positive in the logistics space. I think there's still a long road to go there. I think it's coming from a very low base in South Africa. -- and also with the change in logistics with the South African companies having to bring in country, I think with the K113 and the mass amount of land that we've got to that we can scale, I think it's a very, very exciting project. With that, I'll hand over to Pete.

Thank, David. Good morning, everyone. It's the customary 1 slide on the Rest of Africa retail investments. I think all that's really been happy is the numbers are now getting smaller. To give an update, those of you who watched SENS on the 12th of August, we announced that we have entered into binding sale agreements with Lango Real Estate to dispose of our entire Rest of Africa retail investments in return for Lango shares. So that will mean that we dispose of AttAfrica, in which we've got a 26.88% interest. And in so doing so, we dispose of all of the Ghanaian investments. And then we also disposed of the shareholder company that we own into Gruppo, which is the owner of Ikeja City Mall. As I mentioned, that in return for Lango units. If both transactions close, we will end up with approximately 4.3% of Lango, as in large, for this transaction. As I said, there are 2 separate transactions, so they can close separately and they do have different time lines associated with them. If we look at the key transactional conditions, which have yet to be met, in respect of the Ghanaian disposal, the key consent that we will require lender consent. There is property debt in at Ghana level, the propco level, as well as in Nigeria, there's also property debt there. So we also require lender consent for the Nigerian transaction as well as a Nigerian Competition Authority approval. If we look at how this translates into numbers, as we have binding sale agreements which are highly probable at 30 June, we have moved these assets to held for sale, and we have reduced the carrying value to the value of the Lango consideration shares to be received. So from a June '23 to June '24 perspective, there is a significant write-down from ZAR 557 million to ZAR 287 million, if ever you take into account that as at December of '23 in terms we'd already taken the decision to write Ikeja down to 0. So from December to June, the impact on NAV is much lower, but nonetheless, we have taken a substantial write-down during this period. From a timing perspective, we'd like to think that we can have gone a transaction closed out prior to the end of this month. And obviously, from a Nigerian perspective, we're in the hands of the Nigerian Competition Authority, that's going to be the longest dated approval. And hopefully, that can be implemented prior to November 2024. However, that is a guesstimate on my side, but hopefully a conservative one. And with that, I'll hand over to Raj, who will take you through the financial side of the things.

Thanks, Pete. Maybe before I go into some of the financial highlights, just a big thank you to all of the Attacqers here sitting today, specifically the finance team that made this results presentation possible, some of which working until 4:00 a.m. this morning and haven't had a chance to go home to shower. So if you're sitting next to them, my apologies. Personal hygiene is right there, but financial performance is more important at Attacq. I think in a year like this, you've got a lot of financial highlights to talk to on almost every single metric. We've had an absolutely phenomenal outcome. Jackie talked about distributable income, up by almost 20%, the dividend just shy of 20% growth. And then be shifting to the balance sheet, group gearing at 25.4%. I see a lot of bankers here that are pretty sad about that metric. But we've paid -- in the last 11 months, we've repaid ZAR 2.9 billion worth of debt. We've refinanced at lower margins, about ZAR 4.1 billion. You can see in the last block there, we've embarked on the credit rating, which we finalized in the last couple of weeks, achieved an A+ rating. We're almost done with our program memorandum and we're probably going to able to launch our DMTN program in the next 30 days or so. So a really big time for us in the last 11 months, I think we've achieved a lot. If you look at the bottom right graph, I think tells a really good story. And I'm not sure if all of our peers in the sector have a similar sort of shaped graph. Interest cover ratio now above 2.3x. And our margins coming down substantially since June '22. And I think the next phase of our debt reduction -- cost reduction program will make that even look better next year. At a high level, our distributable income per focus area. Waterfall City growing by 20.6%. This contributes roughly 58% of the group's distributable income. A couple of good stories here -- higher NOI, reduced finance on the back of us repaying the substantial amount of debt, and that has been offset by an introduction of a 30% minority for the first time being the GEPF as a shareholder in AWIC. If you look at Rest of South Africa, that's grown by 72.2% and contributes roughly 42% of the group's overall distributable income. Similar driving factors there, higher NOI, reduced finance costs, but also we've had to -- for the first time, the introduction of a minority shareholder has necessitated us to proper split of operating costs, the head office cost between the entities and on the back of cost recoveries from Waterfall City that's contributed to the sort of sized contribution by Rest of South Africa and it's substantial growth. If you look at other investments, a small loss of ZAR 2.5 million as a result of really MAS not contributing to our financial results this year. Last year, we included a material dividend from MAS. From Rest of Africa perspective, that particular segment hasn't really contributed to our distributable income over the last couple of years, and hence, not making a contribution this year as well. In total, distributable income growing by 19.5% before the inclusion of our profit on sale of sectional title units of ZAR 7.3 million. We've had a relatively small number of units transfer in this financial year. To Dave's point, it's been a phenomenally successful development. The next phase that we're in the ground [ for ] will be completed in FY '26, and then we'll see a substantial contribution in FY '26 from the sale and transfer those sectional title units. Total income growing by 15% to ZAR 613 million in total. And on a per share basis, distributable income growing by 19.9%. The difference between that and 19.5% is what Jackie alluded to the share buyback program that we've embarked on towards the back end of the last calendar year. If we look at our distributable income bridge from last year to this year. Last year, we had ZAR 506.8 million. Like I said, the introduction of a minority shareholder has contributed to an allocation of profits to them of ZAR 105.8 million. The MAS dividend, obviously, no longer features, which then was a negative ZAR 69.6 million. We've had higher operating expenditure of ZAR 23 million. And then maybe spend a few minutes just on taxation. So for the first time this year, we've had some tax leakage of just under ZAR 8 million. You'll recall that a number of our operating subsidiaries do have assessed losses. SA, however, has introduced a limitation on assessed losses, which has resulted in some tax leakage, meaning that you can only use your assessed loss to apply to your taxable income up to 80%, which means to the extent that you're not paying a full distribution, roughly 20% of your remaining taxable income will then be subject to tax. Those 3 subsidiaries, the effective tax rate works out to just under 1.1%, so a relatively small amount. And looking forward, we don't expect this number to materially change at around the sort of ZAR 8 million mark. An aggregate of a number of small movements contributing to ZAR 14 million positive contribution. NOI growth contributing to ZAR 116 million, a number of initiatives there. I think our PV rollout and a contribution to better recoveries from municipal costs, higher NOI from growing portfolio. So some of our developments that were completed in the last year now featuring for the full 12 months in this particular year. So I think a number of good stories there. I think also from a retail perspective, we've seen turnover rentals surprised to the upside. So I think a number that we're quite focused on both from an efficiency perspective and a rental growth perspective, and happy to see that [ going ] by ZAR 116 million. Net interest savings, so this was the big adjustment to our numbers year-on-year or the variance that was on the back of paying down a significant portion of debt. And obviously, the contract to that was the introduction of the GEPF, which obviously then allocated the minority aspect to them. That gave us the total distributable income of ZAR 605.7 million. The additional ZAR 7.3 million from our sectional title units give us a total income of ZAR 613 million. If we apply an 80% payout ratio to our distributable income, that means we'll have a total dividend, including the interim dividend that we paid out already of ZAR 483 million, leaving us just under ZAR 130 million to reinvest in the existing portfolio. From a balance sheet perspective, Waterfall assets contributed roughly 2/3 of the total balance sheet at about ZAR 15.3 billion, a substantial increase there of 16% and -- but you'll recall that on the last day of the financial year, we acquired the remaining 20% share of Mall of Africa. So that's features on the balance sheet that didn't contribute to the income statement. And that was an acquisition price of ZAR 1.07 billion, and so contributing to a significant portion of that growth. The other aspects of growth was our fair value adjustments across the portfolio, both retail and collaboration hubs contributing positive fair value adjustments and I'll unpack that in forthcoming slide. Rest of South Africa also showing good growth really on the back of collaboration hubs and the rest of retail assets that we've got in the portfolio are performing really well from a fair value perspective. Head office cost -- rather, head office assets, moving down to ZAR 516 million, really on cash balances and other investments, largely driven by the Rest of Africa transaction that we've signed with Lango and writing down those assets down to the held-for-sale value, being the value of the shares that we'll receive from Lango. That gives us a total asset base of just shy of ZAR 22.9 billion, growth of 4.8%. Total liabilities reduced substantially on the back of the debt reduction by 22.9%. That gave us a total equity of ZAR 15.6 billion, but that includes the minority shareholder contribution and the investment in Waterfall. The amount attributable to owners of Attacq is ZAR 12.5 billion. And on a per share basis, that is ZAR 17.93, which equates to a 1.6% NAV growth period-on-period. I'm just quickly talking to our investment property movement. You'll see there's a substantial uptick year-on-year. If we had to just explain that with this bridge, ZAR 35.6 million as a result of our right-of-use assets on the back of our lease of land that we've got in Waterfall. The addition of Mall of Africa, 20%, of ZAR 1.07 billion. CapEx that we've spent in the portfolio of just under ZAR 351 million. And then fair value adjustments over the 3 sort of major elements, completed buildings growing by just shy of ZAR 900 million, a really good story there. Developments under construction, showing a negative fair value adjustment of ZAR 21.3 million. That's as a result of the 3 midi-units, of which 2 were not led by balance sheet date. And hence, we've taken a little bit of a knock there, But I'm comfortable that once we let those buildings, they will show a positive fair value adjustment. The leasehold land also reducing by ZAR 47.1 million on the back of some approvals that will take a little bit of time to come through. And we're expecting that ZAR 47.1 million to reverse in the future. That gives us a total investment property value of ZAR 19.9 billion. I'm not going to spend too much time on this. I think we've chatted through a lot of this already. But just I think what certainly stands out here for me is that we've got miles of headroom within our gearing covenants. If we look at our gearing covenants set at 50%, we're only at 25.4%. Interest cover ratio set at 2, and we're going to have 2.3x. Both those ratios are expected to be very healthy next year. So we don't expect our gearing ratio to exceed 3% in the next 12 months, but we are expecting our interest cover ratio to further improve to more than 2.6x in the next 12 months. If you look at our hedging, maybe something else just to chat about between this and the next slide. You see that last year, our hedging percentage was fairly low, and that was on the back of the GEPF transaction, that we're anticipating to close after balance sheet date. So we didn't want to put on any hedges. But once we settle the debt, we'd be in an overhedged position. We've maintained our hedging percentage at our absolute minimum policy level of 70%, and that was really strategic, and I think we're going to yield a lot of positive results in the next 12 months. Which takes me to my next slide, this is our debt and hedging maturity profile, nothing really coming up from a debt perspective. But if you look at our hedging, almost 50% of our hedges come off in the next 12 months, almost ZAR 2.3 billion worth of hedges. And if you look at our hedge roll off in terms of weighted average cost of hedges, we're currently at 7.7%, and the current 3-year swap is at 7.2%. So the opportunity for us is to replace those hedges at an average reduction of 50 basis points. So I think a really good story for us from a hedging perspective over the next 12 months. I talk to it, the DMTN program, a huge focus for us. We're targeting the end of October for that to be launched. And then the only portion of our debt that had been refinanced is the ZAR 1.3 billion relating to the PwC head office. There, we've signed a term sheet with one of our lenders, and we're expecting to implement that in the next month or 2. And it will also yield roughly 40 basis points, lowering our cost of debt.

Thank you, Raj. Ending off, looking into the future. We call it Project Horizon 2030. I believe to have a long-term future and for a collective shared vision for our teams to work at. We're a purpose-driven company. I believe that the impact that we make, we need to make our communities and the spaces, and our clients will always stay with us. Our mission is very clear, we want to be the best. We want to be the best precinct developer/owner, leveraging off the great innovation that our team constantly puts forward. And our vision is to be client-centric and also be the trusted real estate partner. We will walk away from deals, we have walked away from deals, if we don't have shared value or shared purpose. And that too, we want to be known for. A team that can do with deals on a handshake and can be trusted with what we do. What looks the prospects for the next 12 months? 17% to 20% distribution income per share growth is expected. 80% payout ratio, that's not [indiscernible]. That will be decided towards the end of our next financial year. And how would we achieve this incredible growth set for the next year? As shareholders, we've only had an 8-month impact of the GEPF transaction, so that will be a full year impact of the GEPF transaction. Mall of Africa, 20% stake income will be reflected in the numbers. And then which I also call sensible deployment of capital. The development rollout, we will continue with acquisition of key assets. Green initiatives will continue to roll out. Share buybacks, we will continue as an long the share price makes sense. And recycling of assets, certain of our assets in our portfolio we'd look to recycle within South Africa. And I believe that with this and our strong principles, our strong vision, we will achieve our 17% to 20% guidance for the year. I'm going to open up the floor for questions. But before I do that, thank you once again for everyone's time. Thank you for everyone online for attending our results. Thank you once again to the team. If you press for time and we don't get to all the questions, I promise you we will either phone you or e-mail you back if we run out of time with questions. But once again, thank you, and I open up the floor now to questions.

I'm sitting with all the questions. We'll kick off in the order they have arrived in. Firstly, Nazeem from Investec. Can you provide us with an update on the Cell C lease, risk of vacancy in FY '26? Do they intend to stay? If so, is there a risk to renew if compared to market rentals?

Yes, I can take that question. I don't know if you've all seen Cell C's quite recently rebranded Lucky #13 CEO. I had a privilege of drinking coffee with him yesterday. First question is, are they paying our rent? And I think I'm going to answer this, yes, they're 100% up to date with their rentals. The team has been growing from strength to strength. They shared also the management accounts with us on a monthly basis. Raj gives me the highlights package from the monthly management accounts. It's definitely a team, and I think shareholders in their business that we can see that's dedicated and focused to turn that business around. We are starting to see really great green shoots in that business. But I'm not at liberty to talk about the Cell C business. They have all indications to stay in the building. They are occupying the building to full capacity. I know that they're on a big acquisition drive in terms of staffing, and they are talking to us to a lease renewal at coming to the end of the lease. They have also confirmed that the bullet payment towards the end of December will be paid by us, and we've got that in our cash flow also programmed.

Thanks. Also from Nazeem, what is the asking rental for midi-units not let?

I'll take that. Just -- I mean in a public forum, we are close to concluding deals on both of them. So we do not potentially prejudice those deals before they get signed. I will rather say that it's in line with our expectation when we approve the buildings. But both of them are really close to being signed. And I'm happy to confirm that in one-on-ones.

Thanks, Michael. Nazeem, you left to wait for that answer.

I need to confirm a one-on-one win with us.

I can give you a range, it's [ 50 and 100 ]. .

Also from Nazeem. He was obviously quick on his keyboard, yes. Slide 17, cost of completion is provided, but how much capital is required to complete given that some CapEx is already spent there?

I've done a quick and dirty number, but I can give you the exact number post this. But roughly, we're looking at about ZAR 430 million. So I think it's important to acknowledge that we're not majority shareholders on the res schemes. So the new res schemes, we had 25% and obviously Ellipse, we had [ 20% ]. So that's the big difference, and we're obviously 50% advantage, and then the Ingress of the collaboration hub, we had 100%.

Okay. Thank you, Dave. Lorato from Momentum. Why are you disposing of your Rest of Africa retail assets? Will your property portfolio only be limited to SA after disposal these assets? I'll take that one briefly. From a Rest of Africa perspective, if you look historically, these are assets which have not been regular providers of income. Obviously, as a REIT, we are very focused on the income. And also our view in the short to medium term is, if we had to hold on to those assets, they're also unlikely to provide us a lot of income. So we have now taken the opportunity to exit, albeit for Lango shares, but it then becomes a much more passive investment and potentially more liquid, and something that we can exit from in the short to medium term as opposed to a very difficult shallow market for the types of retail assets that we own currently. So yes, that would mean that in the after disposing these assets, we would be limited to SA at this time? Next question from Nazeem. Follow-up on his previous question. Someone just got in a bit earlier. Does this represent 100% of your capital or your portion given AWIC's 70% ownership? I think Dave has already touched on that, but we'll go through those numbers in more detail if need be. [ Sandile ] from [indiscernible]. What is the plan with the stake in Lango? The plan would be to exit that stake as soon as practically possible. However, we may need to wait for Lango to achieve its objective of listing in the next 2 years. And -- but we'll obviously evaluate that as really as you possibly can. Question for Raj, also from Sandile, what drove distributable income growth of 73% from the Rest of South Africa?

Yes. So I think there's a couple of factors, a lot of it came from NOI. So we had good rent -- turnover rentals coming from our retail portfolio -- our PV installations contributing very positively to our overall NOI as well. But in addition to that, I alluded to it, I think for the first time with having a minority shareholder in AWIC, we've had to ensure that our cost base is properly allocated between AWIC and the Rest of South Africa. So previously, everything was 100% controlled and some of the costs were sitting in Rest of South Africa. But now we're recovering that in a pro rata percentage basis as well as having an asset and property management agreement in place and so earning some fee come there. So those are the key drivers for that.

Okay. Justin from PSG. Congratulations on very high-quality results, well deserved. Question one, what is your expectation for getting distributions out of Lango in the short and medium term? From our perspective, we haven't penciled in any distributions in our guidance that we've given. We'll have to see how the -- I think, especially the next 6 to 12 months in Africa play out. So for that reason, we're being fairly conservative. But going forward, I think hopefully more than what we're getting out of our own assets, but we're probably looking at maybe 3% to 4% in current numbers. Question two, what proportion of F '25 growth guidance is attributable to the Mall of Africa minority buyout?

Yes. So I mean we bought it at roughly an 8.1% forward yields, that translates to roughly a ZAR 86 million contribution to distributable income in FY '25.

Okay. Question three, please comment on the likely growth potential that still lies ahead of Attacq beyond FY '25?

Yes. So I think -- I mean, without putting out formal guidance, I think we're usually positive about FY '26. A number of, I think, good tailwinds for us, a very strong balance sheet to support what Dave alluded to, which is a really strong development pipeline focused around logistics, hubs and data centers. Having the water connection confirmed this morning, it really is just a formality between now and the end of the calendar year to be able to start actively marketing it. So Dave has talked about some of the inquiries that we've had that has been without us, actually putting the land in the market. And so very positive about what the development pipeline is going to contribute to our overall distributable income in the future. I think looking at our debt, our hedging, our initiatives around reducing our cost of debt, I think that's going to be another great sort of tailwind to help us over the sort of 24 months, and that's going to be usually positive. And then I think if you look at the overall portfolio, just maybe pausing on retail, if you look at one of our slides at the back, our rent turnover ratios and our effort ratios, a little bit on the low end, which means that I think it gives us a great opportunity for us to have positive reversions as and when those leases come up. So I think we're positive on 2026 and beyond. And I think we're in a unique position relative to maybe our peer group to have a good development pipeline with the interest rate cycle coming down, positive sentiment. And I think that's going to drive a lot of the growth beyond -- from 2026 and beyond.

Question from [indiscernible] from MSM. On the sustainability side, you have forecasted 25% of your energy mix to come from renewable energy. What is the period of this forecast?

That's 2030.

Okay, 2030. Question two, quantify your future solar PV insulation pipeline?

So it's -- I think most of the solar where we, I think, possibly have roof space that's viable. And I use the word viable as a very important word because you can't just put solar -- 3 solar panels in an office park, it's inefficient. So that's why we could install almost 10 solar panels on our logistics warehouses for this year, all the warehouses that did not have solar panels we installed. All of the future development work, we will certainly ensure that they've got the appropriate solar. A big component of our future renewable strategy is through our power purchase agreement that we've signed. The plant is currently being constructed in the [ ore ], that will contribute 15-megawatt of power, of green power towards our portfolio, and that's how we're going to meet that the targets that we've set of 25% renewal energy.

Okay. And then also on that way, can you quantify the impact of installed solar on NOI?

Very difficult to quantify that. We are currently busy quantifying that. So give us a few months, net results. I'll keep my promise. We'll put a slide out in quantifying exactly that. Some of our plants are not yet switched on, but our team is definitely working on through our API integration and how we measure the specific impact. I work with engineers, so they want to be, to the T, 100% perfect. So we're waiting for those numbers.

Also [indiscernible]. For Dave, quantify the development cost and yield with the new Vantage Data Center developments?

Okay. So it's a CapEx-linked transaction, 9%, so our clean yield is 8.5%, obviously, with the Premier's land lease. We are only involved on the Dark Shell, which is essentially the shell on core. All the white space, which is essentially the tech, Vantage do that themselves.

Thanks, Dave. Louis from 36ONE. Why do you feel you need offshore strategy? Most investors can buy offshore up to 45% themselves.

Yes. I completely agree with Louis. And as I said, we're not rushing off to go and invest somewhere in a different country. But what is on our radar is we're looking at certain jurisdictions. We're looking at those local players and we're looking at potentially something to bring to the market that you cannot access off a JSC or through certain platforms. But it's very important it needs to fit our purpose and our vision and our strategy for Attacq, significant influence, sustainable income. And if that opportunity is on our doorstep, we might not go overseas. So it's not a set strategy, we're not fixated of going overseas. But we do believe that going beyond 2030 is we need to investigate further growth avenues further than in Waterfall City.

Thanks, Jackie. I think that touches on your question. So I'm not going to deal with that one. From [indiscernible], we've got a question, what are your expected synergies or benefits from acquiring the remaining 20% share in Mall of Africa?

I can maybe chat to that. I think for us, like I mentioned before, I think it was a bit of a no-brainer to buy the remaining 20% of Mall of Africa, and it was really just around price, and the reason for that is, I mean, we continue to build out Waterfall City. David talked about it, the next residential development will be on the Mall of Africa's site. We've got a number of other developments that we've earmarked, which he hasn't chatted about. Gateway East, which will have a retail element and an office element. We're looking at a potential conference facility, et cetera. So it makes sense for us to own 100% of the mall and capture all of the benefit as we roll out more developments in Waterfall than have a minority shareholder not contributing to the growth of the city, but capturing the foot traffic and the turnovers, et cetera. from our initiatives. So that's really the key sort of synergy or upside from acquiring the remaining 20%.

Thanks, Raj. From Francois, Anchor, Firstly, congratulations on a great results. Can you indicate the initial rental yield you expect on the newly developed many logistics units at current book value for these? Mike, you got that number?

Can you indicate the initial rental yield?

Yes, initial yield on the current carrying value.

Raj, can you help me with that?

I think it's about 8.5%.

Yes, about 8.5%.

Can you discussed the lease dynamics, including net rental yield, escalation and lease duration for the data center development? So David...

Lease term...

Yes, rental yield, I think you touched on installations and lease duration.

Yes, the lease, I can discuss; the other items, I cannot. So the lease is a 20-year lease, and then it renews a further 20 years indefinitely. Yes.

From [indiscernible], what is the rationale beyond the repurchase of the 5.4 million shares? And how does this fit into our overall capital management strategy?

I can chat to that. So I think we announced to the market almost 12 months ago that we believe the share is severely unpriced and that we were looking to do a share buyback. So we've managed to mop up roughly ZAR 5 million worth of -- 5 million shares at an overall cost of about ZAR 50.1 million, an average price of ZAR 9.35. And I think it's 2 things. I think it's, one, sending a signal to the market that we believe the share price is undervalued, and it's perfect insiders to our business, understanding what the outlook looks like, buying a share at ZAR 9.35, but you think it's valued at ZAR 14 plus. It's a great way to allocate capital. But it's not the only allocation of capital. And so it's a balanced view, and Jackie had it up on the slide, and we're looking at potential developments, acquisitions, and share buyback that will always feature there, but it's not going to be a material portion of our capital allocation.

Yes, I think we'll be sensible about how we allocate the capital towards that, but opportunistic.

Thanks, Raj. Another question from Nazeem, which is his last one apparently. What -- and also for Raj, what is the hedge swap rates on the 50% of hedges expiring in the next 12 months? And what is currently being offered on 3- and 5-year swaps?

So Nazeem, if you were listening carefully, you would have gotten the answer already, but because we know you so well -- just joking. So definitely, over the next 12 months, we've calculated the weighted average fixed rate to be 7.7%. The 3-year rate is about 7.2%. And I think the 5-year rate might be around 7.3%, 7.4%. So definitely, in the immediate 12 months, there's a significant spread between hedges that are rolling off and what we can replace them with. Looking beyond the next 12 months, I don't have the data with me. But potentially, those rates are not significantly different. So they're probably somewhere between 7% and 7.5%. So again, definitely an opportunity for us to add additional hedges and reduce the overall cost of debt for the group.

Thanks, Raj. Okay. Final question online before we move to the floor. If there are any other questions coming online of this, we'll pick them up and respond to them individually later on. From [indiscernible] from [ COMESA ]. Can you speak to -- on tenant segment's performance? Why was footfall in April weak across most retail centers? Maybe Mike, you want to take that.

I'll tackle that. So the March and April was due to the timing of the Easter weekend for this period. Some of our assets are situated in towns like Stellenbosch and George and, of course, Easter weekend mean school sports, et cetera. So that shift between March and April was quite apparent for us. If I talk to tenant segment performance, once again, sort of grocers and food segment performed really well, the likes of the Woolies and the Checkers in our portfolio. Health and Beauty also performed really well for us in this period, growing at 12%. We had some additions there to the tenant mix schemes, Beauty on TApp. So it's sort of bolstering the turnover in that segment. I think, interestingly enough, apparel, which is quite a significant category, showed a negative 0.9% growth in our portfolio. The reason behind that is that the winter in South Africa was pretty late, so we started seeing this happening in April, the beginning of May, where the turnovers from our retailers really were below where they were in the previous period. And once the cold came sort of by June, they could get rid of some of that stock. So that's the major things that we saw in the last 12 months.

Thanks, Mike. We open the questions to the floor.

Questions?

[indiscernible]

Yes. So Ellipse is obviously a massive development. I mean it's 3 phases, 4 buildings. So you need to be very content with -- that you can sell all those units. Look, on Aspire, it's only 220 units. So it's the same size as the last phase of Ellipse. So I think it's very manageable. I think where we're a little bit different here is there's definitely going to be a more of a mixed-use element. So obviously attached to the mall brings that, but also then obviously, we're creating all that retail at the bottom and then we're also creating a public sort of residence club as well. So there's definitely going to be a drive in the mixed-use space. And I would say the product is a slightly higher spec than Ellipse. And then we've obviously also taken the learnings from Ellipse. So we'd be silly not to see which units we battled with. So I think we focused a bit more on the 1 beds. We've changed the design on the 2 beds a little bit. And then obviously, we still create that ability to interchange all units as well.

Price point...

We're still working on that. But as I said, it'll probably be a little bit higher than Ellipse's current prices, yes.

No further questions. Thank you once again for your time. And we are available afterwards for also answering any one-on-one questions. And we look to forward catching up. So thank you very much.