By Lehlohonolo Lehana.
The Government Employees Pension Fund (GEPF) is close to reaching financial close in its R2.7 billion deal to acquire 30% of the property group Attacq-owned Waterfall City mega-development in Gauteng.
This was confirmed by Attacq on Thursday, buoying its share price by around 4% in afternoon trade in the JSE.
The deal now awaits shareholder approvals, and if granted, will see the GEPF (via the Public Investment Corporation) acquire a 30% stake in Attacq Waterfall Investment Company (Awic), the listed Real Estate Investment Trust’s (Reit) wholly owned subsidiary.
The transaction is in line with Attacq’s strategic ambitions to bring on board a long-term investment partner to Awic, which will be instrumental in securing funding for its ongoing development rollout of Waterfall City.
“The effect of the proposed transaction, if implemented, is that Attacq will retain control of AWIC with a majority shareholding of 70%, with the (PIC) holding a minority shareholding of 30%, and Attacq continuing to provide asset, property, development and fund management services to AWIC at market-related fees,” Attacq said.
Attacq said that it would use the proceeds of the sale to settle R2.2 billion of debt in AWIC and around R500 million of debt in the rest of the Attacq Group.
While the preliminary purchase price is in flux, and the final price is still to be determined, the maximum price set for the deal is R2.688 billion, including the R300 million loan.
The entire Waterfall City development has an asset value of R15.2 billion, including the R5.2 billion Mall of Africa and R1.9 billion PwC tower.
Of this, AWIC holds approximately 80% of the asset value, totalling R12.25 billion. However, in terms of Net Asset Value, deducting R5 billion in interest-accruing debt, its NAV is closer to R6.4 billion.
Waterfall City currently has a multitude of developments under construction, including the Ellipse residential hub, Nexus collaboration hub and expansions in the city’s logistics hub.