Real estate investment trust (Reit) Attacq on Tuesday announced an 11.1% increase to its interim dividend to 45c a share, which positions the group to deliver at the upper end of its full-year guidance of between 8% and 10% growth in dividends.

Building on this positive performance within an “extremely negative” environment, Attacq’s core distributable earnings a share increased by 23.9% to 49.8c a share.

However, the group decided to rather declare a dividend of 45c a share and retain the balance to fund capital expenditure.

According to CEO Melt Hamman, the results achieved for the six months to December 31, “attest to the success” of the company’s strategy and the quality of its portfolio.

Attacq’s South African portfolio, comprising retail, office and mixed-use, light industrial and hotel properties, delivered strong results despite the subdued operating environment, with the average trading density for the year having increased by 5.7%, while the Mall of Africa, in Midrand, continued to perform well with a 10.1% growth in trading density.

COO Jackie van Niekerk said the Mall of Africa had delivered “impressive trading growth and increased footfall” as a result of the Waterfall City densification.

Net profit from property operations, excluding the International Financial Reporting Standards (IFRS) adjustment for straight-line leasing and profits from the sale of sectional title units, increased by 16.7% to R745.2-million.

On a like-for-like basis, net operating income increased by 7.6%.

Waterfall, meanwhile, remains a key driver in Attacq’s core business with six buildings, with a primary gross lettable area (PGLA) of 18 642 m², completed during the six months under review.

Another six buildings are currently under construction, and include the Deloitte head office, Waterfall Corporate Campus office park, Ellipse Waterfall, Nexus Courtyard Hotel, as well as the Nespresso warehouse.

The six-storey, 42 500 m² Deloitte building, in particular, will welcome about 3 200 new employees as of April 1, 2020.

Attacq development head Giles Pendleton on Tuesday said the Ellipse Waterfall building was the “new iconic high-rise luxury apartment development in the heart of Waterfall City, spread over four towers”.

Construction of 269 units has started, with expected completion in the first quarter of the 2022 financial year.

During the six months under review, Attacq received cash dividends of R121.2-million from its investment in MAS Real Estate, up 24.5% from the prior period. This investment provides the group with geographic diversity by providing it exposure to the higher growth markets of central and eastern Europe, Hamman said on Tuesday.

He reiterated during a media briefing that Attacq continued to focus on its key drivers – namely the South African portfolio, developments at Waterfall and the MAS investment – to remain “defensive and deliver long-term shareholder value”.

Hamman indicated that the company intends to exit its ‘rest of Africa’ retail investments, and that the proceeds from this would be used to reduce its debt levels in South Africa.

Looking ahead, CFO Raj Nana said distributable earnings a share for the full-year period, ending June 30, will be at the upper end of the company’s guidance range, being about 10%.

The unaudited guidance is based on the assumption that the group will be able to achieve the forecasted rental income; contractual terms and anticipated market-related renewals; as well as that tenants will be able to absorb the recovery of rising utility costs and municipal rates; the expected roll-out of the current and budgeted development portfolio.

Additionally, the guidance is also dependent on there being no unforeseen circumstances, such as major corporate tenant failures or a deterioration in the macroeconomic environment.