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PROPERTY: MAS Continues Robust Growth in Year to June


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In the year to June 2015 MAS Real Estate, that migrated its listing from the JSE’s AltX to the main board last December, continued the rapid expansion of its property portfolio concentrated in Germany and the UK, increasing its value by 283,5% from €64,8m to €248,5m (about R3,8bn).

In addition to growing its portfolio, the company’s profit for the year increased from €5,1m for the 16-month period to June 2014, to €48,5m in the 12 months since – an increase of 858%. Adjusted net asset value per share grew by a healthy 16,8% from 103,8 euro cents to 121,2 euro cents while adjusted core income per share was 20,9% higher. The directors have proposed a final dividend of about 2,20 euro cents a share which will bring the total distribution for the year to 3,35 euro cents a share.

The dramatic increase in the size of the portfolio followed a private placement in February last year when the company raised about €180m from private and institutional investors.

With all its assets in Western Europe, MAS, based on the Isle of Man and also listed on the Euro MTF market of the Luxembourg Bourse, reports its results in euro.

In addition to acquiring another large development property in the UK, the focus was on the acquisition of income-generating properties in Germany. The income-generating segment of the portfolio grew by 314% from €39,7m to €164,4m, which in turn resulted in an increase of 66% in rental income.

CEO Lukas Nakos said: “Our results, when seen on a stand-alone basis are strong, but they should also be considered in the context of the business having more than doubled in size during the year, with 66% of the balance sheet in cash at the start of it. As most of the new acquisitions were only made in the second half of the reporting period, their full impact will only be felt in the 2016 financial year.”

The German acquisitons are predominantly retail properties leased on 15-year contracts to leading German companies at rentals providing initial returns of between 7% and 8%.

The exception is a 19 ha industrial warehousing and office park bought for €40,3m in Chippenham in the UK. Offering 75 000m² of lettable space, it houses substantial clients like Siemens. Its sought-after location near the town centre opens up the possibility of significant residential development on the same site.

New Waverley, the company’s major development project in the heart of Edinburgh’s historic centre, is progressing well. Construction of the three pre-let hotels on the site is on schedule and all three are expected to be completed before the end of the 2016 calendar year. The valuation of the hotel development bphase of the project was increased before year-end by €11,2m, net of fees due to the developer.

MAS’s other investments also performed well, with its 41% interest in the Karoo Fund showing a net gain of €19,5m. The Karoo fund is being wound up in January next year.

Nakos said MAS would continue adding to its portfolio in the new year, with the focus remaining on Germany where properties generate strong rental income while the cost of funding is low.


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